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Business and Economics > Finance: General

You are looking at 1 - 10 of 11 items for :

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Cover IMF Working Papers
Private Participation and its Discontents: Insights from Large-Scale Surveys
Silvia Albrizio
,
Hippolyte W. Balima
,
Bertrand Gruss
,
Eric Huang
, and
Colombe Ladreit
This paper investigates public attitudes toward product market regulation (PMR) reforms aimed at fostering private participation and competition in two network sectors—electricity and telecommunications. Despite the benefits of such reforms, including enhanced productivity and lower prices, they often face significant public resistance. We conduct large-scale surveys of 6,300 individuals in three emerging market and developing economies (Mexico, Morocco, and South Africa) to analyze the role of socioeconomic characteristics, beliefs, and perceptions in shaping support for PMR reforms. Our findings reveal that individual beliefs and perceptions, particularly those related to how policies work and market economy views, are major predictors of reform support. Randomized information treatments show that raising awareness about the costs of the status quo and the benefits of PMR reforms significantly increases public support. Among initially skeptical individuals, societal concerns play a larger role in respondents’ reasons for nonsupport, consistent with models of social preferences. However, offering tailored complementary and compensatory measures can further enhance support among those skeptical individuals.
Keywords:
Product market reforms; political economy; perceptions; survey; experiment; PMR reform; reform support; market economy view; policy support; market economy; Electricity; Competition; Commodity markets; Emerging and frontier financial markets; Africa
Cover IMF Staff Country Reports
Chile: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper studies renewable energy and attempts to estimate the gross domestic product (GDP) impact and assesses the role of policies in Chile. Chile has a comparative advantage in renewable energy. IMF estimates show that replacing coal power with solar and wind power, as announced by the government, could boost the long-term GDP level by at least 1 percentage point. The analysis indicates that the benefits of having targeted support for the transmission of electricity exceed costs. An additional benefit is the greater economic resilience to abrupt increases in coal and fuel prices that can have large negative impacts on the economy. A key constraint for the renewable energy sector is currently the transmission from where it is produced to where it is used. A cost-benefit analysis shows that state support industries, such as electricity transmission, may have economic benefits that outweigh the costs.
Keywords:
GDP impact; solvency risk; Chilean bank; Fintech firm; cybersecurity risk; Electricity; Cyber risk; Fintech; Energy sector; Financial inclusion; Global
Cover Finance & Development
Finance & Development, December 2022: The Scramble for Energy
International Monetary Fund. Communications Department
Finance & Development, December 2022
Keywords:
energy transition; West Indies cricket team; fossil fuel use; energy consumption; West Indies cricket journey; Renewable energy; Fuel prices; Non-renewable resources; Energy prices; Electricity; Europe; Global; Caribbean; Africa; Baltics
Cover Staff Discussion Notes
Fiscal Policy and Development: Human, Social, and Physical Investments for the SDGs
Vitor Gaspar
,
Mr. David Amaglobeli
,
Ms. Mercedes Garcia-Escribano
,
Delphine Prady
, and
Mauricio Soto
The goal of this paper is to estimate the additional annual spending required for meaningful progress on the SDGs in these areas. Our estimates refer to additional spending in 2030, relative to a baseline of current spending to GDP in these sectors. Toward this end, we apply an innovative costing methodology to a sample of 155 countries: 49 low- income developing countries, 72 emerging market economies, and 34 advanced economies. And we refine the analysis with five country studies: Rwanda, Benin, Vietnam, Indonesia, and Guatemala.
Keywords:
SDN; developing country; low-income developing countries; emerging market economy; spending; GDP; Sustainable Development Goals; Development; Fiscal Policy; equity-enhancing expenditure priority; spending pressure; enhancing spending efficiency; countries spend; spending estimate; Emerging and frontier financial markets; Sustainable Development Goals (SDG); Global; Sub-Saharan Africa; Asia and Pacific
Cover IMF Working Papers
Product Market Deregulation and Growth: New Country-Industry-Level Evidence
Romain Bouis
,
Mr. Romain A Duval
, and
Johannes Eugster
The paper investigates the economic effects of major product market reforms in some of the historically most protected non-manufacturing industries. It relies on a unique mapping between new annual data on reform shocks and sector-level outcomes for five network industries (electricity and gas, land transport, air transport, postal services, and telecommunications) in twenty-six countries spanning over three decades. The use of a threedimensional panel and careful instrumentation of reform shocks using external instruments enables us to control for economy-wide macroeconomic shocks and address possible sources of omitted variable bias more broadly. Using a local projection method, we find that major reductions in barriers to entry yield large increases in output and labor productivity over a five-year horizon, concomitant with a relative price decline. By contrast, there is only a weak positive effect on sectoral employment, and investment is essentially unaffected, suggesting that output gains from reform primarily reflect higher total factor productivity. It takes some time for these gains to materialize: effects become statistically significant two to three years after the reform, as prices start dropping, and productivity and output increase significantly. However, there is no evidence of any negative short-term cost from reform, including under weak macroeconomic conditions. These findings provide a clear case for intensifying product market reform efforts in advanced economies at the current juncture of weak growth.
