Efficiency Cost of Fiscal Equalization: The Case of Belarus
Belarus is the last command economy left standing in Europe. Because it still has an option of a gradual transition ("Chinese style'"), the study of Belarus’ case can present insights on the counterfactual to the "shock therapy" approach undertaken by the rest of the Central and Eastern European countries. However, the viability of the existing system hinges on its ability to weather short-term external economic shocks and to adjust to a significant list of medium term structural challenges. Now that more than half of Belarus’ consolidated public expenditures, excluding social security, takes place at the subnational levels of government, its ability to adjust largely hinges on the incentives that the system of intergovernmental relations presents to subnational officials. Belarus' experience with the recent recurrent macro-economic turmoil suggests that the incentives embedded in the system of intergovernmental fiscal transfers might hinder its ability to undergo fiscal adjustment and consolidation. Thus, since 2008, Belarus underwent one of the largest contractions in the size of government in the region, with public expenditures contracting by 12.9 percentage points of GDP and finally dropping to 37 percent of GDP at the end of 2011 (Figure 1).
|Date of creation:||02 Jan 2014|
|Contact details of provider:|| Phone: 404-413-0235|
Web page: http://aysps.gsu.edu/isp/index.html
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- World Bank, 2013. "Belarus Public Expenditure Review : Enhancing Public Services in Times of Austerity," World Bank Other Operational Studies 13209, The World Bank.
- Timofeev Andrey, 2002. "Fiscal Decentralization and Soft Budget Constraints," EERC Working Paper Series 01-12e, EERC Research Network, Russia and CIS.
When requesting a correction, please mention this item's handle: RePEc:ays:ispwps:paper1401. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Benson)
If references are entirely missing, you can add them using this form.