Lessons in Fiscal Consolidation for the Successor States of the Soviet Union

26 Pages Posted: 15 Feb 2006

See all articles by George Kopits

George Kopits

International Monetary Fund (IMF)

Date Written: June 1993

Abstract

This paper reviews lessons in fiscal consolidation for the former Soviet Union that emerge from the experience of Central and Eastern European economies in transition. A central lesson is the need to support the macroeconomic stabilization with a front-loaded fiscal adjustment. Consistent with this adjustment path, structural reform in the tax and expenditure areas should be aimed at allocative efficiency and fairness, and its sequencing be predicated largely on administrative constraints. In the face of the uncertainty of fiscal projections, formulation of contingency measures is necessary. In addition, elimination of submerged fiscal imbalances, stemming from quasi-fiscal activities of state-owned nonfinancial enterprises and financial institutions, is just as important as correcting the measured budget deficit.

JEL Classification: E62, H2, H5, P35

Suggested Citation

Kopits, George, Lessons in Fiscal Consolidation for the Successor States of the Soviet Union (June 1993). IMF Working Paper No. 93/54, Available at SSRN: https://ssrn.com/abstract=883522

George Kopits (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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