Dispelling Fiscal Illusions; How Much Progress Have Governments Made in Getting Assets and Liabilities on Balance Sheet?

When rights and obligations are not recognized as assets and liabilities on a government's balance sheet, the government's deficit can be reduced by selling unrecognized assets or incurring unrecognized liabilities. This paper examines how much has been done in 28 advanced economies since 2003 to recognize assets and liabilities and thus dispel the fiscal illusions that such transactions create. Good progress has been made in the recognition of some assets and liabilities, such as shares owned and accounts payable, but much less in others, such as pensions for civil servants.