Is Fiscal Decentralization a Viable Option for Stable National Debt Management?

This chapter talks about the Bank of England as the UK's central bank, which was established in 1694 by a Charter granted by King William III and Queen Mary II under the authority of an Act of Parliament. It explains the principal object of the Act in creating the Bank as a vehicle for raising money for the government. It also discusses how the Bank was closely associated with the raising and management of the national debt since its inception, which is a function that the Bank retained until the creation of the UK Debt Management Office (DMO) in 1998. This chapter highlights how the Bank raised money by issuing of banknotes, which became widely used as a convenient means of making large—value payments. It points out that the Bank of England notes were not formally legal tender until 1833.

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The Right to Unilateral Repudiation of Odious, Illegal, and Illegitimate Sovereign Debt as a Human Rights Defence

Sovereign Debt and Human Rights ◽

10.1093/oso/9780198810445.003.0029 ◽

2018 ◽

pp. 536-554

Author(s):

Ilias Bantekas

Keyword(s):

Public Policy ◽

Human Rights ◽

International Law ◽

Sovereign Debt ◽

Debt Management ◽

Audit Committees ◽

Bilateral Investment Treaties ◽

National Debt ◽

Investment Treaties ◽

The Right

States enjoy the right to unilaterally denounce sovereign debt that is odious, illegal and illegitimate under strict circumstances. This entitlement does not exist where the debt(s) was/were incurred lawfully. A particular form of denunciation is sovereign insolvency, whose unilateral manifestation, is treated in practice by similar principles and responses as those apply mutatis mutandis to other forms of debt management. This chapter identifies, in addition to insolvency, five forms of unilateral debt denunciation that arise from the limited practice of states, which are moreover consistent with general international law. These are: (a) repudiation or non-enforcement of arbitral awards on public policy grounds; (b) denunciation on grounds of executive necessity and/or the right to fiscal/tax sovereignty; (c) direct unilateral repudiation on the basis of reports by national debt audit committees; (d) repudiation of contracts when creditor/investor violates human rights and of unconscionable concession contracts; (e) re-negotiation of bilateral investment treaties and concessions.

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Legislating Fiscal Imbalance: Using Tax Policy to Protect Fiscal Decentralization in the Argentine Congress

Publius The Journal of Federalism ◽

10.1093/publius/pjaa001 ◽

2020 ◽

Vol 50 (4) ◽

pp. 620-644

Author(s):

Alejandro Bonvecchi ◽

Ernesto Calvo ◽

Ernesto Stein

Keyword(s):

Tax Policy ◽

Fiscal Decentralization ◽

Debt Management ◽

Legislative Process ◽

Intergovernmental Transfers ◽

Common Pool ◽

Institutional Economic ◽

Political Incentives ◽

The Common ◽

Fiscal Imbalance

Abstract Why do common-pool problems persist over time in federations? The literature shows that macro institutional, economic, and political incentives facilitate bailouts through intergovernmental transfers and debt management. Little research, however, explores the legislative mechanisms that prevent common-pool problems from being effectively addressed. This article focuses on a most central mechanism: tax lawmaking. We argue that lawmakers, whose careers rest in the hands of provincial constituencies, administer the legislative process to promote bills that protect the federal transfers that finance vertical fiscal imbalances and to amend proposals that seek to change them. Using an expert-coded dataset designed to assess the direction and magnitude of tax policy change, as described by the amendments proposed by legislators to the full set of tax bills proposed to the Argentine Congress since 1983, we document the legislative dynamics underpinning the common-pool problems of decentralized fiscal federal arrangements.

