The fiscal implications of strategic investment funds
Strategic investment funds (SIFs) are instruments of economic and financial policy,
and the operations of these funds have important fiscal implications. These implications
span the full cycle of the SIFs’ operations, from funding, through capital allocation,
to operations and maintenance of the invested assets. SIFs with a capacity to deploy
capital efficiently have the potential to increase the effectiveness of the public
expenditure programmes in the SIFs’ respective home countries. However, the establishment
and operations of SIFs also carry important fiscal risks, which need to be recognised
and addressed. This paper considers the flows of capital into and out of SIFs, as
well as the relationship of these flows to the fiscal framework and macro-fiscal context
of the SIFs’ home countries. It also looks at the fiscal liabilities that can result
from SIFs’ activities, and from their possible insolvency and bankruptcy, offering
suggestions for how these risks can be mitigated.
Published on December 20, 2021
In series:OECD Development Policy Papersview more titles