1887

OECD Journal on Budgeting

The OECD journal on public sector budgeting, published three times per year. It draws on the best of the recent work of the OECD Working Party of Senior Budget Officials (SBO), as well as special contributions from finance ministries, and makes it available to a wider community in an accessible format. The journal provides insight on leading-edge institutional arrangements, systems and instruments for the allocation and management of resources in the public sector. Now published as a part of the OECD Journal subscription package.

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How to deal with contingent liabilities – Lessons from the Dutch experience

commission has reviewed all the guarantees, loans and financial interventions provided by the Dutch government. This review shows that policy makers often perceive these measures as a “free lunch”, do-not-ask (sufficiently high) premiums and do-not-build reserves to cover potential damages. The commission concluded that the Dutch government needs to reduce these measures where possible (e.g. by including sunset clauses), implement policies that reduce implicit risks, increase transparency, and consider asking for an external opinion regarding premiums in case of large and complex risks. Also internationally, an increased focus on budget systems that ensure transparency and provide the right incentives is necessary, as in recent years contingent liabilities increased while government finances deteriorated, making countries less resilient to these risks. Countries seem to use very different definitions and reporting methods with regard to contingent liabilities, making an international comparison and monitoring very difficult.

English

Keywords: Budget systems, contingent liabilities, the Netherlands, fiscal policy, sunset clauses, risk management
JEL: H81: Public Economics / Miscellaneous Issues / Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts; H12: Public Economics / Structure and Scope of Government / Crisis Management; H61: Public Economics / National Budget, Deficit, and Debt / National Budget; Budget Systems; H87: Public Economics / Miscellaneous Issues / International Fiscal Issues; International Public Goods
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