Robert S. Kravchuk

An historical analysis of the use of debt-related derivatives by state governments in the context of the great recession

Debt-related financial derivative usage by state and local governments became a very salient topic over the last few years in light of the Great Recession and its impacts on the efficacy of these financial instruments. However, there has been a dearth of systematic research on the types and kinds of derivatives state and local governments have actually employed in recent years. While anecdotes of financial derivative usage has grabbed the headlines (such as the case of Jefferson County, Alabama), there has been little research examining the derivative portfolios among states or local governments pre- and post-Great Recession. Using descriptive research, this paper attempts to rectify this gap in the literature for state governments as a means of better understanding how the recent financial crisis has impacted the critical debt management decision to use financial derivatives.

Bond Insurance and Liquidity Provision: Impacts in the Municipal Variable Rate Debt Market, 2008-09

This article explores the effects of credit enhancement, and downgrades to credit enhancement providers, on the costs to municipal issuers for holding variable rate debt during the 2008—09 market crisis. Although municipal issuers were potentially subject to pressure on their debt issues due to credit contraction, the extent of the problem has not been well researched, especially regarding credit enhancement. This study empirically investigates whether liquidity providers affect the cost of municipal variable rate debt and whether the impact is affected by credit downgrades of liquidity providers. Several important contributions are made. First, this research emphasizes the role of liquidity provision as a form of credit enhancement. Second, the value of liquidity provision is examined in the environment of credit downgrades to liquidity providers. Third, the research tests capital market efficiency using variable, as opposed to fixed rate debt, which allows for the identification of liquidity risk and default risk.

Kuchma as Economic Reformer

Kuchma’s economic successes occurred whenever he was able and willing to support bright young reformers in their efforts to solve Ukraine’s most pressing problems.

Public administration and the rule of law

This article deals with the enduring problem of administrative discretion in the modern American democratic-constitutional state. In the American constitutional tradition, administrative action is legitimate when and only if it adheres to the rule of law. This implies that administrators must be able to link directly their actions to grants of authority in statutes or the Constitution. But the growth of the state apparatus and the increasing intensification of the public administrations role in society have necessitated rather broad legislative grants of discretion to the bureaucracy. The result has been a seemingly perennial tension between the rule of law ideal and the modern administrative reality. Attempts to control discretion via evolving doctrines of administrative law have proved unsatisfactory for a variety of reasons explored in this essay. The most important shortfall has been that the continuing expansion of the administrative state threatens directly the rule of law itself. After a survey of...

Reforming the Fiscal Constitution: Holding Politicians Accountable Through Greater Transparency

In this chapter, we argue that in order to restore relevance to the executive phase of the budget process, it needs to provide better information to citizens regarding the options available for closing the gap between revenues and expenditures. We outline a proposal whereby the executive would have to make clear his/her priorities by designating spending as either revenue or deficit financed, and submitting a 5-year balanced budget plan within his/her budget recommendation. The legislative body (or bodies) would then be required to enunciate how their preferences differ from those of the executive in their respective budget resolutions. We contend that such a process would be more transparent, better enabling citizens to hold politicians accountable.

The Challenge of Fiscal Reform

The Organization and development of the public finance function is at thc hcart of managing tbc transitkm to market.1 This mcans building governmental capacity in the cntical areas of fiscal management, especiallyi budget formulation and Implementation, casb management and expenditure conirol, and debi management. Since tbe collapse of communism, throughout the countries of the former Soviet Union, new financial management institutions have been under development to: perform fiscal policy analysis, providc affective tax collcction and expenditure control capabilities, prioritize expenditures, redesign the State aecounting System, separate the administratlon of monetary and fiscal managerneni funcuons, and accelerate development of the public debt market. Due to their as-yet nascent domestic debt markets, it has been necessary for many former Soviet repubucs—Uke Ukraine—to securc accessto bilateral and multilateral lending, particularly irom thc World Bank and International Monetary Fund (IMF).

Economic Crisis, Change, and Reform in the Ukrainian Context

In the wake of the collapse of the USSR, Ukraine’s Strategie signUicance has becorne of parueular interest to policy rnakers and scholars in western coantries. Tbis “newly discovered” natlon of some 50 million souls 1s sigmficant, not only due to its large population but also due to its land mass fit is the iargest nation entireiy within Continental Europe— sligbtly larger than France), its geographic position, and its enormous economic potential. If tbesc rcasons were not enougb, Ukraine is crucial to the West precisely because it was the “prized possession” of the former Soviet Union. In fact, as former U.S. National Security Advisor Zbigniew Brzezinski has put matters, Siit cannot be stressed strongiy enougb tbat without Ukraine, Russia ceases to be an empire, but with Ukraine suborned and then subordinated, Russia automatically be- comes an empire.1 The maintenance of Ukraine’s independence is crucial to the stabiiity of the whole of Europe and to the poliucai maturation of Russia as well.2