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Contingent Liabilities as a Risk Factor in Public Finance: The Case of Turkey

Author

Listed:
  • Semih ŞEN
  • Mircan TOKATLIOĞLU

Abstract

One of the conditions for governments to sustain public finance in a healthy way is to analyze and minimize the possible risks that may arise in the future. In this context, the upward trend in contingent liabilities seen in many countries in recent years has become one of the major risk factors to be considered and monitored. The increase in contingent liabilities has the potential to lead to an increase in public debt and public deficits, as well as the potential for fiscal transparency and moral hazard in the public sector. In this study, the aim is to analyze Turkey's contingent liabilities for the period 1990-2018. The study shows that contingent liabilities has increased in recent years in Turkey. It can be said that this increase is a risk to fiscal stability of Turkey. Another result is that there are important problems, including especially the fiscal transparency, in the management of contingent liabilities.Classification-JEL: H63, H68, H74.Keywords: Contingent Liabilities, Public Guarantees, Treasury Guarantees, Public Private Partnerships.

Suggested Citation

  • Semih ŞEN & Mircan TOKATLIOĞLU, 2020. "Contingent Liabilities as a Risk Factor in Public Finance: The Case of Turkey," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(44).
    • Handle: RePEc:sos:sosjrn:200210
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    References listed on IDEAS

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    1. Christopher M. Towe, 1991. "The Budgetary Control and Fiscal Impact of Government Contingent Liabilities," IMF Staff Papers, Palgrave Macmillan, vol. 38(1), pages 109-134, March.
    2. Graeme Wheeler, 2004. "Sound Practice in Government Debt Management," World Bank Publications - Books, The World Bank Group, number 15017.
    3. Heleen M.J. Hofmans & Clement R. van de Coevering, 2014. "How to deal with contingent liabilities – Lessons from the Dutch experience," OECD Journal on Budgeting, OECD Publishing, vol. 14(1), pages 35-45.
    4. Oecd, 2005. "Overview of Advances in Risk Management of Government Debt," Financial Market Trends, OECD Publishing, vol. 2005(1), pages 117-134.
    5. Michael J. Boskin, 1988. "Concepts and Measures of Federal Deficits and Debt and Their Impact on Economic Activity," International Economic Association Series, in: Kenneth J. Arrow & Michael J. Boskin (ed.), The Economics of Public Debt, chapter 3, pages 77-115, Palgrave Macmillan.
    6. Aslan,Cigdem & Duarte,David, 2014. "How do countries measure, manage, and monitor fiscal risks generated by public-private partnerships? Chile, Peru, South Africa, Turkey," Policy Research Working Paper Series 7041, The World Bank.
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    More about this item

    Keywords

    contingent liabilities; public guarantees; treasury guarantees; public private partnerships.;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing

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