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Public finances and economic transition

  • Barbone, Luca
  • Polackova, Hana

The authors analyze developments in general government spending and revenues for 26 former social economies for 1989-94. The data show that, rather than uniformly converting to a"Western European"norm, these reforming economies have followed a variety of patterns. Whether a country drifts toward heavy government spending seems to depend on its success at general economic reform and especially at dealing with the pressures for social protection. The authors empirically investigate spending patterns and the sustainability of revenues required to cover current government spending. They conclude that fiscal accounts will surely remain under pressure in most transition economies in the foreseeable future. They suggest involving the private sector in rationalizing and providing social services.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1585.

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Date of creation: 31 Mar 1996
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Handle: RePEc:wbk:wbrwps:1585
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  1. 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, 03.
  2. Krumm, Kathie & Milanovic, Branko & Walton, Michael, 1994. "Transfers and the transition from socialism : key tradeoffs," Policy Research Working Paper Series 1380, The World Bank.
  3. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "From plan to market : patterns of transition," Policy Research Working Paper Series 1564, The World Bank.
  4. Sam Peltzman, 1980. "The Growth of Government," University of Chicago - George G. Stigler Center for Study of Economy and State 1, Chicago - Center for Study of Economy and State.
  5. Vito Tanzi, 1993. "Fiscal Policy and the Economic Restructuring of Economies in Transition," IMF Working Papers 93/22, International Monetary Fund.
  6. 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, June.
  7. Gérard Bélanger, 1994. "Eastern Europe; Factors Underlying the Weakening Performance of Tax Revenues," IMF Working Papers 94/104, International Monetary Fund.
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