Assessing the Returns on Investment in Data Openness and Transparency
This paper investigates the potential benefits for a country from investing in data transparency. The paper shows that increased data transparency can bring substantive returns in lower costs of external borrowing. This result is obtained by estima...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/398401580479439299/Assessing-the-Returns-on-Investment-in-Data-Openness-and-Transparency http://hdl.handle.net/10986/33295 |
| Summary: | This paper investigates the potential
benefits for a country from investing in data transparency.
The paper shows that increased data transparency can bring
substantive returns in lower costs of external borrowing.
This result is obtained by estimating the impact of public
data transparency on sovereign spreads conditional on the
country's level of institutional quality and public and
external debt. While improving data transparency alone
reduces the external borrowing costs for a country, the
return is much higher when combined with stronger
institutional quality and lower public and external debt.
Similarly, the returns on investing in data transparency are
higher when a country's integration to the global
economy deepens, as captured by trade and financial
openness. Estimation of an instrumental variable regression
shows that Sub-Saharan African countries could have saved up
to 14.5 basis points in sovereign bond spreads and decreased
their external debt burden by US$405.4 million (0.02 percent
of gross domestic product) in 2018, if their average level
of data transparency was that of a country in the top
quartile of the upper-middle-income country category. At the
country level, Angola could have reduced its external debt
burden by around US$73.6 million. |
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