Enterprise Arrears in Russia : Causes and Policy Options

Author/Editor:

David Bigman ; Sérgio Pereira. Leite

Publication Date:

August 1, 1993

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 examines the causes of the large buildup of enterprise arrears in Russia during 1992, and evaluates policy options to deal with them. Noting the experience of. Eastern European countries, the paper emphasizes that the settlement of arrears through wholesale extension of credit would only achieve a temporary reduction of arrears while inviting moral hazard problems and creating expectations of future bailouts. Instead, emphasis should be placed on measures that instill financial discipline and promote necessary structural changes. These measures should be supported by adequate legislation, effective supervision, and credible sanctions against defaulting enterprises and their managers.

Series:

Working Paper No. 93/61

Subject:

English

Publication Date:

August 1, 1993

ISBN/ISSN:

9781451848090/1018-5941

Stock No:

WPIEA0611993

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

30

Please address any questions about this title to publications@imf.org