Fiscal Policy and Structural Reforms in Transition Economies an Empirical Analysis
Bank of Finland; CESifo (Center for Economic Studies and Ifo Institute)
Economics of Transition, Vol. 9, No. 1, March 2001
This paper provides an empirical examination of the relationship between fiscal balance and structural reforms using panel data from 25 transition economies. The results indicate that privatization and restructuring, via unemployment, affect the fiscal balance negatively. This finding provides support for ideas in theoretical transition economics that maintain that fiscal pressures are most severe in fast-reforming countries. In contrast, price liberalization has a robust positive impact on fiscal performance. In addition, the results differ somewhat over different countries and transition time.
Keywords: fiscal policy, structural reforms, transition economies
JEL Classification: E62, P20Accepted Paper Series
Date posted: April 26, 2001
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