Another Look at Governments’ Balance Sheets: The Role of Nonfinancial Assets

By Elva Bova, Robert Dippelsman, Kara C Rideout, Andrea Schaechter

May 2, 2013

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Format: Chicago

Elva Bova, Robert Dippelsman, Kara C Rideout, and Andrea Schaechter. Another Look at Governments’ Balance Sheets: The Role of Nonfinancial Assets, (USA: International Monetary Fund, 2013) accessed September 19, 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

When discussing debt reduction strategies, little attention has been given to the role of governments’ nonfinancial assets. This is in part because data are scarce. Drawing on various data sources, this paper looks at the size, composition, and management of state-owned nonfinancial assets across 32 economies, with particular focus on the advanced G-20 economies. We find that reported nonfinancial assets comprise mostly structures (such as roads and buildings) and,when valued, land. These assets have increased over time, mostly due to higher property and commodity prices, and are, in large part, owned by subnational governments. Many countries have launched reforms with a view to streamlining public administrations, but receipts and savings have been rather small so far. Governments tend to consider relatively small sets of assets to be disposable, though preferences could change in the future. A potential source for future revenues could be greater reliance on user charges, such as road tolls. In most cases, a first step for more effective asset management has to be the expansion and improvement of data compilation.

Subject: Asset and liability management, Asset valuation, Economic and financial statistics, Financial statements, Government finance statistics, Housing, National accounts, Public financial management (PFM)

Keywords: Asset valuation, Balance sheet, Debt sustainability, Financial statements, Fiscal policy, Fiscal risk, Fixed capital, Government asset, Government finance statistics, Government property, Government statistics, Housing, Market value, National wealth, Nonfinancial asset asset coverage, Nonfinancial asset balance, Nonfinancial asset value, Nonfinancial assets ownership, Replacement cost, Subsoil assets, U.K. nonfinancial assets, WP

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/095
Stock No:

WPIEA2013095
ISBN:

9781484315453
ISSN:

1018-5941

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