Sustainable public debt has gained renewed attention as countries implement fiscal consolidation measures in the aftermath of the global financial crisis. Sound public debt policies and debt management practices require robust legal underpinnings. Complex legal issues however arise in the design of the legal framework, and tradeoffs are required in many instances. This paper analyzes key features of modern public debt management legal frameworks, drawing from examples in advanced, emerging, and frontier markets. It aims to provide guidance for countries that seek to review and strengthen their public debt management legal frameworks.
at making it more consistent with best international practices are underway.
Taking into consideration Fund recommendations on the need to strengthen debt management, my authorities are exploring ways to centralize all debt activities on the responsibility of a unique entity, the debt Directorate, instead of two actually. They are also planning to enhance the technical and analytical capabilities of this new entity. A new committee, “the National Debt Management Committee” having in charge the proposals for new governmentloansandguarantees is already
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Fried , J. , “GovernmentLoanandGuarantee Programs,” Federal Reserve Bank of St. Louis Economic Review ( St. Louis , Missouri ) December 1983 , pp. 22 – 30 .
Gordon , R. , “ Taxation of Corporate Capital Income: Tax Revenues versus Tax Distortions, ” Quarterly Journal of Economics ( New York ), Vol. 100 ( 1985 ), pp
Mr. Paolo Mauro, Hervé Joly, Mr. Ari Aisen, Mr. Emre Alper, Mr. Francois Boutin-Dufresne, Mr. Jemma Dridi, Mr. Nikoloz Gigineishvili, Mr. Tom Josephs, Ms. Clara Mira, Mr. Vimal V Thakoor, Mr. Alun H. Thomas, and Mr. Fan Yang
overarching role in monitoring public enterprises (as well as numerous extrabudgetary agencies). TR prepares an annual report to parliament that includes the list of public enterprises and other government agencies, information on government equity holdings, governmentloansandguarantees, transfers from the central government, loan repayments and arrears, and dividend and other payments to the budget. TR also compiles summary information on the financial performance of public enterprises and extrabudgetary agencies, which was first published in November 2014.
The optimal provision of loan guarantees or deposit insurance is examined in the context of an overlapping generations model. It is demonstrated that even in the face of a market imperfection that precludes diversification of the private sector’s loan portfolio to eliminate risk, full government guarantee of private sector loans (or deposits) is suboptimal. The results of the paper suggest that although some degree of guarantee is appropriate, the design of such policies should be tempered to avoid an inefficient level of capital accumulation.
new PFM law, adopted in September 2009, and related regulations . The PFM law sets a new framework for debt management operations, which includes clear guidelines to borrow and provide guarantees. 1 Under the PFM law, the Minister of Finance is responsible for borrowing and guarantees. The law creates a Debt Management Committee (DMC) at the ministerial level, which approves all governmentloanandguarantee agreements. 2 The Director of the Debt Management Unit (DMU) serves as a secretariat to the DMC. All borrowing and guarantee contracts for the Government or
, the omission from the budget of governmentloansandguarantees, the presentation of the budget in multiple formats, and, more generally, lack of transparency in areas such as expenditure administration and sources of revenue. In contrast, when the budget process is informative, it becomes easier for the finance minister to impose hard budget constraints on spending ministers, for the parliament to monitor the actions of the government, and for the government to ensure that budget decisions are properly implemented. Furthermore, public accountability for the actions
Niger’s medium-term fiscal policy aims to support the growth strategy by creating fiscal space for increasing development spending while maintaining external debt sustainability. Economic activity in recent years has been affected by large swings in agricultural production. The authorities’ program is aimed at maintaining macroeconomic stability while increasing resilience to shocks; strengthening public finance and debt management; and supporting private and financial sector development. Medium-term fiscal policy will aim at maintaining debt sustainability while creating room for increased development spending.
Mr. Paolo Mauro, Mr. Herve Joly, Mr. Ari Aisen, Mr. Emre Alper, Mr. Francois Boutin-Dufresne, Mr. Jemma Dridi, Mr. Nikoloz Gigineishvili, Mr. Tom Josephs, Ms. Clara Mira, Mr. Vimal V Thakoor, Mr. Alun H. Thomas, and Mr. Fan Yang
This paper takes stock of the main fiscal risks facing the EAC partner countries. These include macroeconomic shocks, and specific risks, such as the financial performance of the public enterprises, large infrastructure projects, PPPs, and pension funds. In addition, weaknesses in the institutional framework are reviewed. This analysis highlights some of the largest risks and begins to give a sense of the potential magnitudes involved.