IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/1105.html
   My bibliography  Save this paper

Estimating quasi-fiscal deficits in a consistency framework : the case of Madagascar

Author

Listed:
  • Le Houerou, Philippe
  • Sierra, Hector

Abstract

In practice, conventional measures of the fiscal deficit exclude the activities of public financial institutions. As a result, fiscal policies may be applied inappropriately when these institutions - especially the central bank - run large losses (the quasi-fiscal deficit). The macroeconomic effects of the quasi-fiscal deficit are similar to the effects of the deficit from other public entities - and should therefore be included in the public deficit. Conceptual and practical difficulties have so far precluded a definition of quasi-fiscal deficits that is operationally useful and comparable across countries. After studying the methodological and practical problems of treating quasi-fiscal deficits, the authors propose using a flow-of-funds format, which in principle could be standardized across countries. Using Madagascar as an example, they show that the public sector deficit is significantly undervalued if quasi-fiscal deficits are not considered. They contend that such deficits must be taken into account in assessing the success of adjustment problems and development strategies supported by the IMF and the World Bank.

Suggested Citation

  • Le Houerou, Philippe & Sierra, Hector, 1993. "Estimating quasi-fiscal deficits in a consistency framework : the case of Madagascar," Policy Research Working Paper Series 1105, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1105
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1993/02/01/000009265_3961004065915/Rendered/PDF/multi_page.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Easterly, William & Schmidt-Hebbel, Klaus, 1991. "The macroeconomics of public sector deficits : a synthesis," Policy Research Working Paper Series 775, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Boray, Yavuz & Sierra, Hector, 1993. "Assessing Bank performance and the impact of financial restructuring in a macroeconomic framework : a new application," Policy Research Working Paper Series 1237, The World Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1105. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: http://edirc.repec.org/data/dvewbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.