A Framework for Managing Government Guarantees

Abstract

This series is produced by the Macroeconomics, Trade, and Investment (MTI) Global Practice of the World Bank. The papers in this series aim to provide a vehicle for publishing preliminary results on MTI topics to encourage discussion and debate. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. Citation and the use of material presented in this series should take into account this provisional character.

India’s Public Financial Management System: Need for Reforms and Way Forward

“…The importance of strictly controlling and monitoring sovereign guarantees was mentioned, earlier. Razlog, Irwin, and Morrison (2020) suggest a checklist of ideas to improve management of government guarantees. They note that legislating binding limits on guarantees and centralising the authority to grant guarantees can help in controlling them.…”

“…It may also be useful to frame guidelines and restrictions for the issuance of guarantees, such as specifying the circumstances in which they may be issued. Once a guarantee is issued, they must also be effectively recorded, reported, and monitored (Razlog, Irwin, & Morrison, 2020).…”

Leverage of Local State-Owned Enterprises, Implicit Contingent Liabilities of Government and Economic Growth

“…The payment of these liabilities depends on the occurrence of a specific event. Hence, these liabilities are known as implicit contingent liabilities [8,11,12]. The implicit contingent liabilities of local governments in China can be divided into three categories: constructive debts, consumer debts and the debts due to local governments' financing guarantees.…”