<h2>29 June 2015</h2><p>The International Monetary Fund (IMF) has released a working paper entitled, “Too Much of a Good Thing? Prudent Management of Inflows under Economic Citizenship Programs”. The paper explores the advantages and the pitfalls of the recent proliferation of Economic Citizenship Programs (ECPs).</p><p>An increasing number of countries are offering opportunities to obtain citizenship or residency in exchange for a substantial financial contribution to the domestic economy. ECPs (also referred to as citizenship-by-investment programs) are particularly attractive to small states, for which inflows can be large enough to have a significant economic and fiscal impact, while an increasing number of advanced economies are also offering ECPs.</p><p>These programs are increasingly becoming mainstream, as high net-worth individuals consider citizenship or residence as a means to improving international mobility, tax planning, and family security while also seeking investment opportunities. Furthermore, a growing number of intermediaries have recognized the business opportunities as more countries launch new programs that cater to such needs.</p><p>The paper discusses recent developments and implications of such programs for fiscal discipline and the real economy, including risks to macroeconomic and financial stability, with a focus on small state economies. It discusses the prudent management of these programs, overviews strategies to minimize risks to various sectors, and addresses potential governance and integrity challenges.</p><p>The paper proposes a framework for managing inflows and savings from ECPs to contain macroeconomic risks, and it recommends the establishment of a sovereign wealth fund where such revenues are large and persistent.</p><p>It is available for download on the IMF website&nbsp;<a target="_blank" href="http://www.imf.org/external/pubs/ft/wp/2015/wp1593.pdf">here</a>.</p>