Stock-Flow Adjustments and Fiscal Transparency: A Cross-Country Comparison

Anke Weber

No 2012/039, IMF Working Papers from International Monetary Fund

Abstract: Over the past three decades, large and persistent discrepancies between the annual change in public debt and the budget deficit, so-called stock-flow adjustments, were a prominent feature of debt dynamics in many economies. The aim of this paper is to investigate the underlying determinants of such discrepancies and their relationship with fiscal transparency using data for 163 countries. Results show that such discrepancies can only be partly explained by balance sheet effects and the realization of contingent liabilities and that significant differences exist in average stock-flow adjustments across countries reflecting country-specific factors. The more fiscally transparent the country, the smaller these tend to be. The contribution of stock-flow adjustments to increases in debt is likewise smaller in countries with above average fiscal transparency. This may not be coincidental, as a lack of fiscal transparency may make it easier for governments to engage in deceptive fiscal stratagems.

Keywords: WP; debt; Public Debt; Budget Deficits; Fiscal Transparency; stock-flow adjustment; debt decrease; low-income economy; accumulation equation; debt-reducing measure; debt forgiveness; debt increase; Budget planning and preparation; Banking crises; Debt reduction; Europe; Global; financial assets accumulation; debt change; balance sheet effect; A. data sources; Government debt management (search for similar items in EconPapers)
Pages: 19
Date: 2012-01-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (47)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=25692 (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:imf:imfwpa:2012/039

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().