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Governance of Crown Financial Assets




This paper investigates the agency problems associated with the public management of a large financial asset portfolio. After considering the relevant theoretical and empirical literature, a set of institutional arrangements are presented that should reduce the extent of the potential agency problems faced. Key design features include: mechanisms for enhancing policy credibility; the use of existing market mechanisms and regulation where possible; and the creation of a public-sector institution to perform administrative functions. The paper does not consider the issues of optimal fiscal policy, or the appropriate risk tolerance for the Crown, although the conclusions drawn from this study may contribute to these debates.

Suggested Citation

  • Nick Davis, "undated". "Governance of Crown Financial Assets," Treasury Working Paper Series 98/02, New Zealand Treasury.
  • Handle: RePEc:nzt:nztwps:98/02

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    References listed on IDEAS

    1. Mitchell, Olivia S., 1993. "Publicpension governance and performance : lessons for developing countries," Policy Research Working Paper Series 1199, The World Bank.
    2. Lakonishok, Joseph & Shleifer, Andrei & Vishny, Robert W., 1992. "The Structure and Performance of the Money Management Industry," Scholarly Articles 10498059, Harvard University Department of Economics.
    3. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
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    Cited by:

    1. Nick Davis, 2001. "Does Crown Financial Portfolio Composition Matter?," Treasury Working Paper Series 01/34, New Zealand Treasury.
    2. Nick Davis & Richard Fabling, 2002. "Population Ageing and the Efficiency of Fiscal Policy in New Zealand," Treasury Working Paper Series 02/11, New Zealand Treasury.

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