Essays on Fiscal Policy and the Support for Economic Reform in Emerging Europe

by Markus Eller

Institution: Vienna University of Economics and Business
Year: 2011
Keywords: RVK QG 470 ; JEL A13, C54, E62, H11, H21, H5, H6, L33, P2, P36; fiscal policy / cross-border spillovers / fiscal multiplier / automatic stabilizers / fiscal space / cyclicality of fiscal policy / discretionary fiscal policy / distortionary taxation / productive public expenditures / privatization / support for economic reform / attitudes / perceptions / trust / regulation / structural vector autoregression / endogeneity / nonlinearity / Central and Eastern Europe / emerging Europe / Russia
Record ID: 1031748
Full text PDF: http://epub.wu.ac.at/3167/1/Eller.pdf


This doctoral thesis addresses in a sequence of five essays the question how fiscal policy and economic output are interrelated in emerging Europe and how this relationship is shaped by the respective politico-economic environment and the individual-level support for economic reforms. Following main findings can be highlighted: (1) Countries in Central, Eastern and Southeastern Europe (CESEE) respond to a fiscal expansion in the euro area with fiscal easing at home, while the GDP response is mixed across countries.(2)Automatic fiscal stabilizers are comparatively small and discretionary fiscal policy has been largely pro-cyclical in CESEE. (3) The public spending and revenue structure is more "growth-friendly" in CESEEthan in the EU-15. (4) In transition economies with more democratic institutions and a better quality of governance, individuals with high market-relevant skills show a significantly larger support of the privatization status quo than individuals with low market skills. (5) The society in Russia - triggered by a lack of social capital - chooses to demand more state regulationand tolerate corruption to reduce negative externalities imposed by private business.(author's abstract)