[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-113065-en":3,"doc-seo-113065-105":30,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":13,"seo_description":14,"update_tm":28,"read_time":29},113065,687197100911,"Himbo","https://ap-avatar.wpscdn.com/avatar/a000239b6f1da00475?x-image-process=image/resize,m_fixed,w_180,h_180&k=1782698725881665579",8,"Research & Report","The Business of the State - 4 - Fiscal Impact and Principles of State Support","Fiscal implications of state ownership are substantial, as businesses of the state (BOSs) provide essential services while generating both explicit and implicit fiscal costs and risks. BOSs can require budget injections to reflect their social role, while contingent liabilities arise through debt guarantees and recapitalization needs, especially for state-owned banks. The chapter analyzes fiscal impacts, illustrates the scale of recent COVID-19-related state support, and distills policy principles to design support that limits costs and mitigates downside risks.","Public Disc losure Authorized  \n4. Fiscal Impact of Businesses of the State and Principles  \nof State Support  \nPub lic Disc losure Authorized  \nIntroduction  \nThe fiscal implications of state ownership are significant. Businesses of the state (BOSs) are often tasked with providing services that generate important benefits (chapter 1) . The fiscal costs of BOSs include regular fiscal injections from the budget, in theory to compensate BOSs for their social role. Fiscal risks from BOSs include explicit contingent liabilities—largely debt guarantees—and implicit contingent liabilities, such as when fiscal injections are needed to recapitalize state-owned banks. 1 Liabilities generated by BOSs are a major concern for the overall debt exposure of governments (World Bank 2022a, 2022b) .  \nEven before the recent COVID-19 crisis, many low-and middle-income countries had accumulated debt burdens, pushing them into high risk of debt distress and leading to underinvestment and slow growth. During the financial crisis of 2008, governments channeled resources into the financial sector and other hard-hit sectors to avoid an even worse economic downturn. The COVID-19 pandemic further expanded state support2 for specific sectors and firms, including BOSs, adding to the financial stress of governments (Freund and Pesme 2021) .  \nToday, countries find themselves with limited fiscal space and greater macroeconomic vulnerability, in part due to state support provided during the pandemic. This chapter examines the fiscal impact of BOSs and illustrates the extent of state support to BOSs as part of the fiscal response to the recent COVID-19 crisis. It provides new evidence on state support and distills policy principles for the design of state support.  \n■ BOSs can pose large fiscal costs and risks. BOSs in many countries have a significant share in public sector balance sheets, reflecting their important role in the economy and in development.3 Despite the significant fiscal risks posed by BOSs, measuring the scope, performance, and associated risks of BOS portfolios across countries is difficult, given the dearth of publicly available data and the heterogeneity of ownership structures and state support measures.  \n■ Examples of the fiscal impact of state support to BOSs and private firms during past crises show that such support comes with benefits but is also associated with costs and risks. When comparing the benefits of state support to BOSs and private firms, BOSs are more likely to maintain their employment during crises than private firms. The evidence is mixed about whether BOSs maintain investment better than private firms during crises. And there is little evidence that BOSs support growth, although the institutional environment affects whether BOSs have positive or negative impacts on growth. But state support to BOSs and private firms is costly and can exacerbate fiscal pressures; it can also hamper long-term growth by distorting competition, undermining corporate governance, and leading to collusion, corruption, and moral hazard.  \n■ State support to BOSs and private firms needs to be designed and implemented in a way that minimizes costs and mitigates downside risks and potentially distortive impacts. Key policy principles of such state support include having clear objectives and prioritizing support, selecting the least distortive instruments, improving targeting and transparency, and including explicit sunset clauses and exit strategies.  \nFiscal Risks Stemming from BOSs  \nEstimating Fiscal Costs and Risks  \nIn countries where state-owned enterprises (SOEs) represent a large share of economic activity, they can pose risks to public finances (IMF 2021b). The important role of SOEsin those economies is reflected in their substantial portion of public sector balance sheets. SOEs account for the lion’s share (66 percent) of publicly financed infrastructure projects in low- and middle-income countries, making up 83 percent of the total","cbCaipZBbHIGcSBp","https://ap.wps.com/l/cbCaipZBbHIGcSBp","pdf",1040639,2,1,24,"English","en",105,"# Introduction\n## Fiscal risks stemming from BOSs\n### Estimating fiscal costs and risks\n## BOSs and the fiscal impact of state support\n## Policy principles for designing state support","[{\"question\":\"What fiscal costs and risks do businesses of the state (BOSs) create?