## 3. Model: A Change in EU Accession Policy

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---

### Introduction
- Recent divergence in fiscal behavior among EU accession countries (ACs): large Central European ACs relaxed fiscal stance while Baltic economies converged within the Maastricht deficit reference value.
- Standard explanations (transition shock, evolution of fiscal institutions) do not fully account for Central Europe deterioration.
- Paper objective:
  - Explore determinants of cross-country differences in fiscal trends.
  - Test standard factors via regression analysis.
  - Develop a simple game-theoretic model capturing political-economy aspects of the accession process that can generate different fiscal policy regimes.
- Implication: potential relevance for post-accession Europe and the Stability and Growth Pact (SGP).

### Fiscal performance and potential determinants
- Stylized observation (1997–2002):
  - Baltics: returned to close-to-balanced positions after 1998 Russian crisis.
  - Large Central Europe (Czech Republic, Hungary, Poland): rapid fiscal loosening, reaching high fiscal imbalance.
- By 2002 (adjusted for one-off transition-related items):
  - Estonia: overall balance about 1/4 percent of GDP (surplus).
  - Hungary and Poland: overall deficit of 6 1/2 percent of GDP.
  - Primary deficits reached almost one half of these overall deficit levels (Table 1 context).
- Main proximate drivers identified:
  - Increase in primary expenditures in Central Europe, particularly government wages and transfer payments.
  - Economic cycle: fiscal balances reflect output gaps; e.g., Poland’s fiscal deterioration in 2001–02 had some cyclical component; Hungary had no discernible output gap.
  - Political cycle: deficits tend to increase in election years and revert afterward.
  - Fiscal institutions and transparency:
    - Baltic countries (except Lithuania) more centralized; Estonia stands out with high transparency.
    - No clear time variation in institutional quality since mid-1990s to explain recent fiscal swings.
  - Exchange rate arrangement:
    - Hard pegs (including currency boards) do not ensure fiscal discipline; fixed parity can be undermined by sustained fiscal imbalance.

- Key statistics from Table 1 (2002, adjusted fiscal balance, percent of GDP; GDP in billion US dollars; population in million; fiscal indices):
  - Poland: Overall -6.3; Primary -2.9; GDP 179.9; Population 38.7; Centralization 7.78; Transparency 5
  - Czech Republic: Overall -4.2; Primary -3.2; GDP 56.7; Population 10.3; Centralization 7.19; Transparency 8
  - Hungary: Overall -6.3; Primary -2.4; GDP 52.3; Population 10.0; Centralization 5.32; Transparency 8
  - Slovakia: Overall -4.9; Primary -2.2; GDP 19.9; Population 5.4; Centralization 6.62; Transparency 8
  - Slovenia: Overall -2.7; Primary -1.0; GDP 19.0; Population 2.0; Centralization 7.69; Transparency 8
  - Lithuania: Overall -1.2; Primary 0.1; GDP 12.1; Population 3.5; Centralization 6.19; Transparency 7
  - Latvia: Overall -2.7; Primary -1.7; GDP 7.4; Population 2.3; Centralization 8.00; Transparency 5
  - Estonia: Overall 0.2; Primary 0.5; GDP 5.7; Population 1.4; Centralization 8.32; Transparency 13

- Notes on adjustments:
  - Total expenditure and net lending and overall deficit modified to exclude one-off transition-related expenditures assumed not to burden the budget in the future; adjustments sizable for Hungary and the Czech Republic (officially reported deficits reached 9.5 and 7.1 percent of GDP, respectively).

