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Fiscal Consolidations in the Central and Eastern European Countries

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Abstract

We study fiscal consolidations in the Central and Eastern European countries and what determines the probability of their success. We define consolidation events as substantive improvements in fiscal balances adjusting for the impact of cyclical effects. We use logit models for the period 1991–2003 to assess the determinants of the success of a fiscal adjustment. The results seem to suggest that for these countries expenditure based consolidations have tended to be more successful. By contrast, revenue-based consolidations have a tendency to be less successful.

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Authors and Affiliations

  1. Department of Economics, and UECE – Research Unit on Complexity in Economics, Technical University of Lisbon, Miguel Lúpi 20, 1249-078, Lisbon, Portugal

    António Afonso

  2. Directorate General Economics, European Central Bank, Kaiserstraße 29, D-60311, Frankfurt am Main, Germany

    António Afonso, Christiane Nickel & Philipp C. Rother

Authors
  1. António Afonso
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  2. Christiane Nickel
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  3. Philipp C. Rother
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Corresponding author

Correspondence to António Afonso.

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JEL no.

C25, E62, H62

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Afonso, A., Nickel, C. & Rother, P. Fiscal Consolidations in the Central and Eastern European Countries. Rev. World Econ. 142, 402–421 (2006). https://doi.org/10.1007/s10290-006-0073-9

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  • DOI: https://doi.org/10.1007/s10290-006-0073-9

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