University of Szeged | Faculty of Economics and Business Administration,Institute of Economics and Economic Development - Academ

"The collapse of socialist economies in Eastern Europe and former Soviet Union, as well as their subsequent transition towards market economies, was arguably one of the most far-reaching economic events of the 20th century. Pain accompanied the economic transition process; all countries experienced a major fall in output after the start of re-forms. The growth performance in transition economies was widely different by countries. The fall finished in 1992 in Poland, but was still present until 2000 in Ukraine. In 2003, only six countries have outrun their 1989 level of GDP: Poland, Slovenia, Albania, Hun-gary, Slovakia and the Czech Republic.
In this paper, the focus is on the fiscal policy of 18 transition economies (Albania, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Poland, Romania, Serbia and Montenegro, Slovakia, Slovenia and Ukraine), during the period of 1990-2003.
The usual papers examine the fiscal policy issues by fore-judgement, the initial con-ditions or the analytical tools determine the main results (for example in regression analysis the right-hand side variables are declared to be endogenous, the expected value of the residuum equal to zero enforce the existence of some equilibrium, etc., see [Kotosz, 2002] and [Kotosz, 2004c]). To avoid this obvious fault, in my analysis I used simple methods in my work (calculations of means and standard deviations). In the literature of the detailed budget analysis, the definition of fiscal restrictions and expansions is always problematic. Different authors (Alesina, Perotti, Giavazzi, Pagano, Purfield, and Blanch-ard) use different definitions generally based on fix change of cyclically adjusted primary budget deficit. As in transition economies, the stability of fiscal policy was widely dispa-rate by countries, I prefer to use relative measures.
In the first part, I summarize earlier methods and results, in the second part I show my database and the methods used in the paper, and in the third part can be found the results of the analysis. Finally, I summarize the main findings of the paper."