Quasi-Fiscal Deficits and Energy Conditionality in Selected CIS Countries

Author/Editor: Saavalainen, Tapio ; Berge, Joy Mylène ten
Publication Date: February 01, 2006
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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: Quasi-fiscal deficits of public utility companies are common in all member countries of the Commonwealth of Independent States (CIS). They constitute a significant impediment to efficient resource allocation and endanger macroeconomic stability. This paper presents a simple framework for measuring and monitoring such deficits and highlights their macroeconomic relevance. It reviews the progress under IMF conditionality aimed at correcting these imbalances during 1993-2003. The paper suggests that the extensive conditionality under the IMF-supported programs has yielded only limited progress in reducing the energy sector's financial imbalances. In conclusion, different policy options are discussed in light of the lessons learned.
Series: Working Paper No. 06/43
Subject(s): Energy | Armenia | Azerbaijan | Georgia | Kyrgyz Republic | Moldova | Tajikistan | Uzbekistan | Budget deficits | Energy sector | Transition economies | Conditionality | Governance

Author's Keyword(s): Energy | Fund conditionality | quasi-fiscal deficit | transition | conditionality | governance
Publication Date: February 01, 2006
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2006043 Pages: 37
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