The fiscal implications of strategic investment funds

Håvard Halland

No 41, OECD Development Policy Papers from OECD Publishing

Abstract: Strategic investment funds (SIFs) are instruments of economic and financial policy, and the operations of these funds have important fiscal implications. These implications span the full cycle of the SIFs’ operations, from funding, through capital allocation, to operations and maintenance of the invested assets. SIFs with a capacity to deploy capital efficiently have the potential to increase the effectiveness of the public expenditure programmes in the SIFs’ respective home countries. However, the establishment and operations of SIFs also carry important fiscal risks, which need to be recognised and addressed. This paper considers the flows of capital into and out of SIFs, as well as the relationship of these flows to the fiscal framework and macro-fiscal context of the SIFs’ home countries. It also looks at the fiscal liabilities that can result from SIFs’ activities, and from their possible insolvency and bankruptcy, offering suggestions for how these risks can be mitigated. Les fonds d'investissement stratégique (SIF pour leur acronyme en anglais) sont des instruments de politique économique et financière, et leurs opérations ont des implications fiscales importantes. Ces implications couvrent un cycle complet, allant du financement à l'allocation de capital, et des opérations à la maintenance des actifs investis. Les SIF capables de déployer efficacement leurs capitaux peuvent accroître l'efficacité des programmes de dépenses publiques dans les pays d'origine des SIF. Cependant, la création et le fonctionnement des SIF comportent également des risques fiscaux importants, qui doivent être reconnus et pris en compte. Ce document examine les flux de capitaux entrant et sortant des SIF, ainsi que la relation de ces flux avec le cadre budgétaire et le contexte macro-budgétaire des pays d'origine des SIF. Il examine également les responsabilités fiscales qui peuvent résulter des activités des SIF et de leur éventuelle insolvabilité et faillite, offrant des recommandations sur la manière dont ces risques peuvent être atténués.

Keywords: fiscal liabilities; fiscal management; fiscal risk; national development funds; public financial management; sovereign debt; sovereign wealth funds; strategic investment funds (search for similar items in EconPapers)
JEL-codes: G23 G28 H30 H81 O23 (search for similar items in EconPapers)
Date: 2021-12-20
New Economics Papers: this item is included in nep-cwa and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:oec:dcdaab:41-en

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