Lessons in Fiscal Consolidation for the Successor States of the Soviet Union

June 1, 1993

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 reviews lessons in fiscal consolidation for the former Soviet Union that emerge from the experience of Central and Eastern European economies in transition. A central lesson is the need to support the macroeconomic stabilization with a front-loaded fiscal adjustment. Consistent with this adjustment path, structural reform in the tax and expenditure areas should be aimed at allocative efficiency and fairness, and its sequencing be predicated largely on administrative constraints. In the face of the uncertainty of fiscal projections, formulation of contingency measures is necessary. In addition, elimination of submerged fiscal imbalances, stemming from quasi-fiscal activities of state-owned nonfinancial enterprises and financial institutions, is just as important as correcting the measured budget deficit.

Subject: Budget planning and preparation, Expenditure, Fiscal consolidation, Fiscal policy, Government debt management, Public financial management (PFM)

Keywords: Baltics, break, Budget planning and preparation, CEE economy, CEE experience, CEE experience point, contingent government liability, economy, Fiscal consolidation, government, Government debt management, government operation, governments in CEE, interest-yielding government paper, market economy, nonfinancial enterprise, single-enterprise industry, WP

Pages:
26
Volume:
1993
DOI:
https://doi.org/10.5089/9781451847444.001
Issue:
054
Series:
Working Paper No. 1993/054
Stock No:
WPIEA0541993
ISBN:
9781451847444
ISSN:
1018-5941

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Notes

Reviews lessons in fiscal consolidation for the former Soviet Union that emerge from the experience of Central and Eastern European economies in transition.

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