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Dispelling fiscal illusions: how much progress have governments made in getting assets and liabilities on balance sheet?

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  • Timothy C. Irwin

Abstract

When rights and obligations are not recognized as assets and liabilities on a government's balance sheet, the government's deficit can be reduced by selling unrecognized assets or incurring unrecognized liabilities. This paper examines how much has been done in 28 advanced economies since 2003 to recognize assets and liabilities and thus dispel the fiscal illusions that such transactions create. Good progress has been made in the recognition of some assets and liabilities, such as shares owned and accounts payable, but much less in others, such as pensions for civil servants.

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  • Timothy C. Irwin, 2016. "Dispelling fiscal illusions: how much progress have governments made in getting assets and liabilities on balance sheet?," Public Money & Management, Taylor & Francis Journals, vol. 36(3), pages 219-226, April.
    • Handle: RePEc:taf:pubmmg:v:36:y:2016:i:3:p:219-226
    DOI: 10.1080/09540962.2016.1133981
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    1. Mr. Timothy C Irwin, 2012. "Some Algebra of Fiscal Transparency: How Accounting Devices Work and How to Reveal Them," IMF Working Papers 2012/228, International Monetary Fund.
    2. Jagadeesh Gokhale & Kent Smetters, 2006. "Fiscal and Generational Imbalances: An Update," NBER Chapters, in: Tax Policy and the Economy, Volume 20, pages 193-223, National Bureau of Economic Research, Inc.
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    4. Rachel F Wang & Mr. Timothy C Irwin & Lewis K Murara, 2015. "Trends in Fiscal Transparency: Evidence from a New Database of the Coverage of Fiscal Reporting," IMF Working Papers 2015/188, International Monetary Fund.
    5. James L. Chan & Qi Zhang, 2013. "Government Accounting Standards and Policies," Palgrave Macmillan Books, in: Richard Allen & Richard Hemming & Barry H. Potter (ed.), The International Handbook of Public Financial Management, chapter 34, pages 742-766, Palgrave Macmillan.
    6. David Heald & George Georgiou, 2009. "Whole of government accounts developments in the UK: conceptual, technical and timetable issues," Public Money & Management, Taylor & Francis Journals, vol. 29(4), pages 219-227, July.
    7. Vincent Koen & Paul van den Noord, 2005. "Fiscal Gimmickry in Europe: One-Off Measures and Creative Accounting," OECD Economics Department Working Papers 417, OECD Publishing.
    8. J. Bradford DeLong & Lawrence H. Summers, 2012. "Fiscal Policy in a Depressed Economy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 43(1 (Spring), pages 233-297.
    9. Allan Barton, 2011. "Why Governments Should Use the Government Finance Statistics Accounting System," Abacus, Accounting Foundation, University of Sydney, vol. 47(4), pages 411-445, December.
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    1. De Simone Elina & Gaeta Giuseppe Lucio & Mourão Paulo Reis, 2017. "The Impact of Fiscal Transparency on Corruption: An Empirical Analysis Based on Longitudinal Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(4), pages 1-17, October.
    2. David Heald & Ron Hodges, 2018. "Accounting for government guarantees: perspectives on fiscal transparency from four modes of accounting," Accounting and Business Research, Taylor & Francis Journals, vol. 48(7), pages 782-804, November.
    3. Anna Białek‐Jaworska, 2022. "Revenue diversification and municipally owned companies’ role in shaping the debt of municipalities," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(4), pages 931-975, December.
    4. Christofzik, Désirée I., 2019. "Does accrual accounting alter fiscal policy decisions? - Evidence from Germany," European Journal of Political Economy, Elsevier, vol. 60(C).
    5. Timothy C. Irwin, 2020. "Accrual Accounting and the Government's Intertemporal Budget Constraint," Public Budgeting & Finance, Wiley Blackwell, vol. 40(4), pages 128-141, December.

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