Mokdad, TanyaIrwin, Timothy2015-12-022015-12-022010https://hdl.handle.net/10986/23187Contingent liabilities create management problems for governments. They have a cost, but judging what the cost is and whether it is worth incurring is difficult. Except in the case of contingent liabilities created by simple guarantees of debt, governments usually can incur contingent liabilities without budgetary approval or recognition in the governments accounts. So governments may prefer contingent liabilities to other obligations. (The uncertainty surrounding contingent liabilities can work differently. It is well known that PPPs create contingent liabilities, and the International Monetary Fund (IMF), the World Bank, and others often warn of the risks. The initial reaction of a cautious Ministry of Finance may be to seek to avoid all contingent liabilities.) Management problems also arise once a government has incurred a contingent liability. Projects need to be monitored to reduce risks if possible. Spending on contingent liabilities must sometimes be forecast, despite the difficulty.en-USCC BY 3.0 IGOTARIFFSCONTINGENT LIABILITIESDEPOSITLIABILITYACCOUNTINGFINANCIAL MANAGEMENTVALUATIONCORPORATE TAX RATEINFORMATION TECHNOLOGYINTERESTRATE OF RETURNPUBLIC INVESTMENTSGUARANTEESGOVERNMENT SPENDINGPROPERTY RIGHTSEXCHANGEOPTIONDISCOUNT RATEORIGINAL CONTRACTTREASURIESPAYMENT SYSTEMDEVELOPING COUNTRIESPOLITICAL ECONOMYREVENUESLOANDISCOUNTRENEGOTIATIONTAXBUDGETINGBANKRUPTCYGOVERNMENT GUARANTEESINFLATIONINTERNATIONAL BANKCASH FLOWSCREDIBILITYBUDGETLACK OF TRANSPARENCYCURRENCYGOVERNMENT POLICYNATURAL DISASTERCONTRACT RENEGOTIATIONPUBLIC FUNDSDEBTSCONTRACTSFINANCESEXCHANGE RATESGUARANTEE FUNDOPTIONSMONETARY FUNDDEBTRETURNFINANCIAL FLOWSPUBLIC FINANCEDEPOSIT INSURANCELENDERSGROSS DOMESTIC PRODUCTNATIONAL TREASURYRULE OF LAWFINANCEFUTURE CASH FLOWSBANK POLICYPUBLIC INVESTMENTCONTINGENT LIABILITYEXPENDITURETRANSACTIONSAUCTIONSGUARANTEE FEESEQUITYTRANSACTIONINVESTORSOPPORTUNITY COSTGOODTAX RATEPRIVATE PARTYTRANSPARENCYFINANCIAL CRISISFUTUREMARKET PRICESGOVERNMENT GUARANTEEGOVERNMENT FINANCEFOREIGN INVESTMENTINVESTMENT PROJECTSLOAN GUARANTEESCONTRACTEXPENDITURESPROPERTYBIDSPHYSICAL ASSETSACCRUAL ACCOUNTINGOPPORTUNITY COSTSBALANCE SHEETDEFAULTCONCESSION ARRANGEMENTSMARKETFOREIGN EXCHANGEMARKET VALUESECURITIESTREASURYACCOUNTING STANDARDSHAREHOLDERSRENEGOTIATIONSINFRASTRUCTURE CONCESSIONSINSURANCEGOVERNMENT DEBTINTERESTSSECURITYACCOUNTING STANDARDSINVESTMENTOUTSTANDING DEBTSHARECONTRACTUAL OBLIGATIONBALANCE SHEETSPUBLIC FINANCESINFRASTRUCTURE FINANCEPOLITICAL STABILITYFINANCIAL ASSETSBIDREVENUEPROFITEXPROPRIATIONSINVESTMENTSRISK MANAGEMENTAMOUNT OF DEBTPRIVATE FINANCINGEXCHANGE RATELIABILITY MANAGEMENTPROFITSLIABILITIESMULTILATERAL LENDERSGUARANTEEDEVELOPMENT BANKCASH FLOWWorking PaperWorld Bank10.1596/23187