Budgetary Subsidies in Centrally Planned Economies in Transition

Author/Editor:

Robert Holzmann

Publication Date:

January 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 1991/011

Subject:

English

Publication Date:

January 1, 1991

ISBN/ISSN:

9781451925883/1018-5941

Stock No:

WPIEA0111991

Pages:

32

Please address any questions about this title to publications@imf.org