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GOVERNMENT DEBT AS THE INTEGRAL PORTFOLIO OF ASSETS AND LIABILITIES GENERATED BY DEBT

Journal of Business Economics and Management ◽

10.3846/16111699.2013.815129 ◽

2013 ◽

Vol 15 (1) ◽

pp. 22-40 ◽

Cited By ~ 5

Author(s):

Aleksandras Vytautas Rutkauskas ◽

Viktorija Stasytytė ◽

Nijolė Maknickienė

Keyword(s):

Stochastic Optimization ◽

Optimization Technique ◽

Government Debt ◽

Debt Service ◽

Debt Management ◽

Technical Solution ◽

National Debt ◽

The Government ◽

Profit Value ◽

Stochastic Dimension

The paper analyses the possibilities of optimal government (national) debt management, trying to maximize the made-up net value for the debtor with the help of funds borrowed by the government. The integral portfolio of debtor assets and debt service liabilities, based on the borrowed funds, is chosen as a solution for the above-described problem. In the paper, an asset is understood as a position of government expenditures, where funds borrowed by the government are used and create a quantifiable profit (value) or the measurable damage or loss is avoided if funds are borrowed. Actually, liabilities are the main debt service positions. Naturally, the value generated by assets, as well as funds spent to settle the liabilities, could be analytically adequately evaluated only in stochastic dimension. Consequently, multidimensional multicriteria stochastic optimization technique is used as a technical solution to the formulated problem. In analytical decisions, the budget funds borrowed by the government are treated as marginal funds. Taking into account a completely new decision technique that has been invoked for government debt management, the methods of decisions are described quite particularly.

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Assessment of the State of Ukraine’s National Debt and Directions of its Optimizatio

THE PROBLEMS OF ECONOMY ◽

10.32983/2222-0712-2021-1-123-133 ◽

2021 ◽

Vol 1 (47) ◽

pp. 123-133

Author(s):

O. Y. Stoiko ◽

◽

I. A. Shubenko ◽

Keyword(s):

Interest Rates ◽

Financial System ◽

Threshold Level ◽

The State ◽

Debt Management ◽

International Standards ◽

National Debt ◽

Debt Structure ◽

State Budget ◽

Currency Exchange

The article aims at studying the current state of Ukraine's national debt and developing directions for its optimization. It is established that the currency component in the structure of Ukraine's national debt is slightly lower than the threshold level for the currency component in the debt structure set by the IMF for developing countries. This structure of Ukraine’s national debt indicates the dependence of the domestic financial system on currency exchange rate fluctuations and the need to increase foreign exchange costs for servicing debt obligations. The amount of debt on loans from international financial organizations and government agencies of foreign countries comprises about a third of the total amount of national and guaranteed debt, indicating significant support Ukraine receives from its international partners, especially from the International Monetary Fund. The currency component in Ukraine’s national and state-guaranteed debt indicates high vulnerability of its financial system to currency shocks. It is established that the structure of Ukraine’s national and state-guaranteed debt by types of interest rates is quite optimistic and indicates a low vulnerability of public finances to interest rate risks. The size of Ukraine’s national and state-guaranteed debt in hryvnia equivalent increased during 2013–2020 by more than 4.4 times, and its growth in USD was quite moderate. It is determined that during 2020 the size of Ukraine’s national and state-guaranteed debt increased by 27.7% in hryvnia equivalent, due to the following situations: financing the state budget deficit; the allocation of funds to combat COVID-19; national currency devaluation, etc. The ratio of national and state-guaranteed debt to GDP, reaching a maximum of 81.0% at the end of 2016, gradually decreased to 50.3% at the end of 2019, which corresponds to the norm established by the national legislation. However, the values of this index for the period under review exceed the threshold level of national debt set by international standards for countries with emerging markets (30-50% of GDP). It is shown that the 2013 2019 period saw a tendency to increase the total cost of repayment and servicing of Ukraine’s national debt, which creates the risk of refinancing national debt, causes additional pressure on the state budget and GDP, and limits Ukraine’s ability to finance its social and economic goals of social development. The main risks for Ukraine’s debt obligations are highlighted, and ways to optimize them are outlined. The need to establish a National Debt Management Agency, the activity of which would help reduce both the debt burden and the cost of public debt servicing, is substantiated.

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