Basu, Kaushik
Fiscal Policy as an Instrument of Investment and Growth Basu, Kaushik [electronic resource] / Basu, Kaushik - Washington, D.C., The World Bank, 2014 - 1 online resource (19 p.) - Policy research working papers. World Bank e-Library. .
This paper investigates the role of fiscal guarantees in promoting infrastructure investment. Infrastructure is a critical driver of economic growth, but infrastructure entails significant up-front costs that yield benefits after a time lag. Investors hesitate to put their money down on private infrastructure ventures because of the long lag and governments do not give guarantees for reasons of fiscal prudence. The paper argues that governments and large investment guarantee agencies can in many situations give suitably-calibrated guarantees to private projects by exploiting the fact that a guarantee on one project can reduce the risk of another one failing. The paper works out the architecture of such guarantees, which can be fiscally prudent and yet boost investment, especially in infrastructure, and thereby promote growth.
10.1596/1813-9450-6850
Access to Finance
Bankruptcy and Resolution of Financial Distress
Debt Markets
Economic Growth
Emerging Markets
Finance and Financial Sector Development
Fiscal Guarantees
Infrastructure Investment
Monetary Policy
Non Bank Financial Institutions
Private Sector
Private Sector Development
Fiscal Policy as an Instrument of Investment and Growth Basu, Kaushik [electronic resource] / Basu, Kaushik - Washington, D.C., The World Bank, 2014 - 1 online resource (19 p.) - Policy research working papers. World Bank e-Library. .
This paper investigates the role of fiscal guarantees in promoting infrastructure investment. Infrastructure is a critical driver of economic growth, but infrastructure entails significant up-front costs that yield benefits after a time lag. Investors hesitate to put their money down on private infrastructure ventures because of the long lag and governments do not give guarantees for reasons of fiscal prudence. The paper argues that governments and large investment guarantee agencies can in many situations give suitably-calibrated guarantees to private projects by exploiting the fact that a guarantee on one project can reduce the risk of another one failing. The paper works out the architecture of such guarantees, which can be fiscally prudent and yet boost investment, especially in infrastructure, and thereby promote growth.
10.1596/1813-9450-6850
Access to Finance
Bankruptcy and Resolution of Financial Distress
Debt Markets
Economic Growth
Emerging Markets
Finance and Financial Sector Development
Fiscal Guarantees
Infrastructure Investment
Monetary Policy
Non Bank Financial Institutions
Private Sector
Private Sector Development