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Fiscal impact of privatization revisited: The role of tax revenues in transition economies

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  • Crivelli, Ernesto

Abstract

In contrast to earlier literature, this paper finds empirical evidence that privatization has deteriorated fiscal balances in transition economies. The investigation focuses on the role of tax revenues in explaining the fiscal impact of privatization, as it appears that tax revenue in many transition countries remained lackluster even after the adoption of several tax reforms in the last two decades, and no formal econometric assessment has been conducted of the extent to which privatization has affected tax revenues. Using panel data for 29 Eastern European and former Soviet Union countries, the analysis finds robust signs of a strong negative impact of privatization on different tax revenue sources. The paper also provides some empirical evidence favoring the early adoption of value-added taxes that appear to have contributed to government revenue recovery.

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  • Crivelli, Ernesto, 2013. "Fiscal impact of privatization revisited: The role of tax revenues in transition economies," Economic Systems, Elsevier, vol. 37(2), pages 217-232.
    • Handle: RePEc:eee:ecosys:v:37:y:2013:i:2:p:217-232
    DOI: 10.1016/j.ecosys.2012.11.003
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    8. Mr. Liam P. Ebrill, 1999. "Tax Reform in the Baltics, Russia, and Other Countries of the Former Soviet Union," IMF Occasional Papers 1999/010, International Monetary Fund.
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    Cited by:

    1. Chletsos, Michael & Sintos, Andreas, 2021. "Hide and seek: IMF intervention and the shadow economy," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 292-319.
    2. Crivelli, Ernesto & Gupta, Sanjeev, 2014. "Resource blessing, revenue curse? Domestic revenue effort in resource-rich countries," European Journal of Political Economy, Elsevier, vol. 35(C), pages 88-101.
    3. Damien Cubizol, 2015. "Unbalanced credit distribution in emerging economies and FDI," Working Papers 1532, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    4. Arbolino, Roberta & Carlucci, Fabio & Cirà, Andrea & De Simone, Luisa & Ioppolo, Giuseppe & Yigitcanlar, Tan, 2018. "Factors affecting transport privatization: An empirical analysis of the EU," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 149-160.
    5. Damien Cubizol, 2015. "Unbalanced credit distribution in emerging economies and FDI," Working Papers halshs-01241147, HAL.

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    More about this item

    Keywords

    Fiscal balance; Privatization; Taxation; Transition;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • P35 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance

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