# 2. Direct debt data disclosure

Public debt data in LIDCs are disseminated through different channels and in different formats. National authorities may publish debt statistics in dedicated bulletins or broader monetary / macro publications, they may also share their databases with the general public. This channel of dissemination of public debt statistics can be defined as _direct_ reporting _._ In parallel, national authorities also make data available to a number of external agents (e.g., WB/IMF, credit rating agencies, etc.) for their review, compilation and disclosure on their own publications or websites. This second form of dissemination is defined as _indirect_ reporting.

National authorities have a responsibility to provide timely information on debt statistics to their citizens as well as to current and potential investors, the lack of full disclosure may have important financial consequences and hinder trust in governments. The extent of a country’s debt transparency can be evaluated based on the degree of information that it shares on its public debt; particularly by examining a country’s active reporting of debt data vis-à-vis the expected level of reporting according to its legal and institutional frameworks, and its actual debt portfolio.<sup>2</sup> Despite the relevance and increasing interest in debt transparency, there is no available methodology to measure data disclosure standards at the national level while being able to make cross-country comparisons. This paper sets this agenda forward by providing a simple tool to facilitate this assessment in LIDCs, the Public Debt Reporting Heatmap.

## _The Public Debt Reporting Heatmap_

The heatmap evaluates debt information available on national authorities’ websites to assess direct reporting standards. The tool is intended to show strengths and weaknesses at the country level. The heatmap is updated on an annual basis and published on the WB’s website,<sup>3</sup> with the aim of identifying existing gaps by country, fostering countries’ efforts to improve data dissemination, and informing technical assistance strategies.

A country’s performance is evaluated across nine indicators and addresses three main areas: (i) public debt statistics dissemination practices; (ii) publication of key debt management documents; and (iii) reporting on risks stemming from contingent liabilities. Each indicator is evaluated according to a fourcategory scale, which ranks standards from low (red) to high (green), according to the criteria presented in Figure 1.

Dissemination practices for public debt statistics are assessed according to the following three dimensions: accessibility, completeness, and timeliness.<sup>4</sup> Debt data should cover debt stocks at the cut-

> 2 This assessment cannot differentiate between intentional and non-intentional under-reporting, nor can it identify “hidden debt”, as this would require granular data from creditors or other stakeholders involved in the transactions. As discussed in Section 3, these records are rarely available.

> 3 - - <u>https://www.worldbank.org/en/topic/debt/brief/debt transparency report</u>

> 4 Completeness is evaluated relative to the prevailing legal framework and countries’ current borrowing practices. For instance, if SOEs in one country are not legally allowed to borrow or do not have outstanding debt, they are not expected to be covered in the public debt reports.