Fiscal Transparency and Policy Rules in Poland

This paper discusses the link between the deficit bias in public finance and institutional settings. The Polish experience is put in a wider context and provides an extensive discussion of possible institutional reforms that may be implemented to stabilise the path of fiscal policy and reduce the deficit bias. Although substantial improvements have been made in Poland with respect to fiscal transparency standards set by the IMF and EU there is still much scope for enhancement. The recommended change in fiscal policy would involve the implementation of medium-term budgetary framework that would ensure consistency between the budgetary process and medium-term fiscal goals. This should be accompanied by the introduction of binding constraints on fiscal policy. The expenditure rule could be reintroduced to strengthen fiscal discipline, as it could force policymakers to tighten fiscal policy. It seems to be indispensable to maintain fiscal rules at the local government level. The issue of still limited fiscal transparency and unsatisfactory performance of fiscal rules requires the undertaking of various appropriate measures to strengthen the policy framework in Poland. This can be done in our view by involving external institution entitled to examine fiscal transparency and the performance of fiscal rules in the budgetary process. We think that the institution that is fully capable to take the lead in this respect is the NIK, which was granted full independence in 1994 and has since proved to be successful in overseeing public finances. This should, however, be accompanied by simultaneous enhancement of the internal audit.Fiscal Transparency, Fiscal Rules, Fiscal Discipline, Institutions

Monetary Policy Transparency in the Inflation Targeting

This paper quantifies transparency of monetary policy in the three EU New Member States that have adopted direct inflation targeting strategy. Two measures of transparency are applied. The institutional measure reflects the extent to which a central bank discloses information that is related to the policymaking process. The behavioural measure reflects the clarity among the financial market participants about the true course of monetary policy. The paper shows an ambiguous association between the two measures of transparency, which may be attributed to the active exchange rate management policy that undermines the actual transparency proxied by the behavioural measure.monetary policy, institutional and behavioural transparency, direct inflation targeting, EU New Member States, European Monetary Union

Monetary Policy Transparency in Inflation Targeting Countries: the Czech Republic, Hungary and Poland

This paper quantifies transparency of monetary policy in the three EU New Member States that have adopted direct inflation targeting strategy. Two measures of transparency are applied. The institutional measure reflects the extent to which a central bank discloses information that is related to the policymaking process. The behavioural measure reflects the clarity among the financial market participants about the true course of monetary policy. The paper shows an ambiguous association between the two measures of transparency, which may be attributed to the active exchange rate management policy that undermines the actual transparency proxied by the behavioural measure.monetary policy, institutional and behavioural transparency, direct inflation targeting, EU New Member States, European Monetary Union

How to calibrate fiscal rules : a primer

This note provides guidance on how to calibrate fiscal rules; that is, how to determine the thresholds (ceiling, floor, or target) for specific fiscal aggregates constrained by rules. The note focuses, more specifically, on the calibration of the debt, balance, and expenditure rules

Sustainability and Equity Challenges to Pension Systems: The Case of Lebanon

Reform of Lebanon’s pension system is indispensable. The country already faces fiscal sustainability risks, which will be compounded in the future by significantly higher pension- related spending and liabilities, mainly reflecting adverse demographics. In addition to sustainability issues, the pension system also suffers from equity shortcomings – Lebanon is the only MENA country that does not offer social security for retirees in the private sector. While several reform proposals have been formulated since the early 2000s, none has been implemented to date. Costs mount with every year of delay, so action is required soon to address these challenges

