IMPROVING FISCAL TRANSPARENCY IN COSTA RICA
by Edgar Ayales
Minister of Finance
One of the top priorities of the Ministry of Finance is to promote fiscal transparency, as it is an important means for informed decision making and for improved accountability to the citizenship about the use of public funds, the country’s financial situation, and public procurement of goods and services.
Actions taken to improve fiscal transparency have brought about significant results: In only four years, Costa Rica has gone from being declared an uncooperative jurisdiction to being a model in Latin America for its progress in this area.
Last October, the International Monetary Fund (IMF) published its Fiscal Transparency Assessment report for Costa Rica. The report presents the results of a new IMF methodology to evaluate fiscal transparency. Costa Rica was invited in March 2013 to participate in the pilot phase of this project, thus becoming one of the first countries in which the new assessment format is used.
In a press release dated November 5, the IMF notes that “Costa Rica is approaching best practice in fiscal reporting and forecasting”. The report notes several areas in which the country has strong fiscal transparency practices, such as the broad coverage of annual budgetary reports, the timely submission and approval of the budget, the role of the Office of the Comptroller General of the Republic as an independent auditor, and the publication of extensive information on financial sector stability by the General Superintendency of Financial Entities.
Nevertheless, the IMF report, as well as the feedback received in the last months in the National Dialogue on Fiscal Consolidation, show that we still have much work to do. The IMF assessment pointed out challenges related to the fragmentation between the budgetary processes for the Central Government and for the rest of the public sector, the reconciliation of fiscal reports from different sources, the need to state fiscal targets for the medium term, and the provision of information on fiscal risk and its management. In turn, participants of the National Dialogue have repeatedly called attention to the need of making available to the citizenship key information on public procurement and contract allocation, details about specific budget items such as management and support services, and information on employment and compensation in the public sector as a whole, including the highest salaries.
To address these weaknesses, the Ministry of Finance prepared an action plan (available on the IMF and the Ministry’s websites) to fully adopt international best practice in this area. The Ministry is also working to improve the information available on its website. As a first step, a new section on fiscal transparency has been added to the main page ( It includes detailed information on Central Government revenue and expenditures, employment in the entire public sector, salaries of high-ranking officials, and on the hiring by the Central Government of consultants and other management and support services. Great efforts were also made to establish a unified public procurement system, which will allow to cover the whole public sector. The fiscal transparency section of the website also provides information on formalities, contract allocations, and suppliers.
Improving fiscal transparency and providing information that is comprehensive, relevant and easily accessible requires continuous work. The Ministry of Finance will maintain these efforts, in line with its commitment to ensure accountability to all Costa Ricans.