Sovereign Wealth Funds in the Pacific Island Countries: Macro-Fiscal Linkages

Author/Editor:

Paulo A Medas ; Eric Le Borgne

Publication Date:

December 1, 2007

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper looks at the role Sovereign Wealth Funds have played in the Pacific Island Countries in achieving key macro-fiscal policy objectives, namely, protecting the budget from high revenue volatility and strengthening fiscal prospects. Evidence shows that the funds' effectiveness has been hampered by lack of integration with the budget, institutional weaknesses, and inadequate controls. These factors, together with weak asset management, have sometimes led to substantial financial losses and undermined fiscal policy. Funds, if well designed, could be used as a tool to support a sound fiscal framework, but should not be seen as a substitute for fiscal reforms.

Series:

Working Paper No. 2007/297

Subject:

Budget planning and preparation Extra-budgetary funds Fiscal policy Public financial management (PFM) Sovereign wealth funds

English

Publication Date:

December 1, 2007

ISBN/ISSN:

9781451868609/1018-5941

Stock No:

WPIEA2007297

Pages:

29

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