Fiscal Risks Are Not Only in the Budget

Hana Brixi

Czech Journal of Economics and Finance (Finance a uver), 2000, vol. 50, issue 3, 147-159

Abstract: The article demonstrates the importance of incorporating contingent liabilities into fiscal analysis. When explicit expenditures are shifted off budget or replaced by guarantees, achieved fiscal balance is an illusion. In the Czech Republic, fiscal adjustment may have been overstated by some three to four percent of annual GDP during the 1990's. A stabilization program accompanied by a build-up of contingent liabilities, particularly, state guarantees and obligations to cover liabilities emerging from directed credit and from the purchases of bad assets by state-sponsored agencies, may not be sustainable. The study concludes that the government of the Czech Republic should aim at reducing its overall fiscal vulnerability rather than the budget deficit, develop a more effective strategy to resolve the problem of hidden debt, and enhance the public-finance institutional framework to create adequate incentives for policy makers in dealing with contingent liabilities.

Keywords: public finance; transition; hidden debts (search for similar items in EconPapers)
JEL-codes: H6 P35 (search for similar items in EconPapers)
Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://journal.fsv.cuni.cz/mag/article/show/id/207 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:50:y:2000:i:3:p:147-159

Access Statistics for this article

More articles in Czech Journal of Economics and Finance (Finance a uver) from Charles University Prague, Faculty of Social Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().