### Empirical results
- Dataset and method:
  - Pooled annual observations for eight ACs, 1997–2002.
  - Fiscal balance measures adjusted for transition-related outlays/receipts.
  - Random effects estimator allowing for individual country and time effects.
- Regression findings (coefficients in percent of GDP unless noted; standard errors in parentheses; significance indicated where provided):
  - Interest expenditure coefficient on overall balance:
    - Specification (1): -0.721** (0.244)
    - Specification (2): -0.685** (0.173)
  - Interest expenditure on primary balance:
    - Specification (3): 0.191 (0.271)
    - Specification (4): 0.291 (0.197)
  - GDP growth rate:
    - (1): 0.333** (0.066)
    - (2): 0.343** (0.053)
    - (3): 0.314** (0.071)
    - (4): 0.328** (0.059)
  - Election (dummy):
    - (1): -0.368 (0.342)
    - (2): -0.357 (0.317)
    - (3): -0.558 (0.366)
    - (4): -0.567* (0.344)
  - NATO * trend (dummy):
    - (1): -0.325** (0.102)
    - (2): -0.277** (0.081)
    - (3): -0.412** (0.113)
    - (4): -0.349** (0.090)
  - Fiscal centralization and fiscal transparency indices: positive but not significant.
  - Population:
    - 0.035 (0.056) in one specification; 0.047 (0.068) in another (not significant).
- Model fit and observations:
  - Adjusted R2: 0.73 and 0.71 for overall balance specifications; 0.55 and 0.54 for primary balance specifications.
  - Number of observations: 48 in each specification.
- Interpretation highlights:
  - Economic upswing (higher GDP growth) improves fiscal balance; elections worsen it temporarily.
  - Change in interest costs is less than fully reflected in overall balance: roughly one-third of savings from lower interest costs used to relax primary position, two thirds improve overall balance.
  - Standard country characteristics (size, population) not significant.
  - Significant negative time trend post-NATO accession for large Central European countries: annual deterioration of fiscal balance about one-third of a percentage point of GDP (roughly equivalent to effect of a one percentage point drop in real GDP growth).

### External anchor: Fiscal strategies in the EU accession
- EU accession process imposes rule-based restrictions on deficit and public debt; ACs expected to demonstrate capacity and willingness to comply.
- Observed behavior:
  - Baltics better positioned for early euro adoption (converged to reference values).
  - Central European countries face sizable fiscal adjustment to avoid excessive deficits.
- Decisionmaker trade-off stylized:
  - Immediate political payoff from fiscal expansion versus potential reward/penalty associated with (non-)convergence to fiscal reference values.
  - Choice depends on AC’s perceived bargaining power, probability of sanctions for nonconvergence, political gain from accession, and EU policy stance.
- Information asymmetry dynamics:
  - EU institutions emphasized structural reforms with upfront fiscal costs over strict nominal convergence.
  - This may have signaled low priority for strict fiscal convergence in accession phase, creating incentives for some governments to pursue fiscal expansion (sometimes via creative accounting), especially where euro participation—not EU membership—was the binding constraint.
- Empirical corroboration:
  - Large ACs that joined NATO in 1999 showed progressive worsening of fiscal position during 2001–03, consistent with increased perceived bargaining strength.

### Game-theoretic approach
A. Analytical framework
- Binary fiscal choice for country i: Loose (L) or Tight (T) fiscal policy Fi.
- Utility structure:
  - Decision maker’s expected utility: EUi = ui(Fi) - pi(Si) where:
    - ui(Fi) is utility from fiscal stance (assume uL > uT).
    - Si is the utility loss associated with not joining EU/euro area (interpretable as penalty).
    - pi is probability of being excluded (function of choices across countries, bargaining power bi, and EU position).
- Probability structure (equation (3)):
  - If Fi = T then pi = 0.
  - If Fi = L then pi = p (if other countries also choose L) or pi = p (if other countries choose T) with 0 < p < p < 1 and bi reduces the probability of sanction.
  - Common EU enforcement parameters p and p capture intensity of EU enforcement and depend on collective behavior.
- Role of bargaining power bi: larger bi reduces probability of exclusion for a given stance.

B. Policy decisions and regimes
- Indifference condition between L and T defines critical Si thresholds (equation (5)):
  - Si* and Si** separate regimes where L dominates, T dominates, or choice depends on others (coordination game).
- Three regimes:
  1. Regime 1 (Si < Si*): “Loose” fiscal policy always pays (L is dominant).
  2. Regime 2 (Si > Si**): “Tight” fiscal policy dominates (T is dominant).
  3. Regime 3 (Si* < Si < Si**): Fiscal policy is a coordination game; best response depends on expectations about other ACs’ choices.
- Two-country symmetric reduction yields payoff matrix with two Nash equilibria: (L, L) and (T, T). (L, L) can be Pareto-superior and more likely if repeated play or equilibrium refinements apply.

C. Implications and EU policy experiment
- Determinants of outcome:
  - Size of Si (subjective penalty for misbehavior).
  - Difference in utilities uL - uT (political gains from looseness).
  - Bargaining power bi (larger bi makes L more attractive).
  - EU enforcement probabilities p and p: lowering them increases attractiveness of L.
- Policy experiment (illustrated in Figure 3):
  - If EU reduces likelihood of penalizing loose fiscal stances (p and p fall), countries in Regime 3 move from conditional L (dependent on others) to unconditional L; countries in Regime 2 might be tempted toward L if others do so.
- Conclusion from model: higher EU tolerance for fiscal misbehavior likely leads to looser fiscal stances across most ACs except the most prudent and politically weak.

