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Budgetary Subsidies in Centrally Planned Economies in Transition

  • Robert Holzmann

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.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 91/11.

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Length: 32
Date of creation: 01 Jan 1991
Date of revision:
Handle: RePEc:imf:imfwpa:91/11
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