Energy Sector Quasi-Fiscal Activities in the Countries of the Former Soviet Union

Aleh Tsyvinski, Martin Petri and Günther Taube

No 2002/060, IMF Working Papers from International Monetary Fund

Abstract: A decade into the transition, many of the successor states of the former Soviet Union (FSU) continue to use energy sector quasi-fiscal activities (QFAs), especially low energy prices and the toleration of payment arrears, to provide large implicit and untargeted subsidies. These activities disguise the overall size of the government, cause overconsumption and waste, and contribute to macroeconomic imbalances. This paper analyses such activities in FSU countries, with particular emphasis on two case studies (Azerbaijan and Ukraine). The paper's policy conclusions point to the need to increase energy prices, combined with a strengthening of safety nets to protect the poor, better enforcement of payment discipline, and more efforts to achieve fiscal transparency.

Keywords: WP; electricity company Azerenergy; extraction company; energy QFAs; energy enterprise; Former Soviet Union; transition countries; fiscal policy; quasi-fiscal activities; energy sector; energy prices; implicit subsidies; implicit taxation; payment arrears; energy sector company; gas distribution enterprise; collection ratio; enterprise restructuring; Arrears; Electricity; Quasi-fiscal operations; Western Europe (search for similar items in EconPapers)
Pages: 34
Date: 2002-03-01
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Citations: View citations in EconPapers (22)

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