Managing Fiscal Risks from State-Owned Enterprises

Anja Baum, Paulo Medas, Alberto Soler and Mouhamadou Sy

No 2020/213, IMF Working Papers from International Monetary Fund

Abstract: Ensuring that state-owned enterprises (SOEs) are efficient and managed prudently is important for economic and social reasons. It is also crucial to contain fiscal risks and reduce the burden on taxpayers from recurrent and large bailouts. Governments need to develop stronger capacity to monitor and mitigate the risks from SOEs. We present a risk tool to benchmark the performance of SOEs relative to their peers and assess their vulnerabilities, including through stress tests. A strategy to mitigate risks requires the right incentives for managers to perform and for government agencies to conduct effective oversight. Incorporating SOEs in overall fiscal targets would promote greater fiscal discipline and transparency.

Keywords: State-owned enterprises; contingent liabilities; fiscal risks; company c; financial support; SOEs manager; electricity company; negative equity; oversight unit; company level; sectoral strategy; SOEs financials; line ministry; company C; return on assets; Public enterprises; Budget planning and preparation; Public sector; Global; company's leverage; holding company; Sub-Saharan Africa; Caribbean; Europe; Middle East and Central Asia; SOEs cost (search for similar items in EconPapers)
Pages: 43
Date: 2020-09-25
New Economics Papers: this item is included in nep-mac
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