The Great Crisis and Fiscal Institutions in Eastern and Central Europe and Central Asia

26 Pages Posted: 15 Jan 2012

See all articles by Luca Barbone

Luca Barbone

CASE - Center for Economic and Social Research; Institute for the Study of International Migration

Roumeen Islam

World Bank

Luis A. Sanchez-Baracaldo

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: March 25, 2010

Abstract

This paper presents an overview of the fiscal reforms enacted by the countries of Eastern and Central Europe and Central Asia (ECA) during the last two decades, with a focus on Poland, Russia and Turkey. In particular, most of the ECA countries adopted binding budgetary rules in order to reduce institutional fragmentation, enhance transparency and promote fiscally responsible behaviour. During the 1990s these countries were determined to accelerate the transition from the central-planning system. In a favourable external environment, they strengthened their fiscal institutions and improved their fiscal outcomes. This positive trend reversed when the global financial crisis struck and some reforms proved too inflexible for a period of economic downturn. In the short term, the ECA countries reacted with measures to contain the deficit, boost aggregate demand or protect certain segments of the population. Later, once the crisis revealed the risks that volatile environments pose for long-term stability, the need for further institutional, social and fiscal reforms became paramount.

Suggested Citation

Barbone, Luca and Islam, Roumeen and Sanchez-Baracaldo, Luis A., The Great Crisis and Fiscal Institutions in Eastern and Central Europe and Central Asia (March 25, 2010). Bank of Italy Occasional Paper, Available at SSRN: https://ssrn.com/abstract=1985205 or http://dx.doi.org/10.2139/ssrn.1985205

Luca Barbone (Contact Author)

CASE - Center for Economic and Social Research ( email )

Al. Jana Pawła II 61/212
Warsaw, 01-031
Poland

Institute for the Study of International Migration ( email )

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Roumeen Islam

World Bank ( email )

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Washington, DC 20433
United States
202-473-2628 (Phone)
202-676-9810 (Fax)

Luis A. Sanchez-Baracaldo

affiliation not provided to SSRN ( email )

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