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Dispelling Fiscal Illusions: How Much Progress Have Governments Made in Getting Assets and Liabilities on Balance Sheet?


  • Mr. Timothy C Irwin


When rights and obligations are not recognized as assets and liabilities on a government’s balance sheet, the government’s deficit can be reduced by selling off-balance-sheet assets or incurring off-balance-sheet liabilities. This paper examines how much progress has been made in recognizing assets and liabilities and thus dispelling the fiscal illusions that such transactions create. Looking at the accounts, government-finance statistics, and long-term fiscal projections produced in 28 advanced economies in the period since 2003, it finds good progress in the recognition of some assets and liabilities, such as accounts payable and simple financial assets, but much less in others, such as civil-service pensions.

Suggested Citation

  • Mr. Timothy C Irwin, 2016. "Dispelling Fiscal Illusions: How Much Progress Have Governments Made in Getting Assets and Liabilities on Balance Sheet?," IMF Working Papers 2016/095, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2016/095

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    References listed on IDEAS

    1. Mr. Timothy C Irwin, 2012. "Some Algebra of Fiscal Transparency: How Accounting Devices Work and How to Reveal Them," IMF Working Papers 2012/228, International Monetary Fund.
    2. Jagadeesh Gokhale & Kent Smetters, 2006. "Fiscal and Generational Imbalances: An Update," NBER Chapters, in: Tax Policy and the Economy, Volume 20, pages 193-223, National Bureau of Economic Research, Inc.
    3. David Heald & George Georgiou, 2009. "Whole of government accounts developments in the UK: conceptual, technical and timetable issues," Public Money & Management, Taylor & Francis Journals, vol. 29(4), pages 219-227, July.
    4. Mr. Timothy C Irwin & Lewis K Murara & Rachel F Wang, 2015. "Trends in Fiscal Transparency: Evidence from a New Database of the Coverage of Fiscal Reporting," IMF Working Papers 2015/188, International Monetary Fund.
    5. Allan Barton, 2011. "Why Governments Should Use the Government Finance Statistics Accounting System," Abacus, Accounting Foundation, University of Sydney, vol. 47(4), pages 411-445, December.
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    2. Christofzik, Désirée I., 2019. "Does accrual accounting alter fiscal policy decisions? - Evidence from Germany," European Journal of Political Economy, Elsevier, vol. 60(C).

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