Public Finance, Governance, and Growth in Transition Economies : Empirical Evidence from 1992-2004

Pushak, Taras ; Tiongson, Erwin R. ; Varoudakis, Aristomene

World Bank, Washington, DC

关键词: ACCOUNTING;    ADVERSE EFFECTS;    ALLOCATION;    ALLOCATION OF RESOURCES;    ANNUAL GROWTH;   

DOI  :  10.1596/1813-9450-4255
RP-ID  :  WPS4255

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper revisits the early empiricalliterature on economic growth in transition economies, withparticular focus on fiscal policy variables-fiscal balanceand the size of government. The baseline model uses aparsimonious specification, drawn from Fischer and Sahay(2000), of economic growth as a function of initialconditions, stabilization, liberalization, and structuralreform. The paper expands the data used in previous analysesby up to 10 years and finds unambiguous evidence that fiscalbalance matters for growth, while confirming other previousfindings on the correlates of economic growth in transitioneconomies. In addition, the paper extends the baseline modeland explores potential sources of nonlinearities in therelationship between growth and public finance. A keyfinding is that determinants of growth may vary in relativeimportance, depending on the underlying institutionalquality. The evidence indicates that there could be highergrowth payoffs from macroeconomic stability and publicexpenditure in countries characterized by relatively betterpublic sector governance as measured by relevant indicators.In addition, the size of government matters for growth in anonlinear manner: Beyond indicative thresholds ofexpenditure levels, public spending has a negative impact,while at levels below the threshold, there is no measurableimpact on economic growth.