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Public Finances and Economic Transition


  • Luca Barbone
  • Hana Polackova


This paper analyzes developments in general government expenditures and revenues for 26 reforming ex-socialist economies (RESEs) over the period 1989-1994. The data indicate that, rather than uniformly converging to a “Western European” norm, RESEs have followed a variety of patterns, depending on how successful they have been in economic reform in general and in tackling the increase in the demand for social protection in particular. The paper conducts an empirical investigation of spending patterns and the sustainability of revenues required to maintain current government spending, and concludes that there are strong indications that the fiscal accounts will remain under pressure in a number of RESEs in the foreseeable future.

Suggested Citation

  • Luca Barbone & Hana Polackova, 1996. "Public Finances and Economic Transition," CASE Network Studies and Analyses 0068, CASE-Center for Social and Economic Research.
  • Handle: RePEc:sec:cnstan:0068

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    References listed on IDEAS

    1. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922, March.
    2. Alan T. Peacock & Jack Wiseman, 1961. "The Growth of Public Expenditure in the United Kingdom," NBER Books, National Bureau of Economic Research, Inc, number peac61-1, January.
    3. Krumm, Kathie & Milanovic, Branko & Walton, Michael, 1994. "Transfers and the transition from socialism : key tradeoffs," Policy Research Working Paper Series 1380, The World Bank.
    4. Peltzman, Sam, 1980. "The Growth of Government," Journal of Law and Economics, University of Chicago Press, vol. 23(2), pages 209-287, October.
    5. Luca Barbone & Domenico Marchetti, 1995. "Transition and the fiscal crisis in Central Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(1), pages 59-74, March.
    6. Gérard Bélanger, 1994. "Eastern Europe; Factors Underlying the Weakening Performance of Tax Revenues," IMF Working Papers 94/104, International Monetary Fund.
    7. Vito Tanzi, 1993. "Fiscal Policy and the Economic Restructuring of Economies in Transition," IMF Working Papers 93/22, International Monetary Fund.
    8. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "From plan to market : patterns of transition," Policy Research Working Paper Series 1564, The World Bank.
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    Cited by:

    1. Jorge Martinez-Vazquez & Robert McNab, 1997. "Tax Reform in Transition Economies: Experiences and Lessons," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9706, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Marek Dabrowski & Magdalena Tomczynska, 2001. "Tax Reforms in Transition Economies – a Mixed Record and Complex Future Agenda," CASE Network Studies and Analyses 0231, CASE-Center for Social and Economic Research.
    3. Brück, Tilman & Danzer, Alexander M. & Muravyev, Alexander & Weisshaar, Natalia, 2010. "Poverty during transition: Household survey evidence from Ukraine," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 123-145, June.
    4. Barseghyan, Levon & Guerdjikova, Ani, 2011. "Institutions and growth in limited access societies," Journal of Economic Theory, Elsevier, vol. 146(2), pages 528-568, March.
    5. Joanna Siwinska-Gorzelak, 2000. "Currency Crises and Fiscal Imbalances. The Transition Countries Perspective," CASE Network Studies and Analyses 0219, CASE-Center for Social and Economic Research.
    6. World Bank, 2003. "Armenia : Public Expenditure Review," World Bank Other Operational Studies 13926, The World Bank.
    7. Tilman Brück & Alexander M. Danzer & Alexander Muravyev & Natalia Weißhaar, 2007. "Determinants of Poverty during Transition: Household Survey Evidence from Ukraine," ESCIRRU Working Papers 2, DIW Berlin, German Institute for Economic Research.
    8. World Bank, 2003. "Public Expenditure Review for Armenia," World Bank Publications, The World Bank, number 15086.
    9. Jorge Martinez-Vazquez & Robert McNab, 2000. "Tax Reform in The Tax Reform Experiment in Transitional Countries," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0001, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    10. Fakin, Barbara & de Crombrugghe, Alain, 1997. "Field adjustments in transition economies : social transfers and the efficiency of public spending - a comparison with OECD countries," Policy Research Working Paper Series 1803, The World Bank.


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