Empirical Evidence that Markets Pay Attention to the Quality of Fiscal Reporting

[atseacliff]

Intuitively, as a result of the financial crisis one might suppose that rating agencies, bond holders and agencies outside government might have an stronger interest in evalutating the relative strengths and weaknesses of fiscal reporting systems.  I was recently told that one reason an EU country had stronger fiscal reporting in local government than central government was due to the prevalence of municipal bonds.  I wonder if this is really the case?  Has anyone seen any empirical evidence to suggest that the markets are paying attention to the quality of fiscal reporting and underlying country PFM? 

[John Short]

Searching randomly through past posts (which is quite educational and interesting), I came across this one - which preceded Liz Truss's premiership and the resultant budget.  Perhaps this is one example of an answer to "Has anyone seen any empirical evidence to suggest that the markets are paying attention to the quality of fiscal reporting and underlying country PFM?"  The question may have been asked some 8 years earlier but nonetheless an answer!

Any other answers from elsewhere?