Quasi-Fiscal Activities, Hidden Government Subsidies, and Fiscal Adjustment in Armenia
Armenian International Policy Research Group Working Paper No. 03/06
38 Pages Posted: 1 Apr 2014
Date Written: January 25, 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.
Keywords: Armenia, quasi-fiscal transfers, subsidies, fiscal adjustment
JEL Classification: H20, H53, H62, H71
Suggested Citation: Suggested Citation