### Conclusions and policy implications
- Empirical stylized facts (1997–2002): Baltics converged to Maastricht deficit reference value; large Central European countries diverged with progressive fiscal loosening.
- Regression evidence:
  - Economic cycle and election cycle significant.
  - Fiscal institutions marginally associated but not significant.
  - Interest savings partly used to relax primary positions.
- Significant post-NATO accession time trend: large Central European NATO members progressively relaxed fiscal stance starting in 1999 (annual deterioration ~ one-third percentage point of GDP).
- Game-theoretic model explanation:
  - Fiscal strategy can be a rational choice balancing immediate political gains and expected exclusion penalties.
  - Three possible regimes (L dominant, T dominant, coordination game) determined by subjective penalty Si, bargaining power bi, and EU enforcement stance.
  - Increased perceived bargaining power and a more tolerant EU stance can rationally lead to fiscal loosening and coordinated misbehavior (equilibrium (L, L)).
- Policy implications and outlook:
  - Two critical determinants for run-up to euro adoption: bargaining power of ACs and EU policy (enforcement) position.
  - Possible future trends:
    - Enhanced political clout of ACs could lead to more widespread fiscal relaxation.
    - Budgetary implications of EU accession could widen deficits by as much as 3 to 4 3/4 percent of GDP annually in the medium run unless major fiscal reforms are undertaken (Kopits and Székely (2004) estimate referenced in text).
    - EU could offset tendencies to relax fiscal stance by hardening monitoring for euro area entry and enforcing transparency standards, including full compliance with ESA 95.
  - Enforcement of sanctions under the SGP in large EU members is an important demonstration effect; laxity there could be interpreted by ACs as dilution of sanctions for failure to converge to the 3 percent of GDP deficit reference value.

*Source: IMF Working Paper section "3. Model: A Change in EU Accession Policy" (extracted from the provided PDF content).*

### 1. EU Accession Countries: Selected Economic and Institutional Indicators, 2002 .................7

### 1. EU Accession Countries: Selected Economic and Institutional Indicators, 2002

### Major themes and section structure
- Section title: "EU Accession Countries: Selected Economic and Institutional Indicators, 2002"
- Page reference in source: 7

### Content elements explicitly listed in the source
- Section likely presents selected economic and institutional indicators for EU accession countries for the year 2002 (title only provided in source).

### Figures and cross-references related to this unit
- Figure 1: "Central Europe and the Baltics: General Government Overall Deficit, 1997–2002" — Figure listed in source (page 5).

---

### 2. EU Accession Countries: Estimates of Fiscal Performance, 1997–2002

### Major themes and section structure
- Section title: "EU Accession Countries: Estimates of Fiscal Performance, 1997–2002"
- Page reference in source: 9

### Content elements explicitly listed in the source
- Section title indicates coverage of fiscal performance estimates for accession countries covering 1997–2002 (title only provided in source).

### Figures and cross-references related to this unit
- Figure 1 (see above) spans 1997–2002 and is relevant to fiscal performance comparisons.

---

### 3. Model: Accession as a Game

### Major themes and section structure
- Section title: "Model: Accession as a Game"
- Page reference in source: 16

### Content elements explicitly listed in the source
- Section title indicates a formal model treating accession as a game-theoretic problem (title only provided in source).

### Figures and cross-references related to this unit
- Figure 2: "Model: The Critical S
i
 Value" — Figure listed in source (page 15), associated with the model section.

---

*Source: _wp0462 - 1. EU Accession Countries: Selected Economic and Institutional Indicators, 2002 (PDF chapter/section) — canonical URL provided in the source metadata.*

### 3. Model: A Change in EU Accession Policy..........................................................................18

### 3. Model: A Change in EU Accession Policy

### Introduction
- Recent divergence in fiscal behavior among EU accession countries (ACs): large Central European ACs relaxed fiscal stance while Baltic economies converged within the Maastricht deficit reference value.
- Standard explanations (transition shock, evolution of fiscal institutions) do not fully account for the deterioration in Central Europe.
- Paper objective: explore determinants of cross-country differences in fiscal trends, test standard factors via regression analysis, and develop a simple game-theoretic model capturing political-economy aspects of the accession process that can generate different fiscal policy regimes.
- Implication: potential relevance for post-accession Europe and the Stability and Growth Pact (SGP).

