BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
Fiscal Policy and Structural Reforms in Transition Economies: An Empirical Analysis
Abstract: This paper makes an empirical examination of the
relationship between fiscal balance and structural reforms using panel data
from 25 transition economies. The results indicate that price
liberalisation has a positive impact on fiscal performance, while
privatisation and restructuring, via unemployment, affect the fiscal
balance negatively. These findings are somewhat in contrast with earlier
empirical work and theoretical transition economics that maintain fiscal
pressures are most severe in fast-reforming countries. The analysis further
suggests that countries with better fiscal positions may have benefited
from favourable initial conditions.
Keywords: fiscal policy; structural reforms; transition economies; (follow links to similar papers)
44 pages, May 25, 2000
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