Contingent Government Liabilities: Fiscal Threat to the Czech Republic?

A World Bank specialist on the effects of contingent liabilities on the fiscal position of transition and emerging-market economies examines the current situation in the Czech Republic, where the deliberate use of guarantees and other forms of off-budget support by the government has led to the accumulation of hidden liabilities. The paper first discusses how to identify, measure, and classify contingent liabilities and then outlines conceptual and measurement issues involved in assessing their impacts. The paper projects potential nearterm claims on budget resources stemming from defaults by borrowers covered by extant state guarantees. Journal of Economic Literature, Classification Numbers: E62, H50, H63. 1 figure, 10 tables, 13 references, appendix.