Fiscal indulgence in Central Europe: loss of the external anchor?

Helge Berger (), George Kopits and Istvan P Szekely

No 2006/9, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: In recent years, fiscal performance in Central Europe has steadily deteriorated, in contrast to the improvement in the Baltics. This paper explores the determinants of such differences among countries on the path to EU accession. Regression estimates suggest that economic and institutional fundamentals do not provide a full explanation. An alternative explanation lies in the political economy of the accession process, and a game-theoretic model illustrates why a country with a stronger bargaining position might have an incentive to deviate from convergence to the Maastricht criteria. The model generates alternative fiscal policy regimes - allowing for regime shifts - depending on country characteristics and EU policies.

Keywords: Fiscal policy; EU economic and monetary union; game-theoretic approach (search for similar items in EconPapers)
JEL-codes: C70 H6 (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/28035/1/517662272.PDF (application/pdf)

Related works:
Journal Article: FISCAL INDULGENCE IN CENTRAL EUROPE: LOSS OF THE EXTERNAL ANCHOR? (2007)
Working Paper: Fiscal Indulgence in Central Europe: Loss of the External Anchor (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:20069

Access Statistics for this paper

More papers in Discussion Papers from Free University Berlin, School of Business & Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().