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We study trading dynamics in an asset market where the quality of assets is private information and finding a counterparty takes time. When trading ceases in equilibrium as a response to an adverse shock to asset quality, a government can resurrect trading by buying up lemons which involves a financial loss. The optimal policy is centred around an announcement effect where trading starts already before the intervention for two reasons. First, delaying the intervention allows selling pressure to build up thereby improving the average quality of assets for sale. Secondly, intervening at a higher price increases the return from buying an asset of unknown quality. It is optimal to intervene immediately at the lowest price when the market is sufficiently important. For less important markets, when the shock to quality and search frictions are small, it is optimal to rely on the announcement effect. Here delaying the intervention and fostering the effect by intervening at the highest price tend to be complements.

Purpose There is shortage of global research on asset management (AM) by various central governments. This paper aims at reducing this gap. Design/methodology/approach This general review is based on literature, published government documents, agendas of specialized membership organizations (considered through the qualitative thematic analysis) and the authors’ experiences in advising governments on AM in 30 countries. The study focuses on three topics of recurrent interest among governments and AM experts: drivers of change and response trends; organizational models and attributes of good governance at public AM organizations. It also discusses whether the examined practices conform with New Public Management (NPM). Findings The paper identifies five key international drivers of change: austerity measures; an increased focus on performance management; changes in political and ideological agendas; technology and business operations changes; and the environmental sustainability agenda. It analyses response trends to these drivers, both positive and negative. Five dimensions of organizational settings that are important for AM are identified, demonstrating the great diversity of practices. The paper outlines governance elements specific to government AM and illustrates related challenges. It also shows that while current AM typically conforms with NPM, there are notable deviations, such as low corporatization and recentralization of AM. Research limitations/implications This paper is a broad review; in-depth study of specific aspects is left for further research. Originality/value The paper introduces new empirical knowledge about AM approaches at central governments into research discourse, with a broad thematic coverage not achieved before; contributes to the discussion of some hot underexplored topics; hypothesizes why current AM practices deviate from NPM doctrines; and provides unique insights for AM practitioners.

As growth and development in Africa increase rapidly, investment in infrastructure projects will often be best accomplished through public-private partnership. This Project Preparation Guide offers the foundation blocks for public sector engagement with the private sector. This book assesses the relevant issues for selecting a project for public-private partnership, the actions for preparing projects for market, and the management process The guide addresses hiring and managing expert advisers, explains how the public sector should interact with the private sector during the project selection and preparation phases to ensure that decisions during these phases are realistic, and analyzes the issues of engagement with the private sector during the tender and after a contract has been signed. 'Attracting Investor to African Public-Private Partnerships' will help the public sector in Africa to attract private sector investment through effective project advertising, management, and implementation. This book will enhance the chances of developing effective public-private partnerships by overcoming major obstacles to project delivery by having the right information, on the right projects, for the right partners, at the right time. This guide is aimed at African public sector officials who are concerned about the delivery of infrastructure projects and services through partnership with the private sector, as well as staff in donor institutions who are looking to support PPP programs at the country-level.

The private health sector was officially recognized in the Republic of Congo over 20 years ago June 6, 1988, establishing the conditions for the independent practice of medicine and the medical-related and pharmaceutical professions. The Congolese government recently expressed its commitment to working with the private health sector in order to strengthen the health system, improve the health of the population and preserve the basic human right to a healthy life through the National Health Care Policy, which it adopted in 2003, the 2007-2011 National Health Development Plan and the 2010 Health Care Services Development Program. Throughout these various documents there is an acknowledgement that the lack of coordination with the private health sector is a weakness of the health system. Nevertheless, the scarcity of information about the private sector in policy and planning documents suggests that the government's engagement with the private health sector is limited. There is no official government policy on the private health sector, or strategies or working plans to encourage cooperation between the public and private sectors. The objective of this assessment was to better determine the role, position, and importance of the private sector within the health system, in order to identify the limitations to its development as well as ways it can be integrated into the efforts to meet the objectives of the Plan national de developpement sanitaire (PNDS) [National Health Development Plan]. The World Bank Group contracted with the Results for Development Institute (R4D, United States) and Health Research for Action (HERA, Belgium) as well as with a team of local consultants, to conduct a 'study of the private health sector in the Republic of Congo.' This study was conducted in close collaboration with the Ministry of Health and Population (MSP), which arranged and oversaw a steering committee consisting of actors from the public and private sectors to facilitate and guide the study. The goal of the study and the workshops was a concrete plan of action for the health sector that could be used by the Congolese government, the private sector in the Republic of Congo, and international development partners. Certain aspects of the action plan should be included in the work programs of the Programme de developpement des services de sante (PDSS) [Health System Development Project] for the years 2011-2013.

