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THE ACADEMY
OF FINANCIAL
MANAGEMENT
.

№ 2/2017

№ 2/2017

Nauk. pr. NDFI 2017 (2): 5–24
https://doi.org/10.33763/npndfi2017.02.005

PUBLIC FINANCES

GASANOV Sergіi 1

1SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0002-7454-0419


Fiscal risks and fiscal targeting in the system of public finance management under institutional uncertainty


The article reveals the impact of institutional uncertainty on fiscal risks features in the quasi-market economy. The author introduces the concept of “fundamental institutional uncertainty”, which characterizes the critical level or such depth of institutional uncertainty when both permanent “failures” or chronic institutional “malfunctions” of the state and specific, different from the classical situation, “failures” of market coordination mechanisms happen simultaneously, and the economic system functions as a quasi-market one. In terms of fundamental institutional uncertainty, the economic behavior of the state and business entities lacks rational signs. Political cycles become determinants of economic fluctuations and fiscal risks. The state and the national economy lose constitutionally organized features and acquire real oligarchically regulated features. Fundamental institutional uncertainty generates transaction costs of a special kind – “alternative coordination transaction costs” vital for the temporary retention of economic system collapse. Fiscal risks in a broad context are considered as activities or circumstances that could adversely affect the state fiscal system (including budgetary, tax and customs), the performance and sustainability of public finances in general. Fiscal targeting covers the processes of consensual political and economic policy-making, the adoption and observation of strategic priorities, medium-term constraints and rules of budget and tax policies to provide anti-cycle fiscal regulation, to ensure the sustainability of public finances and promote economic growth. Fiscal targeting and fiscal risks management should be implemented into the Ukrainian public financial management system.

Keywords:fundamental institutional uncertainty, fiscal risks, fiscal system, transaction costs of alternative coordination, budget policy priorities, fiscal targeting.

JEL: D81, Н61, Н63.


Gasanov S. . Fiscal risks and fiscal targeting in the system of public finance management under institutional uncertainty / S. . Gasanov // Наукові праці НДФІ. - 2017. - № 2. - C. 5-24.

Article original in Ukrainian (pp. 5 - 24) DownloadDownloads :1413
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