Keywords:
WP; panel dataset; country-time-industry panel data; EU country; OECD indicator; time series; Structural reforms; deregulation; competition; entry barriers; product market; growth; sector observation; product market deregulation; labor productivity effect; land transport; Commodity markets; Transportation; Electricity; Employment; Labor productivity; Global
Cover IMF Working Papers
Power It Up: Strengthening the Electricity Sector to Improve Efficiency and Support Economic Activity
Gabriel Di Bella
and
Mr. Francesco Grigoli
Poor performance of the electricity sector remains a drag to economic efficiency and a bottleneck to economic activity in many low-income countries. This paper proposes a number of models that account for different equilibria (some better, some worse) of the electricity sector. They show how policy choices (affecting insolvency prospects or related to rules for electricity dispatching or tariff setting), stochastic generation costs, and initial conditions, affect investment in generation and electricity supply. They also show how credible (non-credible) promises of stronger enforcement to reduce theft result in larger (smaller) electricity supply, lower (higher) government subsidies, and lower (higher) tariffs and distribution losses, which in turn affect economic activity. To illustrate these findings, the paper reviews the experience of Haiti, a country stuck in a bad equilibrium of insufficient supply, high prices, and electricity theft; and that of Nicaragua, which is gradually transitioning to a better equilibrium of the electricity sector.
Keywords:
WP; economic activity; private sector; cash flow; Credible and Non-Credible Promises; Economic efficiency; Economic infrastructure; Electricity Sector; Electricity Theft; Haiti; Nicaragua; generation cost; distribution loss; objective function; electricity tariff; Electricity; Tariffs; Oil prices; Solvency; Government subsidies
Cover IMF Staff Country Reports
Belize: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This paper discusses three important sectors of Belize economy: financial, sugar market, and energy. Belize’s banking system has continued to strengthen since the 2014 Article IV Consultation in June 2014. Despite recent improvements, some banks’ balance sheets are still weak and exposed to adverse macroeconomic developments. The sugar sector makes a very important contribution to Belize’s economy. The sector is estimated to account for about 4-5 percent of GDP, 9-10 percent of total exports, 8 percent of employment, and 5-6 percent of foreign exchange earnings. But the reform of EU sugar regime, scheduled to take full effect in 2017, will most likely cause a significant drop in the EU sugar price.
Keywords:
ISCR; CR; Belize; rate; Belize energy sector; biomass; sugar price; energy policy framework; electric power grid; Co-Generation Energy Limited; sugar sector; EU reform; Belize's energy efficiency; Agricultural commodities; Commercial banks; Credit bureaus; Loans; Nonperforming loans; Caribbean; Global; Central America; Europe
Cover IMF Working Papers
Financing Infrastructure in India: Macroeconomic Lessons and Emerging Market Case Studies
Mr. James P Walsh
,
Jiangyan Yu
, and
Mr. Chanho Park
Driving infrastructure development, notably mobilizing financial resources for infrastructure projects, has been challenging in many countries. This study includes two parts: an empirical analysis of macroeconomic risks associated with infrastructure booms, and a case study of four emerging economies about their practice of funding infrastructure development. The study shows that (i) there is no empirical evidence that rapid infrastructure growth would undermine contemporary macroeconomic performance, implying that room is created to accommodate infrastructure booms without compromising fiscal and external sustainability; (ii) banks may play an important role in financing infrastructure, but caution is needed to avoid directed lending and regulatory forbearance that the authorities may use to promote financing; (iii) capital market development is important to accommodate the usually high financing needs, and encouraging private investors to move into infrastructure would require regulatory and institutional improvements; and (iv) public support, including credit guarantees, may help bolster investors' confidence, but the authorities should carefully monitor and manage fiscal risks.
Keywords:
WP; investment; market; Chile; infrastructure investment; bank; infrastructure financing; growth; capital market; public-private partnership; fixed income; financial support; preferred shares; corporate bond market; private equity; ordinary shares; policy bank; Infrastructure; Securities markets; Public investment and public-private partnerships (PPP); Electricity; Bonds; South America; North America; Global
Cover IMF Staff Country Reports
Dominican Republic: First Review Under the Stand-By Arrangement, Requests for Waivers of Applicability and Modification of Performance Criteria—Staff Report; Staff Supplement; Informational Annex; Press Release on the Executive Board Discussion.
International Monetary Fund
A 28-month Stand-By Arrangement (SBA) for the Dominican Republic was introduced against the global recession. The main objective of the program is to limit the procyclicality of policies. The countercyclical macroeconomic program improved confidence and fostered aggregate demand. Monetary policy remained accommodative with a record low policy rate. Fiscal policy became countercyclical. All structural benchmarks were observed. IMF staff supports the waiver requests and the completion of the first SBA review given the proposed actions and satisfactory performance.
Keywords:
ISCR; CR; modifications of performance criteria; waiver; request for waivers of applicability; request; la República Dominicana; fund staff estimate; program implementation; Public sector; Electricity; Fiscal stance; Tariffs; Global
Cover IMF Staff Country Reports
Dominican Republic: Second and Third Reviews Under the Stand-By Arrangement and Request for Waivers of Applicability—Staff Report; Staff Supplement; Informational Annex; Press Release on the Executive Board Discussion.
International Monetary Fund
In this study, against the background of deteriorating external conditions owing to the global crisis, a 28-month Stand-By Arrangement (SBA) for the Dominican Republic is reviewed. The objective is to limit the procyclicality of policies in the short term. The macroeconomic situation has improved significantly. All performance criteria and structural benchmarks were observed. IMF staff supports completion of the second and third SBA reviews and the targets proposed for 2011 in view of the positive macroeconomic performance. Additional measures have been introduced to meet program targets.
Keywords:
ISCR; CR; request for waivers of applicability; waiver; request; applicability; shrinking output gap; Dominican authorities; public sector arrears; electricity company; Public sector; Electricity; Basel Core Principles; Global