Local self-governments in the Slovak Republic have many possibilities to do business to capitalize their assets and generate their own budget revenues. The purpose of the article was to identify and evaluate business companies through which local selfgovernments conduct business from different perspectives. We focused on businesses with asset ownership of municipalities with city status. When analyzing businesses, we have taken into account their size, spatial layout, legal form, subject of activity, and their economy. Slovak cities have a long-term experience with conducting business through business companies. Most of these are companies with 100% ownership of the cities, in terms of the legal form of a limited liability company. The research results confirm that the significant effect of government-run business is the increase in the value of assets.

This report addresses the large flood exposures of Central Europe and proposes efficient financial and risk transfer mechanisms to mitigate fiscal losses from natural catastrophes. In particular, the Visegrad countries (V-4) of Central Europe, namely, Poland, the Czech Republic, Hungary, and the Slovak Republic, have such tremendous potential flood damages that reliance on budgetary appropriations or even European Union (EU) funds in such circumstances becomes ineffective and does not provide needed cash funds for the quick response and recovery needed to minimize economic disruptions. The report is primarily addressed to the governments of the region, which should build into their fiscal planning the necessary contingent funding mechanisms, based on their exposures. The report is addressed to finance ministries and also to the insurance and securities regulators and the private insurance and capital markets, which may all play a role in the proposed mechanisms. An arrangement using a multi-country pool with a hazard-triggered insurance payout mechanism complemented by contingent financing is proposed, to better manage these risks and avoid major fiscal volatility and disruption.

Infrastructure plays a key role in fostering growth and productivity and has been linked to improved earnings, health, and education levels for the poor. Yet Latin America and the Caribbean are currently faced with a dangerous combination of relatively low public and private infrastructure investment. Those investment levels must increase, and it can be done. If Latin American and Caribbean governments are to increase infrastructure investment in politically feasible ways, it is critical that they learn from experience and have an accurate idea of future impacts. This book contributes to this aim by producing what is arguably the most comprehensive privatization impact analysis in the region to date, drawing on an extremely comprehensive dataset.

This paper analyzes the performance of the Bulgarian private defined contribution pensions in the second and third pillars of the pension system.

Several transition economies have undertaken fiscal decentralization reforms over the past two decades along with liberalization, privatization, and stabilization reforms. Theory predicts that decentralization may aggravate fiscal imbalances, unless the right incentives are in place to promote fiscal discipline. This paper uses a panel of 20 transition countries over 19 years to address a central question of fact: Did privatization help to promote local governments' fiscal discipline? The answer is clearly 'no' for privatization considered in isolation. However, privatization and subnational fiscal autonomy along with reforms to the banking system - restraining access to soft financing - may prove effective at improving fiscal balances among local governments.

This paper discusses proposals for common euro area sovereign securities. Such instruments can potentially serve two functions: in the short-term, stabilize financial markets and banks and, in the medium-term, help improve the euro area economic governance framework through enhanced fiscal discipline and risk-sharing. Many questions remain on whether financial instruments can ever accomplish such goals without bold institutional and political decisions, and, whether, in the absence of such decisions, they can create new distortions. The proposals discussed are also not necessarily competing substitutes; rather, they can be complements to be sequenced along alternative paths that possibly culminate in a fully-fledged Eurobond. The specific path chosen by policymakers should allow for learning and secure the necessary evolution of institutional infrastructures and political safeguards.