Quasi-Fiscal Deficits and Energy Conditionality in Selected CIS Countries

Tapio Saavalainen and Joy Mylène Berge

No 2006/043, IMF Working Papers from International Monetary Fund

Abstract: Quasi-fiscal deficits of public utility companies are common in all member countries of the Commonwealth of Independent States (CIS). They constitute a significant impediment to efficient resource allocation and endanger macroeconomic stability. This paper presents a simple framework for measuring and monitoring such deficits and highlights their macroeconomic relevance. It reviews the progress under IMF conditionality aimed at correcting these imbalances during 1993-2003. The paper suggests that the extensive conditionality under the IMF-supported programs has yielded only limited progress in reducing the energy sector's financial imbalances. In conclusion, different policy options are discussed in light of the lessons learned.

Keywords: WP; state capture; aluminum smelter; country authorities; state debt; trading company; Energy; quasi-fiscal deficit; transition; conditionality; governance; CIS country; enterprise restructuring; energy enterprise; government decree; General government cash deficit; nonviable enterprise; Tariffs; Energy sector; Electricity; Privatization; Europe; Central Asia (search for similar items in EconPapers)
Pages: 37
Date: 2006-02-01
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Citations: View citations in EconPapers (10)

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