Zero Corporate Income Tax in Moldova

Global economic integration intensified tax competition and raised concerns about the resulting "race to the bottom", which could undermine public investment and social spending. The aim of this paper is to test predictions that (i) there is interdependence in CIT rate setting in Eastern Europe and that (ii) the recent CIT cut in Moldova may intensify tax competition in the region. It finds that there is indeed evidence that during 1995-2006 countries in Eastern Europe strategically responded to changes in CIT rates in the region and that Moldovan zero CIT is likely to encourage further cuts in CIT. The paper also discusses implications of tax competition for Eastern Europe and finds that FDI flows will not be much affected, tax revenues are likely to decline, the shift in the composition in tax revenue may increase economic efficiency, but decrease equity. Tax coordination, while difficult politically, could help stem further decline in corporate taxation, but any gains might be modest and not certain to exceed the costs of tax coordination. Without tax coordination, however, it is unclear what exactly could stop corporate taxes from falling further.Corporate taxes;Public investment;Tax revenues;Foreign direct investment;tax competition, corporate tax, tax coordination, corporate tax rates, tax revenue, tax rate, corporate taxation, corporate tax revenue, corporate income tax, international tax, tax system, tax systems, tax policy, tax arbitrage, direct investment, corporate tax rate, taxes on capital, income tax rate, effective tax rates, personal income tax, direct taxes, tax evasion, tax reforms, tax administration, income tax rates, higher tax revenues, income taxes, multinational companies, corporate tax burden, payroll taxes, tax avoidance, federal tax, national tax journal, optimal tax, corporate tax base, domestic investment, corporate tax revenues, international tax competition, optimal taxation, tax journal, corporate tax bases, environmental taxes, tax liabilities, national taxes, corporate income taxation, investors, income shifting, tax reduction, dividend taxation, higher tax rates, personal taxes, average tax rate, tax purposes, personal income taxes, foreign companies, tax countries, high tax rates, foreign investors, corporate tax competition, domestic tax, institutional development, taxes on income, labor taxes, home country, tax return, personal income tax rate, flat taxes, tax reform, private investment, corporate tax systems, consumption taxes, tax efficiency, corporate income taxes, vat rate, capital income taxation, regional tax, tax payments, high tax countries, tax exemptions, costs of taxation, corporate tax reform, direct taxation, tax havens, capital structure, lower tax rates, cost of capital, dividend payments, tax treatment, tax incidence, tax policy analysis

Economic Growth and Regional Disparities in the Slovak Republic

This paper finds that regional disparities have widened in Slovakia since 2000. Notwithstanding σ-divergence in the levels, there was conditional β-convergence in the growth rates of GDP per capita and labor productivity. Improvements in total factor productivity, mostly due to within-sector effects, were the main engine of growth of GDP in all regions. Sustaining growth and reducing disparities will require increasing labor utilization and improving the structural and policy determinants of productivity in the eastern regions. The main policy priorities are to improve transportation infrastructure, enhance cost competitiveness, and increase accumulation of human capital.

Anatomy of Regional Disparities in the Slovak Republic

This paper examines economic growth and various dimensions of regional disparities in Slovakia. We find that regional disparities in the levels of GDP per capita, labor productivity, and labor utilization have widened since 2000, coinciding with the time that Slovakia initiated negotiations on EU accession. Notwithstanding ?-divergence in the levels, there was conditional ?-convergence in the growth rates of GDP per capita and labor productivity. Improvements in total factor productivity were the main engine of growth of GDP in all regions. Sustaining growth and reducing disparities will require increasing the labor utilization ratio and improving the structural and policy determinants of productivity in the eastern regions. The main policy priorities are to improve transportation infrastructure, enhance cost competitiveness through greater regional differentiation in wages and further decentralization of collective bargaining, and increase accumulation of human capital.Economic growth;Economic models;European Union;Labor market policy;Labor productivity;gdp per capita, labor utilization, gdp growth, labor productivity growth, labor costs, growth accounting, labor market, growth rate, growth rates, collective bargaining, skilled labor, real gdp, total factor productivity, average wage, skilled workers, per capita income, labor productivity levels, labor market institutions, active labor, active labor market programs, rapid economic growth, job vacancies, capital formation, new jobs, labor market reforms, job losses, labor market programs, gross domestic product, active labor market, fixed capital formation, average productivity growth, jobs, labor supply, labor force, new job, job seekers, job creation

The fiscal costs of systemic banking crises

International audienc