Quasi-fiscal activities, hidden government subsidies, and fiscal adjustment in Armenia

Freinkman, Lev and Gyulumyan, Gohar and Kyurumyan, Artak (2002): Quasi-fiscal activities, hidden government subsidies, and fiscal adjustment in Armenia. Published in: World Bank Working Paper No. 16 (2003)

Abstract

This paper aims to develop a detailed analysis of quasi-fiscal deficits and subsidies, and their impact on Armenia’s fiscal performance in the second part of the 90-s. Based on the flow-of-funds approach, we estimate the magnitude of the quasi-fiscal deficits and the incidence of quasi-fiscal subsidies in Armenia, as well as identify main recipients and donors of quasi-fiscal financing. The main finding of the paper is that, while quasi-fiscal deficits in Armenia remain considerable, their recent decline has been the main source of fiscal adjustment in Armenia to date. The paper also shows that the population remains a major ultimate recipient of quasi-fiscal subsidies. Thus, the main distortive impact of quasi-fiscal subsidies is on social policy, not on enterprise restructuring and private sector performance.

• Item Type: MPRA Paper
• Language: English
• Keywords: Armenia, subsidies, fiscal adjustment, quasi-fiscal deficit, losses in the energy sector
• Subjects: H - Public Economics > H6 - National Budget, Deficit, and Debt > H62 - Deficit ; Surplus; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H20 - General; P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P35 - Public Economics; H - Public Economics > H8 - Miscellaneous Issues > H81 - Governmental Loans ; Loan Guarantees ; Credits ; Grants ; Bailouts

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