IDEAS home Printed from https://ideas.repec.org/a/oec/govkaa/5km7s5m3nlvd.html

The Impact of the Crisis on Budget Policy in Central and Eastern Europe

Author

Listed:
  • Zsolt Darvas

Abstract

This paper describes the particular impacts of the financial and economic crisis on Central and Eastern European (CEE) countries; studies pro-cyclicality of fiscal policies; discusses the impact of the crisis on fiscal policy; and takes a look at the policy response of various governments. After drawing some lessons for fiscal policy from previous emerging market crises, the paper concludes with some thoughts on the appropriate policy response from a more normative perspective. The key message of the paper is that the crisis should be used as an opportunity to introduce reforms to avoid future pro-cyclical fiscal policies, to increase the quality of budgeting and to increase credibility. These reforms should include fiscal responsibility laws comprising medium-term fiscal frameworks, fiscal rules and independent fiscal councils. When fiscal consolidation is accompanied by fiscal reforms that increase credibility, non-Keynesian effects may offset the contraction caused by the consolidation to some extent. JEL classification: C32, E62, H60 Keywords: Crisis, budget policy, fiscal policy, Central and Eastern Europe, CEE, CESEE

Suggested Citation

  • Zsolt Darvas, 2010. "The Impact of the Crisis on Budget Policy in Central and Eastern Europe," OECD Journal on Budgeting, OECD Publishing, vol. 10(1), pages 1-42.
    • Handle: RePEc:oec:govkaa:5km7s5m3nlvd
    DOI: 10.1787/budget-10-5km7s5m3nlvd
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zsolt Darvas, 2011. "The fiscal and monetary institutions of CESEE countries," Bruegel Working Papers 494, Bruegel.
    2. Zsolt Darvas & Valentina Kostyleva, 2011. "Fiscal and Monetary Institutions in Central, Eastern and South-Eastern European Countries," OECD Journal on Budgeting, OECD Publishing, vol. 11(1), pages 147-185.
    3. Elizabeth Brainerd, 2010. "Human Development in Eastern Europe and the CIS Since 1990," Human Development Research Papers (2009 to present) HDRP-2010-16, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    4. Ursula Hermelink & Claudia Trentini, 2009. "Gender-sensitive Economic Policies in the UNECE Region in the Context of the Economic and Financial Crisis," ECE Discussion Papers Series 2009_3, UNECE.
    5. Skauronė, Laima & Miceikienė, Astrida & Krikštolaitis, Ričardas, 2020. "The Impact of Fiscal Policy Measures on the Financial Autonomy of Rural Municipalities: Case of Lithuania," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2020), Virtual Conference, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Virtual Conference, 10-12 September 2020, pages 157-172, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    6. Balázs Égert, 2014. "Fiscal policy reaction to the cycle in the OECD: pro- or counter-cyclical?," Mondes en développement, De Boeck Université, vol. 0(3), pages 35-52.
    7. Bálint Ván & Gábor Lovics & Csaba G. Tóth & Katalin Szőke, 2025. "Digitalization against tax evasion: evidence on the role of company size," Journal of Business Economics, Springer, vol. 95(5), pages 749-776, July.
    8. Nadezda Stanova, 2012. "Democratic learning and fiscal rules in the political budget cycles of the CEE countries," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 5(2), pages 168-182.
    9. Karsten Staehr, 2010. "The global financial crisis and public finances in the New EU Countries from Central and Eastern Europe," Bank of Estonia Working Papers wp2010-02, Bank of Estonia, revised 04 Feb 2010.
    10. Zsombor Z. Méder & András Simonovits & János Vinczeb, 2012. "Tax Morale and Tax Evasion: Social Preferences and Bounded Rationality," Economic Analysis and Policy, Elsevier, vol. 42(2), pages 171-188, September.
    11. Baldi, Guido & Staehr, Karsten, 2016. "The European debt crisis and fiscal reactions in Europe 2000-2014," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 13(2), pages 297-317.
    12. Zsolt Darvas, 2011. "Exchange Rate Policy and Economic Growth after the Financial Crisis in Central and Eastern Europe," Working Papers 1103, Department of Mathematical Economics and Economic Analysis, Corvinus University of Budapest.
    13. Guido Baldi & Karsten Staehr, 2013. "The European Debt Crisis and Fiscal Reaction Functions in Europe 2000-2012," Discussion Papers of DIW Berlin 1295, DIW Berlin, German Institute for Economic Research.
    14. Palotai, Dániel & Baksay, Gergely, 2017. "Válságkezelés és gazdasági reformok Magyarországon, 2010-2016 [Recession management and economic reforms in Hungary, 2010-2016]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 698-722.
    15. António Afonso & Catarina Farinha Miranda, 2025. "Compliance With Fiscal Sustainability And The Euro," Working Papers REM 2025/0371, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    16. Lucian Belașcu & Camelia Budac, 2016. "Considerations on the Impact of the Global Financial Crisis on Economies from Eastern Europe," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 415-420, February.
    17. Zsolt Darvas, 2013. "The euro area's tightrope walk: debt and competitiveness in Italy and Spain," CERS-IE WORKING PAPERS 1337, Institute of Economics, Centre for Economic and Regional Studies.
    18. Caroline Klein & Robert Price & Andreas Wörgötter, 2013. "Improving the Fiscal Framework to Enhance Growth in an Era of Fiscal Consolidation in Slovakia," OECD Economics Department Working Papers 1018, OECD Publishing.
    19. Andras Simonovits, 2009. "Underreported earnings and age-specific income redistribution in post-socialist economies," CERS-IE WORKING PAPERS 0927, Institute of Economics, Centre for Economic and Regional Studies.
    20. Stanova, Nadja, 2015. "Fiscal discretion, growth and output volatility in new EU member countries," MPRA Paper 63946, University Library of Munich, Germany.
    21. Kovács, Árpád & Halmosi, Péter, 2012. "Similarities and differences in european crisis management," Public Finance Quarterly, Corvinus University of Budapest, vol. 57(1), pages 9-27.
    22. Postuła Marta & Klepacki Jarosław & Alińska Agnieszka, 2018. "The Impact of Standardised fiscal rules index on the Yield on Ten-Year Government Bonds in the Visegrád Group Countries in 2005–2016," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 26(3), pages 49-70, September.
    23. Andric, Vladimir & Arsic, Milojko & Mladenovic, Zorica, 2016. "The Dynamics of Public Debt in Serbia - A Nonlinear Analysis," EconStor Preprints 144713, ZBW - Leibniz Information Centre for Economics.
    24. Goran Radosavljeviæ & Mihajlo Babin & Miloš Eriæ & Jelisaveta Lazareviæ, 2020. "Income convergence between Southeast Europe and the European Union," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 38(2), pages 499-519.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:govkaa:5km7s5m3nlvd. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/oecddfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.