Identifying and Mitigating Fiscal Risks from State-Owned Enterprises (SOEs)

This paper focuses on the fiscal risks created by state-owned enterprises (SOEs). It analyzes the main sources of such risks, in particular flaws in their fiscal, including quasi-fiscal operations; excessive extraction of SOEs resources by their owner governments; preferential access of SOEs to financing; and information asymmetries between the SOEs and their owners. These are illustrated with reference to selected country experiences, mainly in Latin America. Based on this analysis, the paper outlines a number of policy recommendations to identify and mitigate such risks.