Give Growth and Macroeconomic Stability in Russia a Chance : Harden Budgets by Eliminating Nonpayments
The authors analyze the links between Russias disappointing growth performance in the second half of the 1990s, its costly and unsuccessful stabilization, the macroeconomic meltdown of 1998, and the spectacular rise of non-payments. Non-payments fl...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2000/04/693414/give-growth-macroeconomic-stability-russia-chance-harden-budgets-eliminating-nonpayments http://hdl.handle.net/10986/22208 |
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okr-10986-222082021-04-23T14:04:06Z Give Growth and Macroeconomic Stability in Russia a Chance : Harden Budgets by Eliminating Nonpayments Pinto, Brian Drebentsov, Vladimir Morozov, Alexander AFFILIATES AGRICULTURE ASSETS BANK LOANS BORROWING CAPITAL GAINS CASH COLLECTIONS CHEMICAL INDUSTRY CORPORATE GOVERNANCE DEBT FINANCING DEFAULT RISK DEVALUATION DISINFLATION ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC RESOURCES ELECTRICITY ELECTRICITY GENERATION EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EVASION EXCHANGE RATE EXPENDITURES EXPORTS FINANCING SOURCES FISCAL DEFICITS FISCAL REFORMS FORECASTS GDP GOVERNMENT SPENDING GOVERNMENT SUBSIDIES GROWTH RATE HARD BUDGET CONSTRAINTS INCENTIVE EFFECTS INFLATION INSURANCE INTEREST RATES LIQUIDITY MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARGINAL COSTS MARKET ECONOMIES MARKET PRICES MONOPOLIES NEGATIVE EXTERNALITIES OIL OIL PRICES PAYMENT ARREARS PENALTIES PENSIONS PRICE DISCRIMINATION PRIVATE SECTOR PRIVATIZATION PUBLIC DEBT PUBLIC SERVANTS PUBLIC SPENDING REAL GDP REAL INTEREST RATE REAL SECTOR SAVINGS SIDE PAYMENTS SOFT BUDGET CONSTRAINTS STATE ENTERPRISES SUBNATIONAL GOVERNMENTS TAX TAX COLLECTION TAX COMPLIANCE TAXATION TRADE BALANCE TRANSITION ECONOMIES TRANSPARENCY TRANSPORT TREASURY TURNOVER TAXES UTILITIES VALUE ADDED WAGES The authors analyze the links between Russias disappointing growth performance in the second half of the 1990s, its costly and unsuccessful stabilization, the macroeconomic meltdown of 1998, and the spectacular rise of non-payments. Non-payments flourished in an environment of fundamental inconsistency between a macroeconomic policy geared at sharp disinflation, and a microeconomic policy of bailing enterprises out through soft budget constraints. Heavy untargeted implicit subsidies flowing through the non-payments system (amounting to 10 percent of GDP annually) have stifled growth, contributed to the August 1998 meltdown, through their impact on public debt, and have made at best a questionable contribution to equity. Dismantling this system must be a top priority, along with promoting enterprise restructuring and growth (by hardening budget constraints) and medium-term macroeconomic stability (by reducing the size of subsidies). Getting the government out of the non-payments system means settling all appropriately controlled budgetary expenditures on time, and in cash, and eschewing spending arrears, thereby setting an example for enterprises, and laying the groundwork for eliminating tax offsets at all levels of government, and insisting on cash tax payments. To stop energy-related subsidies, would require not only that the government pay its own energy bills on time, and in cash, but also that the energy monopolies be empowered to disconnect non-paying clients. This will enable the government to insist that the energy monopolies in turn pay their own taxes in full, and on time. 2015-07-17T17:42:14Z 2015-07-17T17:42:14Z 2000-04 Working Paper http://documents.worldbank.org/curated/en/2000/04/693414/give-growth-macroeconomic-stability-russia-chance-harden-budgets-eliminating-nonpayments http://hdl.handle.net/10986/22208 English en_US Policy Research Working Paper;No. 2324 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Russian Federation |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AFFILIATES AGRICULTURE ASSETS BANK LOANS BORROWING CAPITAL GAINS CASH COLLECTIONS CHEMICAL INDUSTRY CORPORATE GOVERNANCE DEBT FINANCING DEFAULT RISK DEVALUATION DISINFLATION ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC RESOURCES ELECTRICITY ELECTRICITY GENERATION EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EVASION EXCHANGE RATE EXPENDITURES EXPORTS FINANCING SOURCES FISCAL DEFICITS FISCAL REFORMS FORECASTS GDP GOVERNMENT SPENDING GOVERNMENT SUBSIDIES GROWTH RATE HARD BUDGET CONSTRAINTS INCENTIVE EFFECTS INFLATION INSURANCE INTEREST RATES LIQUIDITY MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARGINAL COSTS MARKET ECONOMIES MARKET PRICES MONOPOLIES NEGATIVE EXTERNALITIES OIL OIL PRICES PAYMENT ARREARS PENALTIES PENSIONS PRICE DISCRIMINATION PRIVATE SECTOR PRIVATIZATION PUBLIC DEBT PUBLIC SERVANTS PUBLIC SPENDING REAL GDP REAL INTEREST RATE REAL SECTOR SAVINGS SIDE PAYMENTS SOFT BUDGET CONSTRAINTS STATE ENTERPRISES SUBNATIONAL GOVERNMENTS TAX TAX COLLECTION TAX COMPLIANCE TAXATION TRADE BALANCE TRANSITION ECONOMIES TRANSPARENCY TRANSPORT TREASURY TURNOVER TAXES UTILITIES VALUE ADDED WAGES |
