This paper analyzes the determinants of growth in 25 transition economies during 1990–97. The paper’s main finding is that macroeconomic stabilization, structural reform, and reduction of government expenditures are key to achieving sustainable growth. Although the initial effect of reforms...

The paper discusses the social protection implications of the weakening financial and administrative capacity of countries undergoing economic transition. The formal sector is shrinking, and unemployment and underemployment are rising rapidly. This is affecting both the revenue base of social...

This paper examines stabilization policies in Vietnam, Cambodia, and Laos since the late 1980s. Compared with other transition economies, the Indochinese countries avoided an output collapse and moved quickly to strong GDP growth and low inflation. Each adopted a similar mix of policies centered...

The tax on immovable property has been characterized as probably the most unpopular among tax instruments, in part because it is salient and hard to avoid. But economists continue to emphasize the virtues of the property tax owing to its relatively low efficieny costs, benign impact on growth,...

Real wage declines have been common in the public sector in many countries over substantial periods of time. In several cases, such wage reductions have coincided with a decline in the efficiency of the public sector. In a simple analytical framework, it is shown that higher wage levels alter...

The reasons for the growth of interenterprise debt are analyzed. It is suggested that it results mainly from the appearance of normal trade credit in a liberalized economy, and when a monetary squeeze is part of a stabilization attempt that is not credible. In the latter case, the result can be...

In light of the persistence of moderate inflation in many transition economies, this paper analyzes whether inflation resulted from insufficiently tight financial policies and wage pressures or from the protracted adjustment of relative prices. Using a new database for 21 countries, the effect...

Several transition economies have undertaken fiscal decentralization reforms over the past two decades along with liberalization, privatization, and stabilization reforms. Theory predicts that decentralization may aggravate fiscal imbalances, unless the right incentives are in place to promote...

In many countries of the former Soviet Union, pensioners form a large and vulnerable group of the population, with pensions fixed in nominal terms. Attempts to “protect” this group have included a revaluation of benefits for retirees and the introduction of indexation arrangements based on...

This paper discusses different instruments of monetary policy, and in particular the choice between direct and indirect instruments. It identifies the main characteristics of a country’s financial system that should be considered in selecting monetary instruments, and analyzes how these...