Public Sector Accounting and Budgeting

Public Sector Accounting and Budgeting

Budget transparency and financial sustainability

Document Type : Original Article

Author
Department of Accounting, Payam Noor University, Tehran, Iran
Abstract
Transparency in the budget is one of the basic components of good governance, which helps to increase the accountability and participation of citizens in the government's financial decisions. Budget transparency not only promotes public trust and reduces corruption, but can also help improve the financial sustainability of the government. Therefore, with this assumption, the present study investigated the relationship between budget transparency and financial stability using international data. This research was conducted in the economic environment of selected Asian and European countries, where the dependent variable is the Open Budget Index (OBI) published by the International Budget Partnership Organization (IBP) and the explanatory variables were various indicators of financial stability. To achieve the goals of the research, the information of the selected countries of Asia (15 observations) and Europe (15 observations) during the years 2011 to 2022 were analyzed through multiple regression. The findings showed that the open budget index, which expresses the transparency of the budget at the level of countries, significantly increases the level of financial stability in both the economic environments of Asia and Europe. Also, the results of the Fisher test showed that there is a significant difference between the relationship between the open budget index and financial stability in both economic environments, and the effect of the open budget index and financial stability is stronger in Europe than in Asia. Based on these findings and considering the importance of transparency in the budget, it is suggested that more measures be taken in the field of financial policy reforms and the creation of appropriate mechanisms for popular supervision of financial activities. These measures can significantly improve financial stability and help countries manage financial and economic management in a more sustainable way.
Keywords

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Volume 5, Issue 4 - Serial Number 18
November 2024
Pages 110-137

  • Receive Date 29 October 2024
  • Revise Date 12 December 2024
  • Accept Date 04 January 2025