Description: Monitoring Fiscal Risks of Subnational Governments

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Monitoring Fiscal Risks of Subnational Governments

Growing experience with decentralization indicates that a country's public finance system suffers when subnational governments expose themselves to excessive risk. But central governments often lack the information needed to monitor the fiscal...

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Bibliographic Details
Main Authors:	Ma, Jun, Polackova, Hana
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AUDITING BOND ISSUES BORROWING BORROWING POLICIES BUDGET DEFICIT CENTRAL GOVERNMENT CREDIT RATINGS CREDIT RISK CREDITWORTHINESS DEBT DEBT SERVICE DECENTRALIZATION DISTRICTS FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL PLANNING FISCAL FISCAL BALANCE FISCAL CRISES FISCAL PRESSURES FOREIGN BORROWING INTEREST INCOME INTERGOVERNMENTAL FINANCE LOCAL AUTHORITIES LOCAL GOVERNMENT MORAL HAZARD MUNICIPALITIES NONTAX REVENUE PRESIDENCY PUBLIC FINANCE REVENUE CAPACITY REVENUE GROWTH REVENUE SHARING SAVINGS SENATE SOCIAL SECURITY SOCIAL WELFARE SUBNATIONAL FINANCES SUBNATIONAL GOVERNMENT SUBNATIONAL GOVERNMENTS TAX TAX REVENUE TRANSITION ECONOMIES WAGES FISCAL ADMINISTRATION RISK MANAGEMENT INTERGOVERNMENTAL FISCAL RELATIONS DEBT CRISIS CENTRAL BANKS POLITICAL PRESSURE ECONOMIC INDICATORS LIQUIDITY SOLVENCY CAPITAL REQUIREMENTS CREDIT CONTROL DEBT REPORTING SYSTEM INFORMATION GAPS GOVERNMENT ROLE
Online Access:	http://documents.worldbank.org/curated/en/2002/03/2011709/monitoring-fiscal-risks-subnational-governments http://hdl.handle.net/10986/11355

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Summary:	Growing experience with decentralization indicates that a country's public finance system suffers when subnational governments expose themselves to excessive risk. But central governments often lack the information needed to monitor the fiscal risks of subnational governments. Several countries, having experienced subnational fiscal crises, have established systems to monitor such risks. These systems assess subnational fiscal health and call for central government attention-and possible intervention-if preset indicators of fiscal imprudence are exceeded. In developing countries such systems also provide useful information for subnational credit ratings. This note describes several country experiences with indicators of subnational fiscal risks, identifies some limitations of such indicators, and suggests alternative indicators.