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05-07-2022

Testing Effects of the Treasury single account system on the cost of borrowing in the OECD Countries

Authors: Saliha Çınar, Aygül Anavatan, Fatih Deyneli

Published in: Journal of Economics and Finance | Issue 4/2022

Abstract

The basic function of the Treasury is to equalize the revenues and expenditures of the public in terms of space and time. Cash management, which is included in these functions, regulates the short-term cash flow between various government institutions and non-governmental organizations. To carry out the cash management system effectively, the Treasury Single Account system, which enables all revenues to be collected in one place and all expenditures to be made from one place, is widely used by countries at present. In this study, the effects of the Treasury Single Account system on macroeconomic indicators are investigated in 33 OECD member countries. More specifically, we investigate the relationship between the Treasury Single Account system and the cost of borrowing in these countries. For this purpose, we used the OECD and the World Bank data covering the period 2000–2020. According to the study’s findings, the Treasury Single Account system reduces the Treasury’s borrowing requirement and borrowing cost.

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Also see The World Bank (2012); Williams (2010); Mu (2006); Erdener and Cangöz (2010); Hashim (2014); William (2004); Dener (2013); Can (2018).

Also see Pattanayak and Fainboim (2010).

Miller-Orr model; It is a stochastic model that tries to help businesses with uncertain cash inflows and outflows manage their cash balances.

It is based on 34 countries in the OECD’s Budgeting and Public Expenditure 2019 report for the TSA variable. Since Japan could not be included in the analysis due to the lack of data, 33 countries are used in the study. The countries that do not use the Treasury single fund and the countries that are included in the category ‘other’ (Germany, Iceland, the Netherlands, Portugal, and Finland, excluding Japan) are handled in the first group in the study. The countries belonging to the categories ‘Treasury single fund used for revenues and expenditures (no exceptions),’ ‘Treasury single fund used for revenues and expenditures except major public service funds,’ and ‘Treasury single fund used for revenues and expenditures with other exceptions’ are considered as the second group.

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Title: Testing Effects of the Treasury single account system on the cost of borrowing in the OECD Countries
Authors: Saliha Çınar
Aygül Anavatan
Fatih Deyneli
Publication date: 05-07-2022
Publisher: Springer US
Published in: Journal of Economics and Finance / Issue 4/2022
Print ISSN: 1055-0925
Electronic ISSN: 1938-9744
DOI: https://doi.org/10.1007/s12197-022-09584-w

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Testing Effects of the Treasury single account system on the cost of borrowing in the OECD Countries

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