Budgetary Subsidies in Centrally Planned Economies in Transition

32 Pages Posted: 15 Feb 2006

See all articles by Robert Holzmann

Robert Holzmann

University of Malaya; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); World Bank

Date Written: January 1991

Abstract

This paper analyzes budgetary subsidy policy issues that arise when centrally planned economies move toward a market economy. The analysis suggests that subsidy reduction, to be successful, has to be embedded into an overall economic reform program and that during the program`s execution, former implicit subsidies are likely to become budgetized. Furthermore, additional pressure on the budget, caused by enterprise restructuring or the introduction of social safety net provisions, necessitates careful policy design. Comprehensive budgetary reform is required to prevent budgetary slippages during the transition process.

JEL Classification: 052, 124, 320

Suggested Citation

Holzmann, Robert, Budgetary Subsidies in Centrally Planned Economies in Transition (January 1991). IMF Working Paper No. 91/11, Available at SSRN: https://ssrn.com/abstract=884578

Robert Holzmann (Contact Author)

University of Malaya ( email )

University of Malaya
Kuala Lumpur, Wilayah Persekutuan 50603
Malaysia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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