| spellingShingle |
AFFILIATES AGRICULTURE ASSETS BANK LOANS BORROWING CAPITAL GAINS CASH COLLECTIONS CHEMICAL INDUSTRY CORPORATE GOVERNANCE DEBT FINANCING DEFAULT RISK DEVALUATION DISINFLATION ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC RESOURCES ELECTRICITY ELECTRICITY GENERATION EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EVASION EXCHANGE RATE EXPENDITURES EXPORTS FINANCING SOURCES FISCAL DEFICITS FISCAL REFORMS FORECASTS GDP GOVERNMENT SPENDING GOVERNMENT SUBSIDIES GROWTH RATE HARD BUDGET CONSTRAINTS INCENTIVE EFFECTS INFLATION INSURANCE INTEREST RATES LIQUIDITY MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARGINAL COSTS MARKET ECONOMIES MARKET PRICES MONOPOLIES NEGATIVE EXTERNALITIES OIL OIL PRICES PAYMENT ARREARS PENALTIES PENSIONS PRICE DISCRIMINATION PRIVATE SECTOR PRIVATIZATION PUBLIC DEBT PUBLIC SERVANTS PUBLIC SPENDING REAL GDP REAL INTEREST RATE REAL SECTOR SAVINGS SIDE PAYMENTS SOFT BUDGET CONSTRAINTS STATE ENTERPRISES SUBNATIONAL GOVERNMENTS TAX TAX COLLECTION TAX COMPLIANCE TAXATION TRADE BALANCE TRANSITION ECONOMIES TRANSPARENCY TRANSPORT TREASURY TURNOVER TAXES UTILITIES VALUE ADDED WAGES Pinto, Brian Drebentsov, Vladimir Morozov, Alexander Give Growth and Macroeconomic Stability in Russia a Chance : Harden Budgets by Eliminating Nonpayments |
| geographic_facet |
Europe and Central Asia Russian Federation |
| relation |
Policy Research Working Paper;No. 2324 |
| description |
The authors analyze the links between
Russias disappointing growth performance in the second half
of the 1990s, its costly and unsuccessful stabilization, the
macroeconomic meltdown of 1998, and the spectacular rise of
non-payments. Non-payments flourished in an environment of
fundamental inconsistency between a macroeconomic policy
geared at sharp disinflation, and a microeconomic policy of
bailing enterprises out through soft budget constraints.
Heavy untargeted implicit subsidies flowing through the
non-payments system (amounting to 10 percent of GDP
annually) have stifled growth, contributed to the August
1998 meltdown, through their impact on public debt, and have
made at best a questionable contribution to equity.
Dismantling this system must be a top priority, along with
promoting enterprise restructuring and growth (by hardening
budget constraints) and medium-term macroeconomic stability
(by reducing the size of subsidies). Getting the government
out of the non-payments system means settling all
appropriately controlled budgetary expenditures on time, and
in cash, and eschewing spending arrears, thereby setting an
example for enterprises, and laying the groundwork for
eliminating tax offsets at all levels of government, and
insisting on cash tax payments. To stop energy-related
subsidies, would require not only that the government pay
its own energy bills on time, and in cash, but also that the
energy monopolies be empowered to disconnect non-paying
clients. This will enable the government to insist that the
energy monopolies in turn pay their own taxes in full, and
on time. |
| format |
Working Paper |
| author |
Pinto, Brian Drebentsov, Vladimir Morozov, Alexander |
| author_facet |
Pinto, Brian Drebentsov, Vladimir Morozov, Alexander |
| author_sort |
Pinto, Brian |
| title |
Give Growth and Macroeconomic Stability in Russia a Chance : Harden Budgets by Eliminating Nonpayments |
| title_short |
Give Growth and Macroeconomic Stability in Russia a Chance : Harden Budgets by Eliminating Nonpayments |
| title_full |
Give Growth and Macroeconomic Stability in Russia a Chance : Harden Budgets by Eliminating Nonpayments |
| title_fullStr |
Give Growth and Macroeconomic Stability in Russia a Chance : Harden Budgets by Eliminating Nonpayments |
| title_full_unstemmed |
Give Growth and Macroeconomic Stability in Russia a Chance : Harden Budgets by Eliminating Nonpayments |
| title_sort |
give growth and macroeconomic stability in russia a chance : harden budgets by eliminating nonpayments |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2000/04/693414/give-growth-macroeconomic-stability-russia-chance-harden-budgets-eliminating-nonpayments http://hdl.handle.net/10986/22208 |
| _version_ |
1764449795952345088 |