Fiscal Reform in European Economies in Transition
IMF Working Papers, April 1, 1991
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Bibliographic details
- Authors: George Kopits
- Published: April 1, 1991
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451846256.001
Summary and key findings
- Most European economies in transition are engaged in public sector reform aimed mainly at replacing the previous fiscal system subordinated to the central plan with a system where fiscal instruments can make a distinct contribution to stabilization, equity, and efficiency.
- The paper examines past progress and future tasks in major reform areas: taxation, subsidies, social security, public investment, public enterprises, government debt, and intergovernmental relations.
- An overview of the fiscal reform process suggests that the contraction and restructuring of government operations are not likely to materialize soon and that there is a serious risk of widening fiscal imbalances during the transition.
Major reform areas examined
- Taxation
- Subsidies
- Social security
- Public investment
- Public enterprises
- Government debt
- Intergovernmental relations
Assessment and outlook
- Progress to date has not yet produced the contraction and restructuring of government operations necessary to align fiscal structures with market-oriented objectives.
- There is a serious risk of widening fiscal imbalances during the transition if reforms do not accelerate or are not effectively implemented.
Policy implications and tasks ahead
- Replace fiscal systems subordinated to the central plan with systems where fiscal instruments contribute to stabilization, equity, and efficiency.
- Address taxation, subsidies, social security, public investment, public enterprises, government debt, and intergovernmental relations as priority reform areas to avoid widening fiscal imbalances.
Fiscal Reform in European Economies in Transition — George Kopits, April 1, 1991.