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Too Much of a Good Thing? Prudent Management of Inflows under Economic Citizenship Programs

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Listed:
  • Ms. Xin C Xu
  • Ahmed El-Ashram
  • Judith Gold

Abstract

Economic Citizenship Programs (ECPs) have recently been proliferating, with large and potentially volatile inflows of investment and fiscal revenues generating significant benefits for small economies, but also posing substantial challenges. This paper discusses recent developments and implications of such programs for fiscal discipline and the real economy, including risks to macroeconomic and financial stability, with a focus on small state economies. It discusses the prudent management of these programs, overviews strategies to minimize risks to various sectors, and addresses potential governance and integrity challenges. The paper proposes a framework for managing inflows and savings from ECPs to contain macroeconomic risks, and it recommends the establishment of a sovereign wealth fund (SWF) where such revenues are large and persistent.

Suggested Citation

  • Ms. Xin C Xu & Ahmed El-Ashram & Judith Gold, 2015. "Too Much of a Good Thing? Prudent Management of Inflows under Economic Citizenship Programs," IMF Working Papers 2015/093, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2015/093
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    References listed on IDEAS

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    Cited by:

    1. Imam Patrick Amir & Kpodar Kangni, 2021. "Does an Inclusive Citizenship Law Promote Economic Development?," Review of Law & Economics, De Gruyter, vol. 17(1), pages 35-69, March.
    2. Lokman Gunduz & Ismail H Genc & Ahmet Faruk Aysan, 2021. "Buying citizenship: A boon to district-level house prices in Istanbul," Working Papers hal-03365115, HAL.
    3. Langenmayr, Dominika & Zyska, Lennard, 2023. "Escaping the exchange of information: Tax evasion via citizenship-by-investment," Journal of Public Economics, Elsevier, vol. 221(C).
    4. Casi, Elisa & Spengel, Christoph & Stage, Barbara M.B., 2020. "Cross-border tax evasion after the common reporting standard: Game over?," Journal of Public Economics, Elsevier, vol. 190(C).
    5. Dominika Langenmayr & Lennard Zyska, 2021. "Avoiding Taxes: Escaping the Exchange of Information: Tax Evasion via Citizenship-by-Investment," Working Papers 204, Bavarian Graduate Program in Economics (BGPE).
    6. Owen Parker, 2017. "Commercializing Citizenship in Crisis EU: The Case of Immigrant Investor Programmes," Journal of Common Market Studies, Wiley Blackwell, vol. 55(2), pages 332-348, March.
    7. International Monetary Fund, 2016. "Eastern Caribbean Currency Union: 2016 Discussion on Common Policies of Member Countries-Press Release and Staff Report," IMF Staff Country Reports 2016/333, International Monetary Fund.

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