№ 9/2019

Fìnansi Ukr. 2019 (9): 64–80https://doi.org/10.33763/finukr2019.09.064

PUBLIC FINANCE MANAGEMENT

IVANYTSKA Olga ¹, KOSHCHUK Tetiana ²

¹National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”
OrcID ID : https://orcid.org/0000-0001-5505-8849
²SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0003-1013-4603

Analysis of approaches to fiscal risk management in the context of world experience

The article outlines the main approaches to managing fiscal risks in the practice of financial management in Ukraine and developed countries of the world. Issues related to the degree of reflection in national documents, in particular, in the Strategy for the reform of the public finance management system for 2017-2020 and in the Methodology for Fiscal Risk Assessment, the main fiscal risks identified in international instruments and those that reflect the national peculiarities of public finance construction, are disclosed. The necessity of supplementing the current list of fiscal risks, in particular, those related to the activities of local self-government bodies as well as risks connected with using the exhaustive natural resources and overcoming environmental problems, is substantiated. Measures to minimize fiscal risks are outlined and proposals for the use of additional tools known in international practice are substantiated. It is proved that Ukraine has to take into account IMF recommendations for analyzing and disclosing fiscal risks in the direction of long-term analysis of fiscal sustainability. It is proposed to introduce changes to the institutional mechanism of fiscal risk management, which will provide an effective response to the challenges and threats to the imbalance of public finances in Ukraine. Particularly, the state authorities responsible for managing specific fiscal risks must have a strategy and tactics for minimizing them. There must be a coordinated activity between government bodies entrusted with the management of individual fiscal risks. They should identify structural units that will submit to the Ministry of Finance information on relevant risks for the previous year, quarterly, as well as for the planned and the next two budget periods. The Ministry of Finance, based on the results of the analysis of fiscal risks, should make recommendations for adjusting measures to prevent the negative impact of the respective risks on the state budget.

Keywords:fiscal risks, fiscal risk management, fiscal sustainability, macroeconomic risks, specific risks

JEL: F61, G28, H61, O32

IVANYTSKA O. . Analysis of approaches to fiscal risk management in the context of world experience / O. . IVANYTSKA, T. . Koshchuk // Фінанси України. - 2019. - № 9. - C. 64-80.

Article original in Ukrainian (pp. 64 - 80)

Download

Downloads :278

1. Andersen, T. M. (2012). Fiscal sustainability and fiscal policy targets. Economics Working Papers, 15. Retrieved from pdfs.semanticscholar.org/3980/92720fb3d0c22e0e20a99c480962f15a30c7.pdf.

2. Burnside, C. (Ed.). (2005). Fiscal sustainability in theory and practice: a handbook.
doi.org/10.1596/978-0-8213-5874-0

3. Bi, H. (2017). Fiscal Sustainability: A Cross-Country Analysis. Economic Review, 4th q.
doi.org/10.18651/ER/4q17Bi

4. Cebotari, A. et al. (Eds). (2008). Fiscal risks: sources, disclosure, and management. Washington, DC: International Monetary Fund. Retrieved from www.imf.org/external/pubs/ft/dp/2009/dp0901.pdf.

5. Gasanov, S. S. (2017). Fiscal risks and fiscal targeting in the system of public finance management under institutional uncertainty. RFI Scientific Papers, 2, 5-24 [in Ukrainian].
doi.org/10.33763/npndfi2017.02.005

6. Iefymenko, T. I. (2017). Fiscal space and stabilization of public finance. Finance of Ukraine, 9, 7-28 [in Ukrainian].
doi.org/10.33763/finukr2017.09.007

7. Kudriashov, V. P. (2016). Risks of state budget execution and mechanisms of their limitation. Finance of Ukraine, 12, 59-76 [in Ukrainian].

8. Lunina, I. O. (Ed.). (2014). Development of public finances of Ukraine in the conditions of globalization. Kyiv: NAN Ukrainy, Instytut ekonomiky ta prohnozuvannia [in Ukrainian].

9. Bohdan, I. V., Yara, T. Yu., & Konovalenko, D. V. (2016). Diagnostics of general government position in Ukraine. Finance of Ukraine, 4, 27-49 [in Ukrainian].

