The Public Debt Management Newtwork

CLs refer to liabilities that are conditional upon predefined events or circumstances. Relative to government policies, contingent liabilities, both explicit and implicit, are associated with major hidden fiscal risks. An important policy issue is the fiscal costs related to explicit contingent explicit liabilities (which are specific government obligations defined by law or contract that the government is legally mandated to settle when it becomes due). Often they are not visible until they are triggered, and therefore they represent a hidden fiscal risk and can drain future government finances. The problem with implicit contingent liabilities (which represent a moral obligation for the government based on public expectations and political pressure) is that they are not officially recognised until a failure occurs. In this case, the triggering event, the amount at risk and required unexpected government expenditures are all uncertain.

This policy area includes the following issues:

• how countries can disclose information on their exposure to all types of fiscal risk;
• a discussion of analytical concepts and best practices that have been developed in recent years, namely the Fiscal Risk Matrix, the IMF Code of Fiscal Transparency, the OECD best practices for the management of explicit contingent liabilities, accounting, budgeting and provisioning for risk, and the balance sheet approach to fiscal management;
• case-studies in different countries.

Sample Documents

The following are sample documents published up to and including the year 2003, and extracted from a wider group available on the reserved area of this website. Access to the reserved area is free, but reserved for partners only. Please find more information at the Join us section.

Documents

• Kim HoeJeong, Esfahani Hadi Salehi

  Hiding Public Debt (2002)

  More Info on Hiding Public Debt
• Currie Elizabeth

  The Potential Role of Government Debt Management Offices in Monitoring and Managing Contingent Liabilities (2002)

  More Info on The Potential Role of Governme[..]