Fiscal Policy and Capital Formation in Transition Economies

SUMMARY In the 199Os the transition economies of Eastern Europe and the former Soviet Union have suffered significant recession and persistent imbalances. Over ten years of vast changes GDP has contracted significantly and income inequality increased, too. In several countries post-socialist depression still continues. Whereas in the best example, that is Poland, GDP in 1999 is at about 12O percent of pre-transition level of 1989, in the countries involved in…