The problem of climate change seems to be a tragedy of the commons: despite the global benefits of reducing green-house gas emissions, no individual has any incentive to reduce his or her own emissions. Yet many people are making efforts to reduce emissions and putting pressure on businesses and...

Government guarantees can help persuade private investors to finance valuable new infrastructure. But because their costs are hard to estimate and usually do not show up in the government's accounts, governments can be tempted to grant too many guarantees. Drawing on a diverse range of...

Public-private partnerships (PPPs) can appeal to governments because they offer a new way of providing public services that is possibly more efficient than traditional public finance. But they can also appeal to governments because they allow new investments to be undertaken without any...

Fiscal reporting is intended to warn of fiscal crises while there is still time to prevent them. The recent crisis thus seems to reveal a failure of fiscal reporting: before the crisis, even reports on fiscal risk typically did not mention banks as a possible source of fiscal problems. One...

Fiscal adjustment becomes like walking up the down escalator when growth-promoting spending is cut so much as to lower growth and thus the present value of future tax revenues to a degree that more than offsets the improvement in the cash deficit. Although short-term cash flows matter, a...

The early detection of state and local fiscal problems can help in resolving them quickly before they turn into crises. Early detection should be easier if subnational governments prepare high-quality accounts. A survey and case studies were therefore undertaken to investigate the nature of...