Stock-Flow Adjustments and Fiscal Transparency: A Cross-Country Comparison

January 1, 2012

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Format: Chicago

Anke Weber. Stock-Flow Adjustments and Fiscal Transparency: A Cross-Country Comparison, (USA: International Monetary Fund, 2012) accessed November 21, 2024

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

Over the past three decades, large and persistent discrepancies between the annual change in public debt and the budget deficit, so-called stock-flow adjustments, were a prominent feature of debt dynamics in many economies. The aim of this paper is to investigate the underlying determinants of such discrepancies and their relationship with fiscal transparency using data for 163 countries. Results show that such discrepancies can only be partly explained by balance sheet effects and the realization of contingent liabilities and that significant differences exist in average stock-flow adjustments across countries reflecting country-specific factors. The more fiscally transparent the country, the smaller these tend to be. The contribution of stock-flow adjustments to increases in debt is likewise smaller in countries with above average fiscal transparency. This may not be coincidental, as a lack of fiscal transparency may make it easier for governments to engage in deceptive fiscal stratagems.

Subject: Asset and liability management, Banking crises, Budget planning and preparation, Debt reduction, Financial crises, Fiscal transparency, Government debt management, Public debt, Public financial management (PFM)

Keywords: A. data sources, Accumulation equation, Balance sheet effect, Banking crises, Budget Deficits, Budget planning and preparation, Debt, Debt change, Debt decrease, Debt forgiveness, Debt increase, Debt reduction, Debt-reducing measure, Europe, Financial assets accumulation, Fiscal Transparency, Global, Government debt management, Low-income economy, Public Debt, Stock-flow adjustment, WP

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/039
Stock No:

WPIEA2012039
ISBN:

9781463933821
ISSN:

1018-5941

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