Sovereign Wealth Funds in the Pacific Island Countries: Macro-Fiscal Linkages

31 Pages Posted: 25 Jan 2008

See all articles by Eric Le Borgne

Eric Le Borgne

International Monetary Fund (IMF)

Paulo A. Medas

International Monetary Fund (IMF)

Date Written: Janurary 2008

Abstract

This paper looks at the role Sovereign Wealth Funds have played in the Pacific Island Countries in achieving key macro-fiscal policy objectives, namely, protecting the budget from high revenue volatility and strengthening fiscal prospects. Evidence shows that the funds' effectiveness has been hampered by lack of integration with the budget, institutional weaknesses, and inadequate controls. These factors, together with weak asset management, have sometimes led to substantial financial losses and undermined fiscal policy. Funds, if well designed, could be used as a tool to support a sound fiscal framework, but should not be seen as a substitute for fiscal reforms.

Keywords: Fiscal policy, Pacific Island Countries, Economic stabilization

Suggested Citation

Le Borgne, Eric and Medas, Paulo A., Sovereign Wealth Funds in the Pacific Island Countries: Macro-Fiscal Linkages (Janurary 2008). IMF Working Paper No. 07/297, Available at SSRN: https://ssrn.com/abstract=1087176

Eric Le Borgne (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Paulo A. Medas

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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