### Fiscal performance and potential determinants
- Stylized observation (1997–2002):
  - Baltics: returned to close-to-balanced positions after 1998 Russian crisis.
  - Large Central Europe (Czech Republic, Hungary, Poland): rapid fiscal loosening, reaching high fiscal imbalance.
- By 2002 (adjusted for one-off transition-related items):
  - Estonia: overall balance about ¼ percent of GDP (surplus).
  - Hungary and Poland: overall deficit of 6 ½ percent of GDP.
  - Primary deficits reached almost one half of these overall deficit levels (Table 1 context).
- Main proximate drivers identified:
  - Increase in primary expenditures in Central Europe, particularly government wages and transfer payments.
  - Economic cycle: fiscal balances reflect output gaps; e.g., Poland’s fiscal deterioration in 2001–02 had some cyclical component; Hungary had no discernible output gap.
  - Political cycle: deficits tend to increase in election years and revert afterward.
  - Fiscal institutions and transparency:
    - Baltic countries (except Lithuania) more centralized; Estonia stands out with high transparency.
    - No clear time variation in institutional quality since mid-1990s to explain recent fiscal swings.
  - Exchange rate arrangement:
    - Hard pegs (including currency boards) do not ensure fiscal discipline; fixed parity can be undermined by sustained fiscal imbalance.

Key statistics from Table 1 (2002, adjusted fiscal balance, percent of GDP; GDP in billion US dollars; population in million; fiscal indices):
- Poland: Overall -6.3; Primary -2.9; GDP 179.9; Population 38.7; Centralization 7.78; Transparency 5
- Czech Republic: Overall -4.2; Primary -3.2; GDP 56.7; Population 10.3; Centralization 7.19; Transparency 8
- Hungary: Overall -6.3; Primary -2.4; GDP 52.3; Population 10.0; Centralization 5.32; Transparency 8
- Slovakia: Overall -4.9; Primary -2.2; GDP 19.9; Population 5.4; Centralization 6.62; Transparency 8
- Slovenia: Overall -2.7; Primary -1.0; GDP 19.0; Population 2.0; Centralization 7.69; Transparency 8
- Lithuania: Overall -1.2; Primary 0.1; GDP 12.1; Population 3.5; Centralization 6.19; Transparency 7
- Latvia: Overall -2.7; Primary -1.7; GDP 7.4; Population 2.3; Centralization 8.00; Transparency 5
- Estonia: Overall 0.2; Primary 0.5; GDP 5.7; Population 1.4; Centralization 8.32; Transparency 13

Notes on adjustments:
- Total expenditure and net lending and overall deficit modified to exclude one-off transition-related expenditures assumed not to burden the budget in the future; adjustments sizable for Hungary and the Czech Republic (officially reported deficits reached 9.5 and 7.1 percent of GDP, respectively).

### Empirical results
- Dataset: pooled annual observations for eight ACs, 1997–2002; fiscal balance measures adjusted for transition-related outlays/receipts.
- Estimation method: random effects estimator allowing for individual country and time effects.
- Regression findings (Table 2 highlights; coefficients are in percent of GDP unless noted):
  - Interest expenditure coefficient on overall balance: -0.721** (standard error 0.244) in specification (1); -0.685** (0.173) in (2). On primary balance: 0.191 (0.271) in (3); 0.291 (0.197) in (4).
  - GDP growth rate: 0.333** (0.066) in (1); 0.343** (0.053) in (2); 0.314** (0.071) in (3); 0.328** (0.059) in (4).
  - Election (dummy) coefficients: -0.368 (0.342) in (1); -0.357 (0.317) in (2); -0.558 (0.366) in (3); -0.567* (0.344) in (4).
  - NATO * trend (dummy): -0.325** (0.102) in (1); -0.277** (0.081) in (2); -0.412** (0.113) in (3); -0.349** (0.090) in (4).
  - Fiscal centralization and fiscal transparency indices: positive but not significant.
  - Population: 0.035 (0.056) in one specification; 0.047 (0.068) in another (not significant).
- Model fit and observations:
  - Adjusted R2: 0.73 and 0.71 for overall balance specifications; 0.55 and 0.54 for primary balance specifications.
  - Number of observations: 48 in each specification.
- Interpretation highlights:
  - Economic upswing (higher GDP growth) improves fiscal balance; elections worsen it temporarily.
  - Change in interest costs is less than fully reflected in overall balance: roughly one-third of savings from lower interest costs used to relax primary position, two thirds improve overall balance.
  - Standard country characteristics (size, population) not significant.
  - A significant negative time trend post-NATO accession for large Central European countries: annual deterioration of fiscal balance about one-third of a percentage point of GDP (roughly equivalent to effect of a one percentage point drop in real GDP growth).

