New development: Towards a grand convergence? International proposals for aligning government budgets, accounts and finance statistics

Abstract

Government responses to recent financial crises have imposed heavy burdens on the public finances of many countries, and exposed weak links between fiscal information sources: budgets, accounts and finance statistics. In order to better understand the causes and effects of financial crises—as well as to predict them early and manage them effectively—the International Monetary Fund (IMF) recently proposed a standard for fiscal forecasting. Viewing this alignment proposal as the culmination—a ‘grand convergence’—of earlier attempts at linking and improving these three fields, the authors describe and assess the IMF initiative, and discuss its likely impact.

Keywords:

• Fiscal transparency
• government accounts
• government budgets
• government finance statistics
• IMF alignment proposal

Notes

*The views expressed in this paper do not necessarily reflect the positions of the organizations with which the authors are affiliated.

^* In the absence of a standard definition of accrual budgeting, it is difficult to be definitive about the extent to which it is practised. The US government looked to Australia, Iceland, The Netherlands New Zealand and the UK for relevant experience (GAO, 2000).

Additional information

Notes on contributors

Jens Heiling

Jens Heiling is a manager in the Government and Public Sector Professional Practice Group, Ernst &young, Germany.

Sabine Schührer

Sabine Schührer is an associate lecturer at the University of Adelaide, Australia.

James L. Chan

James L. Chan is Professor Emeritus of Accounting at the University of Illinois at Chicago, Distinguished Overseas Professor at Peking University and at Shandong University of Finance and Economics, and Professor by Special Appointment at the Research Institute of Fiscal Science, China.