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Government Guarantees as an Instrument for Investment Risk Allocation

Author

Listed:
  • Antonina S. Kovalevskaya

    (Financial Research Institute, Moscow 127006, Russia)

  • Svetlana I. Nikulina

    (Financial Research Institute, Moscow 127006, Russia)

Abstract

Government guarantees for investment projects are important as a risk allocation instrument encouraging investors to finance socially significant projects. In spite of many advantages, it involves considerable risks for a guarantor and financial stability of a country. Therefore, issues of managing risks connected with government guarantees provision are relevant for many countries especially for the Russian Federation, where existing mechanism of government support by means of guarantees needs changes. The article describes the experience of Brazil and India in government guarantees management in relation to the investment projects. Their practices are especially important for Russia as both countries are its BRICS partners and considered as the most attractive destinations for overseas investment allocation. It is useful for Russia as an investment guarantor in terms of its security improvement and risk management of investment projects during making decisions about guarantees provision. Analysis covers organizational and management specifics of government guarantees in the area of public-private partnership. The study is carried out on such elements of the management system as a creation of guarantee funds to protect investors from investment risks and evaluation of infrastructure projects effectiveness. Based on the analysis, the authors give recommendations on how to improve the government guarantees instruments in Russia.

Suggested Citation

  • Antonina S. Kovalevskaya & Svetlana I. Nikulina, 2018. "Government Guarantees as an Instrument for Investment Risk Allocation," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 23-33, October.
    • Handle: RePEc:fru:finjrn:180502:p:23-33
    DOI: 10.31107/2075-1990-2018-5-23-33
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    References listed on IDEAS

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    1. Andrei A. Bokarev & Olga V. Bogacheva & Oleg V. Smorodinov, 2017. "Methodology Development of Efficiency Evaluation of Public Infrastructure Investment Management," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 56-70, August.
    2. Igor V. Belyakov, 2017. "Monitoring and Analysis of Contingent Budget Liabilities to Financial System," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 71-84, August.
    3. Leyla B. Mokhnatkina, 2018. "Budget Balance and Government Debt As Indicators of Region’s Financial and Budgetary Security," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 2, pages 106-119, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dmitry N. Ershov, 2019. "Using State Guarantees in Risk Management of Investment Projects," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 34-43, February.

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    More about this item

    Keywords

    government guarantees; infrastructure investments; infrastructure projects risks; guarantee funds; guarantee support mechanism; contingent liabilities; budget stability;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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