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On the mechanisms of achieving fiscal (un)sustainability: the case of Poland

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  • Michał Mackiewicz
  • Piotr Krajewski

Abstract

Aim of this paper is to assess empirically the sustainability of budgetary policy in Poland in Years 1992-2005. Our results show that structural surplus did not respond in a way that would stabilize the level of public debt, thus not fulfilling the condition of sustainability. It also showed asymmetric behaviour of revenues and expenditures: while the former tended to adjust to the level of debt in a stabilizing manner, the latter moved independently from debt, while also in a non-stationary way, which made fiscal policy unsustainable in the long run. Fiscal institutions were unable to respond in a debt- stabilizing manner to two large negative budgetary shocks: structural reforms of the public sector, and joining the EU. This makes them unlikely to respond to the future fiscal shocks, and suggests that fiscal institutions in Poland lack the ability to run sustainable fiscal policy.
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Suggested Citation

  • Michał Mackiewicz & Piotr Krajewski, 2009. "On the mechanisms of achieving fiscal (un)sustainability: the case of Poland," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 36(4), pages 445-460, November.
    • Handle: RePEc:kap:empiri:v:36:y:2009:i:4:p:445-460
    DOI: 10.1007/s10663-009-9103-x
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    Cited by:

    1. Tronzano, Marco, 2017. "Testing Fiscal Sustainability In The Transition Economies Of Eastern Europe: The Case Of Poland (1999-2015)," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 70(1), pages 103-132.
    2. Jarmulska, Barbara, 2016. "Analiza stabilności fiskalnej w Polsce w latach 1995-2014 [The Analysis of Fiscal Stability in Poland in the Years 1995-2014]," MPRA Paper 100830, University Library of Munich, Germany.

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    More about this item

    Keywords

    Fiscal sustainability; Fiscal institutions; E60; E63;
    All these keywords.

    JEL classification:

    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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