Does Politics Matter in the Conduct of Fiscal Policy? Political Determinants of the Fiscal Sustainability: Evidence from Seven Individual Central and Eastern European Countries (CEEC)
AbstractThis paper aims at assessing the fiscal sustainability and its political determinants in seven Central and Eastern European Countries (CEEC), namely Estonia, Latvia, Lithuania, Poland, Slovenia, Slovakia and the Czech Republic. First, using the recent sustainability approach of Bohn (1998) based on fiscal reaction function, econometric findings using Ordinary Least Squares (OLS) reveal a positive response of the primary surplus to changes in debt in several countries. In other words, fiscal policy is sustainable in Baltic countries, Slovenia and Slovakia, but not in Poland and in the Czech Republic. Second, by introducing political dummy variables, we test the electoral budget cycle and the partisan cycle theories. We find the presence of electoral and partisan cycle in Poland but not in the rest of our countries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.
Volume (Year): 54 (2007)
Issue (Month): 4 (December)
Contact details of provider:
Web page: http://www.panoeconomicus.rs/
Fiscal reaction function; Public debt sustainability; Political budget cycles; Time series;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Mirdala, Rajmund, 2009.
"Effects of Fiscal Policy Shocks in the European Transition Economies,"
19481, University Library of Munich, Germany.
- Rajmund MIRDALA, 2009. "Effects Of Fiscal Policy Shocks In The European Transition Economies," Journal of Applied Research in Finance Bi-Annually, ASERS Publishing, vol. 0(2), pages 141-157, December.
- J. Stephen Ferris, 2010. "Fiscal Policy from a Public Choice Perspective," Carleton Economic Papers 10-10, Carleton University, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ivana Horvat) The email address of this maintainer does not seem to be valid anymore. Please ask Ivana Horvat to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.