\",\"answer\":\"BOSs generate regular budget injections to compensate for their social role and can create explicit contingent liabilities, such as debt guarantees. They also generate implicit risks, including recapitalization needs for state-owned banks when injections become necessary.\"},{\"question\":\"How does state support during crises affect governments’ fiscal stress?\",\"answer\":\"During the 2008 crisis, resources were channeled to the financial sector and other hard-hit areas, while the COVID-19 pandemic expanded state support to specific sectors and firms, including BOSs. This increases financial stress for governments, especially when fiscal space is limited.\"},{\"question\":\"Why is measuring BOS fiscal scope, performance, and risks difficult across countries?\",\"answer\":\"Measuring these factors is challenging due to limited publicly available data and because ownership structures and state support measures vary across countries, leading to heterogeneity in what can be assessed.\"}]",1784499649,60,{"code":4,"msg":31,"data":32},"ok",{"site_id":25,"language":24,"slug":33,"title":13,"keywords":34,"description":14,"schema_data":35,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":28},"the-business-of-the-state-4-fiscal-impact-and-principles-of-state-support","",{"@graph":36,"@context":85},[37,53,68],{"@type":38,"itemListElement":39},"BreadcrumbList",[40,44,47,50],{"item":41,"name":42,"@type":43,"position":21},"https://docshare.wps.com","Home","ListItem",{"item":45,"name":46,"@type":43,"position":20},"https://docshare.wps.com/document/","Document",{"item":48,"name":12,"@type":43,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":43,"position":52},"https://docshare.wps.com/document/the-business-of-the-state-4-fiscal-impact-and-principles-of-state-support/113065/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":24,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":41,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-21","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"What fiscal costs and risks do businesses of the state (BOSs) create?","Question",{"text":75,"@type":76},"BOSs generate regular budget injections to compensate for their social role and can create explicit contingent liabilities, such as debt guarantees. They also generate implicit risks, including recapitalization needs for state-owned banks when injections become necessary.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"How does state support during crises affect governments’ fiscal stress?",{"text":80,"@type":76},"During the 2008 crisis, resources were channeled to the financial sector and other hard-hit areas, while the COVID-19 pandemic expanded state support to specific sectors and firms, including BOSs. This increases financial stress for governments, especially when fiscal space is limited.",{"name":82,"@type":73,"acceptedAnswer":83},"Why is measuring BOS fiscal scope, performance, and risks difficult across countries?",{"text":84,"@type":76},"Measuring these factors is challenging due to limited publicly available data and because ownership structures and state support measures vary across countries, leading to heterogeneity in what can be assessed.","https://schema.org",{"og:url":51,"og:type":87,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":89,"canonical":51},"index,follow",{"doc_id":7,"site_id":25},{"code":4,"msg":5,"data":92},[93,97,101,105,109,114,119,122,127,130,134],{"id":21,"doc_module":4,"doc_module_name":46,"category_name":94,"show_sort_weight":95,"slug":96},"Story & Novel",90,"story-novel",{"id":20,"doc_module":4,"doc_module_name":46,"category_name":98,"show_sort_weight":99,"slug":100},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":46,"category_name":102,"show_sort_weight":103,"slug":104},"Exam",70,"exam",{"id":106,"doc_module":4,"doc_module_name":46,"category_name":107,"show_sort_weight":29,"slug":108},5,"Comic","comic",{"id":110,"doc_module":4,"doc_module_name":46,"category_name":111,"show_sort_weight":112,"slug":113},6,"Technology",50,"technology",{"id":115,"doc_module":4,"doc_module_name":46,"category_name":116,"show_sort_weight":117,"slug":118},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":46,"category_name":12,"show_sort_weight":120,"slug":121},30,"research-report",{"id":123,"doc_module":4,"doc_module_name":46,"category_name":124,"show_sort_weight":125,"slug":126},9,"Religion & Spirituality",20,"religion-spirituality",{"id":125,"doc_module":4,"doc_module_name":46,"category_name":128,"show_sort_weight":125,"slug":129},"World Cup","world-cup",{"id":131,"doc_module":4,"doc_module_name":46,"category_name":132,"show_sort_weight":131,"slug":133},10,"Lifestyle","lifestyle",{"id":135,"doc_module":4,"doc_module_name":46,"category_name":136,"show_sort_weight":106,"slug":137},19,"General","general"]