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

December 1, 2007

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Paulo A Medas, and Eric Le Borgne. Sovereign Wealth Funds in the Pacific Island Countries: Macro-Fiscal Linkages, (USA: International Monetary Fund, 2007) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Budget planning and preparation, Extra-budgetary funds, Fiscal policy, Public financial management (PFM), Sovereign wealth funds

Keywords: Annual budget, Cash management, Tuvalu fund, Withdrawal rule, WP

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/297
Stock No:

WPIEA2007297
ISBN:

9781451868609
ISSN:

1018-5941

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