6533b82cfe1ef96bd128eb0b
RESEARCH PRODUCT
Does politics matter in the conduct of fiscal policy? Political determinants of the fiscal sustainability: Evidence from seven individual Central and Eastern European countries (CEEC)
Matthieu LlorcaSrdjan Redžepagićsubject
Economic policyjel:E62media_common.quotation_subjectjel:H62Fiscal reaction function Public debt sustainability Political budget cycles Time seriesPolitical Time series.PoliticsDummy variableDebtEconomics[ SHS.ECO ] Humanities and Social Sciences/Economies and finances[SHS.ECO] Humanities and Social Sciences/Economics and Financemedia_commonpolitical budget cycleslcsh:Economic theory. DemographyFiscal reaction function[SHS.ECO]Humanities and Social Sciences/Economics and FinanceFiscal unionFiscal policylcsh:HB1-3840Political Time seriesEastern europeanPublic debt sustainabilitySustainabilityjel:P16time seriesFiscal sustainabilityGeneral Economics Econometrics and Financedescription
This paper aims at assessing the fiscal sustainability and its political determinants in seven Central and Eastern European Countries (CEEC), namely Estonia, Latvia, Lithuania, Poland, Slovenia, Slovakia and the Czech Republic. First, using the recent sustainability approach of Bohn (1998) based on fiscal reaction function, econometric findings using Ordinary Least Squares (OLS) reveal a positive response of the primary surplus to changes in debt in several countries. In other words, fiscal policy is sustainable in Baltic countries, Slovenia and Slovakia, but not in Poland and in the Czech Republic. Second, by introducing political dummy variables, we test the electoral budget cycle and the partisan cycle theories. We find the presence of electoral and partisan cycle in Poland but not in the rest of our countries.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2007-01-01 | Panoeconomicus |