Fiscal policy and structural reforms in transition economies - An empirical analysis

This paper provides an empirical examination of the relationship between fi scal balance and structural reforms using panel data from 25 transition eco nomies. The results indicate that privatization and restructuring, via unem ployment, affect the fiscal balance negatively. This finding provides suppo rt for ideas in theoretical transition economics that maintain that fiscal pressures are most severe in fast-reforming countries. In contrast, price l iberalization has a robust positive impact on fiscal performance. In additi on, the results differ somewhat over different countries and transition tim e.