10. Bohdan, I. V., Konovalenko, D. V., & Yara, T. Yu. (2018). Economic mathematical models for the diagnostics of fiscal policy. Finance of Ukraine, 3, 43-66 [in Ukrainian].
doi.org/10.33763/finukr2018.03.043

11. Bashko, V. Y. (2014). The essence of quasi-fiscal operations, their types and consequences (on example of the national joint stock company "Naftogaz of Ukraine"). Finance of Ukraine, 10, 87-96 [in Ukrainian].

12. Bashko, V. Y. (2018). Fundamental factors of the foreign exchange course in Ukraine. Finance of Ukraine, 9, 25-44 [in Ukrainian].

13. Kudriashov, V. P. (2018). Management of budget operations according to fiscal rules. Finance of Ukraine, 12, 31-51 [in Ukrainian].
doi.org/10.33763/finukr2018.12.031

14. Ivanytska, O. M., Koshchuk, T. V. (2018). Methodological grounds of fiscal risks identification. Finance of Ukraine, 6, 45-57 [in Ukrainian].
doi.org/10.33763/finukr2018.06.045

15. Lunina, I. O. (2017). Risks of the long-term solvency of the state. Finance of Ukraine, 4, 7-20 [in Ukrainian].
doi.org/10.33763/finukr2017.04.007

16. IMF. (n. d.). The Fiscal Transparency Code. Retrieved from blog-pfm.imf.org/files/ft-code.pdf.

17. Cabinet of Ministers of Ukraine. (2017). Strategy for reforming the public finance management system for 2017-2020 (Decree No. 142-p, February 8). Retrieved from www.kmu.gov.ua/control/uk/cardnpd?docid=249797370 [in Ukrainian].

18. Cabinet of Ministers of Ukraine. (2019). Methodology for assessing fiscal risks (Decree No. 351, April 24). Retrieved from www.kmu.gov.ua/ua/npas/pro-zatverdh-rizikiv [in Ukrainian].

19. IMF. (2016, June). Analyzing and Managing Fiscal Risks - Best Practices. Retrieved from www.imf.org/external/np/pp/eng/2016/050416.pdf.

20. IMF. (2018, April). Pillar III: Fiscal Risk Analysis and Management. Retrieved from www.elibrary.imf.org/view/IMF069/24788-9781484331859/24788-9781484331859/ch04.xml?redirect=true.

21. IMF. (2018, June). Austria: Fiscal Transparency Evaluation. Retrieved from www.imf.org/en/Publications/CR/Issues/2018/06/27/Austria-Fiscal-Transparency-Evaluation-46025.

22. World Bank. (2018, January). Establishing a Fiscal Risk Management Department in the Ministry of Finance of Serbia. Retrieved from documents.worldbank.org/curated/pt/135671490766760364/pdf/113855-WP-Establishing-a-fiscal-risk-management-department-in-the-Ministry-of-finance-of-Serbia-PUBLIC.pdf.

23. Office for Budget Responsibility. (2017, July). Fiscal risks report of United Kingdom. Presented to Parliament by the Economic Secretary to the Treasury by Command of Her Majesty. Retrieved from cdn.obr.uk/July_2017_Fiscal_risks.pdf.

24. Korotun, V. I. (Ed.). (2018). Dialectics of tobacco excise tax reform in Ukraine: the European integration aspect. Kyiv: Alerta [in Ukrainian].

25. Ministry of Finance of Ukraine. (2019). The five-month state budget is surplus. Retrieved from www.minfin.gov.ua/news/view/derzhavnyi-biudzhet-za-piat-misiatsiv-zvedeno-z-profitsytom?category=bjudzhet [in Ukrainian].

26. Verkhovna Rada of Ukraine. (2017). About financial statements audit and auditing (Act No. 2258-VIII, December 21). Retrieved from zakon.rada.gov.ua/laws/show/2258-19 [in Ukrainian].

27. Ivanytska, O. M., Koshchuk, T. V. (2017). Fiscal risks management related to activities of state enterprises in Ukraine. Finance of Ukraine, 2, 64-80 [in Ukrainian].
doi.org/10.33763/finukr2017.02.064

28. Ministry of Finance of Finland. (2017). Overview of Central Government Risks and Liabilities, Spring 2017. Retrieved from julkaisut.valtioneuvosto.fi/bitstream/handle/10024/80061/Overview%20of%20Central%20Governmenet%20Risks.pdf?sequence=1.