Do Transparency Initiatives Work? Assessing the Impact of the Special Data Dissemination Standard (SDDS) on Data Transparency

Abstract

The Special Data Dissemination Standard (SDDS) initiative was launched by the IMF in 1996 to enhance the availability of comprehensive economic data based on best dissemination practices to facilitate in pursuing sound macroeconomic policies. By joining this initiative, governments signal their commitment to disclose policy-relevant data. Has the SDDS initiative served its purpose? We use Hollyer, Rosendorff and Vreeland’s (2014) Data Transparency Index which gauges governments’ ability to collect and disseminate aggregate economic data using a Bayesian item response algorithm model, which treats transparency as a latent predictor of reporting (absence) on 240 variables from the World Bank’s World Development Indicators. Using panel data on 120 countries during the 1996–2011 period, we find that compliance with the SDDS initiative is associated with an increase in data transparency index after controlling for self-section bias. Our results are robust to controlling for endogeneity using instrumental variables, alternative sample, and estimation methods.

Keywords: Data transparency, SDDS initiative, IMF