Quasi-Fiscal Activities, Hidden Government Subsidies, and Fiscal Adjustment in Armenia
This paper aims to develop a detailed
analysis of quasi-fiscal deficits and subsidies, and their
impact on Armenia's fiscal performance in the second
part of the 1990s. Based on the flow-of-funds approach, we
estimate the magnitude of the quasi-fiscal deficits and the
incidence of quasi-fiscal subsidies in Armenia, as well as
identify main recipients and sources of quasi-fiscal
financing. The principal finding of the paper is that while
quasi-fiscal deficits in Armenia remain considerable, their
recent decline has been a major contributing factor to
Armenia's fiscal adjustment. The paper also shows that
households remain a major ultimate recipient of quasi-fiscal
subsidies. Thus, the main distortive impact of quasi-fiscal
subsidies is on social policy and equity, rather than on
enterprise restructuring and private sector performance.
Still, the current level of public sector deficit in Armenia
remains too high, which requires an additional adjustment
effort. The paper suggests that to make fiscal adjustment
sustainable a further strengthening of financial control,
accounting and reporting in the public sector is needed,
including through better Government monitoring of debts and
other liabilities accumulated by the large state enterprises
and phasing out the phenomenon of implicit (hidden
subsidies), such as debt-for-equity swaps. The proposed
approach to the analysis of quasi-fiscal deficits and
subsidies, based on estimates of accumulated debts in the
public sector and its main parts, seems to be fully
applicable to other economies in transition, especially to
those low-income CIS countries, which are heavily dependent
on energy imports.
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Bibliographic Details
| Main Authors: |
Freinkman, Lev,
Gyulumyan, Gohar,
Kyurumyan, Artak |
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| Format: | Publication
biblioteca
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| Language: | English
en_US |
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| Published: |
Washington, DC: World Bank
2003-09
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| Subjects: | GOVERNMENT SUBSIDIES,
FISCAL ADJUSTMENTS,
FISCAL MANAGEMENT,
PUBLIC SECTOR BUDGETS,
DEFICIT PROJECTS,
SUBSIDIES,
LIABILITY MANAGEMENT,
EXTERNAL BORROWING,
ENERGY SECTOR MANAGEMENT,
SUBSIDY,
PRICE ADJUSTMENT METHODS,
EXTERNAL DEBT INDICATORS,
BUDGET DEFICIT,
CREDITS,
STOCKS,
GAS,
PRIVATIZATION,
ELECTRICITY TARIFFS,
VALUE ADDED TAX,
INFRASTRUCTURE,
DONORS ACCOUNTING,
ASSETS,
BALANCE SHEET,
BANKRUPTCY,
BORROWING,
BUDGET CONSTRAINT,
BUDGET DEFICITS,
BUDGET EXPENDITURES,
BUDGET PERFORMANCE,
BUDGET PROCESS,
BUDGETARY FUNDS,
CENTRAL BANK,
COMMERCIAL BANKS,
COMMERCIAL CREDITS,
DEFICIT FINANCING,
DIRECT FINANCING,
DOMESTIC BORROWING,
DOMESTIC PRICES,
EBF,
ECONOMIC STABILIZATION,
ECONOMIES IN TRANSITION,
ELECTRICITY,
ENTERPRISE RESTRUCTURING,
EXCHANGE RATES,
EXPENDITURE,
FINANCIAL CONTROL,
FINANCIAL SECTOR,
FISCAL,
FISCAL ADJUSTMENT,
FISCAL DECENTRALIZATION,
FISCAL DEFICIT,
FISCAL DEFICITS,
FISCAL DISCIPLINE,
FISCAL GAP,
FISCAL PERFORMANCE,
FISCAL POLICY,
FISCAL PROBLEMS,
FISCAL SUSTAINABILITY,
GOVERNMENT BUDGET,
GOVERNMENT DEBT,
GOVERNMENT GUARANTEES,
GOVERNMENT OBLIGATIONS,
GOVERNMENT REVENUE,
GOVERNMENT SECTOR,
GOVERNMENT SERVICES,
GOVERNMENT'S BUDGET,
HARD BUDGET CONSTRAINTS,
INFLATION,
INTERNATIONAL MONETARY FUND,
INTERNATIONAL RESERVES,
LICENSES,
MACROECONOMIC PERFORMANCE,
MORAL HAZARD,
MUNICIPAL GOVERNMENTS,
MUNICIPALITIES,
NATIONAL GOVERNMENTS,
PENSION FUNDS,
PRESENT VALUE,
PRIVATE SECTOR,
PROVISIONS,
PUBLIC DEBT,
PUBLIC ENTERPRISES,
PUBLIC FINANCE,
PUBLIC FINANCE SYSTEM,
PUBLIC FINANCING,
PUBLIC PROPERTY,
PUBLIC RESOURCES,
PUBLIC SECTOR,
PUBLIC SECTOR DEFICIT,
PUBLIC SERVICES,
REAL EXCHANGE RATE,
RELATIVE PRICE,
SOCIAL POLICY,
SOCIAL PROTECTION,
SOCIAL SERVICES,
SOFT BUDGET CONSTRAINTS,
STABILIZATION EFFORTS,
STATE ENTERPRISES,
STATE-OWNED ENTERPRISES,
TAX,
TAX ADMINISTRATION,
TAX ARREARS,
TAXATION,
TRANSITION ECONOMIES,
TRANSPARENCY,
UTILITIES, |
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| Online Access: | http://documents.worldbank.org/curated/en/2003/09/2693791/quasi-fiscal-activities-hidden-government-subsidies-fiscal-adjustment-armenia
http://hdl.handle.net/10986/15074
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