Quasi-fiscal activities, hidden government subsidies, and fiscal adjustment in Armenia

Lev Freinkman (), Gohar Gyulumyan and Artak Kyurumyan

MPRA Paper from University Library of Munich, Germany

Abstract: This paper aims to develop a detailed analysis of quasi-fiscal deficits and subsidies, and their impact on Armenia’s fiscal performance in the second part of the 90-s. Based on the flow-of-funds approach, we estimate the magnitude of the quasi-fiscal deficits and the incidence of quasi-fiscal subsidies in Armenia, as well as identify main recipients and donors of quasi-fiscal financing. The main finding of the paper is that, while quasi-fiscal deficits in Armenia remain considerable, their recent decline has been the main source of fiscal adjustment in Armenia to date. The paper also shows that the population remains a major ultimate recipient of quasi-fiscal subsidies. Thus, the main distortive impact of quasi-fiscal subsidies is on social policy, not on enterprise restructuring and private sector performance.

Keywords: Armenia; subsidies; fiscal adjustment; quasi-fiscal deficit; losses in the energy sector (search for similar items in EconPapers)
JEL-codes: H62 H20 P35 H81 (search for similar items in EconPapers)
Date: 2002-12
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:10064

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