Many governments have faced serious fiscal instability as a result of their contingent liabilities—that is, fiscal obligations contingent on the occurrence of particular events. But these obligations are not budgeted and accounted for, nor are they considered in conventional fiscal analysis. Governments today are exposed to greater fiscal risks and uncertainties than ever before. There are four reasons for this: the growing volume and volatility of private capital flows, the transformation of the State’s role from financier to guarantor of services and projects, the moral hazard that may result from guaranteeing outcomes to be delivered by the private sector, and the fiscal opportunism of policymakers.