Another Look at Governments’ Balance Sheets: The Role of Nonfinancial Assets

45 Pages Posted: 8 Jun 2013

See all articles by Elva Bova

Elva Bova

Independent

Robert J. Dippelsman

International Monetary Fund (IMF) - Statistics Department

Kara Rideout

International Monetary Fund (IMF)

Andrea Schaechter

International Monetary Fund (IMF)

Date Written: May 2013

Abstract

When discussing debt reduction strategies, little attention has been given to the role of governments’ nonfinancial assets. This is in part because data are scarce. Drawing on various data sources, this paper looks at the size, composition, and management of state-owned nonfinancial assets across 32 economies, with particular focus on the advanced G-20 economies. We find that reported nonfinancial assets comprise mostly structures (such as roads and buildings) and,when valued, land. These assets have increased over time, mostly due to higher property and commodity prices, and are, in large part, owned by subnational governments. Many countries have launched reforms with a view to streamlining public administrations, but receipts and savings have been rather small so far. Governments tend to consider relatively small sets of assets to be disposable, though preferences could change in the future. A potential source for future revenues could be greater reliance on user charges, such as road tolls. In most cases, a first step for more effective asset management has to be the expansion and improvement of data compilation.

Keywords: Debt reduction, Debt strategy, Financial assets, Asset management, Asset prices, Cross country analysis, Fiscal risk, government statistics, fiscal policy, debt sustainability, government finance, government finance statistics, national accounts, public finances, public sector debt, net debt, financial accounting, government accounts, accounting practices, public debt, debt statistics, budget law, debt management, contingent liabilities, government debt, debt ratios, national accounts data, decentralization

JEL Classification: H11, H54, H63, E62

Suggested Citation

Bova, Elva and Dippelsman, Robert J. and Rideout, Kara and Schaechter, Andrea, Another Look at Governments’ Balance Sheets: The Role of Nonfinancial Assets (May 2013). IMF Working Paper No. 13/95, Available at SSRN: https://ssrn.com/abstract=2276353

Robert J. Dippelsman

International Monetary Fund (IMF) - Statistics Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Kara Rideout

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Andrea Schaechter

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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