### External anchor: Fiscal strategies in the EU accession
- EU accession process imposes rule-based restrictions on deficit and public debt; ACs expected to demonstrate capacity and willingness to comply.
- Observed behavior:
  - Baltics better positioned for early euro adoption (converged to reference values).
  - Central European countries face sizable fiscal adjustment to avoid excessive deficits.
- Decisionmaker trade-off stylized:
  - Immediate political payoff from fiscal expansion versus potential reward/penalty associated with (non-)convergence to fiscal reference values.
  - Choice depends on AC’s perceived bargaining power, probability of sanctions for nonconvergence, political gain from accession, and EU policy stance.
- Information asymmetry dynamics:
  - EU institutions emphasized structural reforms with upfront fiscal costs over strict nominal convergence.
  - This may have signaled low priority for strict fiscal convergence in accession phase, creating incentives for some governments to pursue fiscal expansion (sometimes via creative accounting), especially where euro participation—not EU membership—was the binding constraint.
- Empirical corroboration:
  - Large ACs that joined NATO in 1999 showed progressive worsening of fiscal position during 2001–03, consistent with increased perceived bargaining strength.

### Game-theoretic approach
A. Analytical framework
- Binary fiscal choice for country i: Loose (L) or Tight (T) fiscal policy Fi.
- Utility structure:
  - Decision maker’s expected utility: EUi = ui(Fi) - pi(Si) where:
    - ui(Fi) is utility from fiscal stance (assume uL > uT).
    - Si is the utility loss associated with not joining EU/euro area (interpretable as penalty).
    - pi is probability of being excluded (function of choices across countries, bargaining power bi, and EU position).
- Probability structure (equation (3)):
  - If Fi = T then pi = 0.
  - If Fi = L then pi = p (if other countries also choose L) or pi = p (if other countries choose T) with 0 < p < p < 1 and bi reduces the probability of sanction.
  - Common EU enforcement parameters p and p capture intensity of EU enforcement and depend on collective behavior.
- Role of bargaining power bi: larger bi reduces probability of exclusion for a given stance.

B. Policy decisions
- Indifference condition between L and T defines critical Si thresholds (equation (5)):
  - Si* and Si** separate regimes where L dominates, T dominates, or choice depends on others (coordination game).
- Three regimes:
  1. Regime 1 (Si < Si*): “Loose” fiscal policy always pays (L is dominant).
  2. Regime 2 (Si > Si**): “Tight” fiscal policy dominates (T is dominant).
  3. Regime 3 (Si* < Si < Si**): Fiscal policy is a coordination game; best response depends on expectations about other ACs’ choices.
- Two-country symmetric reduction yields payoff matrix with two Nash equilibria: (L, L) and (T, T). (L, L) can be Pareto-superior and more likely if repeated play or equilibrium refinements apply.

C. Implications and EU policy experiment
- Determinants of outcome:
  - Size of Si (subjective penalty for misbehavior).
  - Difference in utilities uL - uT (political gains from looseness).
  - Bargaining power bi (larger bi makes L more attractive).
  - EU enforcement probabilities p and p: lowering them increases attractiveness of L.
- Policy experiment (Figure 3 illustration):
  - If EU reduces likelihood of penalizing loose fiscal stances (p and p fall), countries in Regime 3 move from conditional L (dependent on others) to unconditional L; countries in Regime 2 might be tempted toward L if others do so.
- Conclusion from model: higher EU tolerance for fiscal misbehavior likely leads to looser fiscal stances across most ACs except the most prudent and politically weak.

