Fiscal Policy in Transition. Economic Policy Initiative Forum Report 3

Fiscal policy has turned out to be one of the most difficult components of transition policy, reflecting problems that arise in other areas of post-Communist stabilization. During transition, moreover, the state of public finances usually serves as an excellent litmus test of the progress achieved in stabilization and the degree of internal consistency and far-sightedness of transition policy. This issue of the EPI Forum Report presents an assessment by several leading experts from both West and East of the fiscal policy challenges now facing the Central and East European (CEE) countries as they attempt to negotiate their accession to the European Union (EU). The report begins with a dynamic (historical) analysis by Marek Dabrowski of the evolution of fiscal policy problems during transition. Fabrizio Coricelli then examines how in particular the task of restructuring the economy affects the state of the budget. Urszula Kosterna compares the fiscal policy patterns and problems currently experienced by the individual CEE countries. Coricelli then examines long-term considerations in fiscal policy, and finally Kosterna offers a comparison of the fiscal policy patterns in the CEE and EU countries. The report ends with a discussion by Lorand Ambrus-Lakatos and Mark E Schaffer of recommendations for fiscal policy reform and how to link fiscal reforms in the CEE countries to accession to the European Union. This is a succinct yet comprehensive account of the fiscal situation in Central and Eastern Europe, of interest to anyone concerned with the economics and politics of the region.