Quasi-Fiscal Activities, Hidden Government Subsidies, and Fiscal Adjustment in Armenia

Freinkman, Lev ; Gyulumyan, Gohar ; Kyurumyan, Artak

Washington, DC:World Bank

关键词: GOVERNMENT SUBSIDIES;    FISCAL ADJUSTMENTS;    FISCAL MANAGEMENT;    PUBLIC SECTOR BUDGETS;    DEFICIT PROJECTS;   

DOI  :  10.1596/0-8213-5604-6
RP-ID  :  27144

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper aims to develop a detailedanalysis of quasi-fiscal deficits and subsidies, and theirimpact on Armenia's fiscal performance in the secondpart of the 1990s. Based on the flow-of-funds approach, weestimate the magnitude of the quasi-fiscal deficits and theincidence of quasi-fiscal subsidies in Armenia, as well asidentify main recipients and sources of quasi-fiscalfinancing. The principal finding of the paper is that whilequasi-fiscal deficits in Armenia remain considerable, theirrecent decline has been a major contributing factor toArmenia's fiscal adjustment. The paper also shows thathouseholds remain a major ultimate recipient of quasi-fiscalsubsidies. Thus, the main distortive impact of quasi-fiscalsubsidies is on social policy and equity, rather than onenterprise restructuring and private sector performance.Still, the current level of public sector deficit in Armeniaremains too high, which requires an additional adjustmenteffort. The paper suggests that to make fiscal adjustmentsustainable a further strengthening of financial control,accounting and reporting in the public sector is needed,including through better Government monitoring of debts andother liabilities accumulated by the large state enterprisesand phasing out the phenomenon of implicit (hiddensubsidies), such as debt-for-equity swaps. The proposedapproach to the analysis of quasi-fiscal deficits andsubsidies, based on estimates of accumulated debts in thepublic sector and its main parts, seems to be fullyapplicable to other economies in transition, especially tothose low-income CIS countries, which are heavily dependenton energy imports.