### Conclusions
- Empirical stylized facts (1997–2002): Baltics converged to Maastricht deficit reference value; large Central European countries diverged with progressive fiscal loosening.
- Regression evidence: economic cycle and election cycle significant; fiscal institutions marginally associated but not significant; interest savings partly used to relax primary positions.
- Significant post-NATO accession time trend: large Central European NATO members progressively relaxed fiscal stance starting in 1999 (annual deterioration ~ one-third percentage point of GDP).
- Game-theoretic model explanation:
  - Fiscal strategy can be a rational choice balancing immediate political gains and expected exclusion penalties.
  - Three possible regimes (L dominant, T dominant, coordination game) determined by subjective penalty Si, bargaining power bi, and EU enforcement stance.
  - Increased perceived bargaining power and a more tolerant EU stance can rationally lead to fiscal loosening and coordinated misbehavior (equilibrium (L, L)).
- Policy implications and outlook:
  - Two critical determinants for run-up to euro adoption: bargaining power of ACs and EU policy (enforcement) position.
  - Possible future trends:
    - Enhanced political clout of ACs could lead to more widespread fiscal relaxation.
    - Budgetary implications of EU accession could widen deficits by as much as 3 to 4¾ percent of GDP annually in the medium run unless major fiscal reforms are undertaken (Kopits and Székely (2004) estimate referenced in text).
    - EU could offset tendencies to relax fiscal stance by hardening monitoring for euro area entry and enforcing transparency standards, including full compliance with ESA 95.
  - Enforcement of sanctions under the SGP in large EU members is an important demonstration effect; laxity there could be interpreted by ACs as dilution of sanctions for failure to converge to the 3 percent of GDP deficit reference value.

*Source: IMF Working Paper section "3. Model: A Change in EU Accession Policy" (extracted from the provided PDF content).*

### REFERENCES

### REFERENCES

### Cited works

- Allan, William, and Taryn Parry, 2003, “Fiscal Transparency in EU Accession Countries: Progress and Future Challenges,” IMF Working Paper 03/163 (Washington: International Monetary Fund).

- Calvo, Guillermo, and Frederic Mishkin, 2003, “The Mirage of Exchange Rate Regimes for Emerging Market Economies,” NBER Working Paper No. 9808 (Cambridge, Massachusetts: National Bureau of Edconomic Research).

- Drazen, Allan and Paul R. Masson, 1994, “Credibility of Policies versus Credibility of Policymakers,” Quarterly Journal of Economics, Vol. 109,  pp. 735–54.

- European Commission, 2002, European Economy: Public Finances in EMU, No. 3

- Gleich, Holger, and Jürgen von Hagen, 2003, “The Evolution of Budget Institutions: Evidence from Central and Eastern European Countries,” ZEI, University of Bonn.

- Kopits, George, forthcoming, “Fiscal Policy and High Capital Mobility,” in G. Kopits (ed.) Rules-Based Fiscal Policy in Emerging Markets: Background, Analysis and Prospects, London: Macmillan.

- Kopits, George and István P. Székely, 2004, “Fiscal Policy Challenges of EU Accession for the Baltics and Central Europe,” in G. Tumpel-Gugerell and P. Mooslechner (eds.), Structural Challenges for Europe, Cheltenham: Edward Elgar, pp. 277–97.

- Krugman, Paul, 1979, “A Model of Balance-of-Payments Crises,” Journal of Money, Credit and Banking, Vol. 11, pp. 311–25.

- Nordhaus, William, 1975, “Political Business Cycle,” Review of Economic Studies, Vol. 42, pp. 169–89.

- Persson, Torsten, and Lars Svensson, 1989, “Why a Stubborn Conservative Would Run a Deficit: Policy with Time-Inconsistent Preferences,” Quarterly Journal of Economics, Vol. 104, pp.  325–45.

- Persson, Torsten, and Guido Tabellini, 2000, Political Economics: Explaining Economic Policy, Cambridge, Mass.: MIT Press.

- Sun, Yan, 2003, “Do Fixed Exchange Rates Induce More Fiscal Discipline?,” IMF Working Papers 03/78 (Washington: International Monetgary Fund).

- Székely, István P., 2003, “Poland: Fiscal Policy, Fiscal Sustainability, and Fiscal Risk on the Way to EU Accession,” Poland 2003 Article IV Report: Selected Issues, IMF, June

- Tornell, Aaron, and Andres Velasco, 1998, “Fiscal Discipline and the Choice of a Nominal Anchor in Stabilization,” Journal of International Economics, Vol. 46, pp. 1–30.

*Source: _wp0462 - REFERENCES*

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