Abstract
The aim of this paper is to analyse fiscal policy in former Yugoslavian countries over the period 2001–2014. The contribution of the paper is threefold; first, we build a homogeneous database to describe the evolution of the main fiscal aggregates in each country using an identical analytical structure. Second, we analyse the composition of national tax revenues to determine whether common patterns are still present, or if they have evolved in different ways over time. Third, we pool data to analyse and compute the elasticity of budget imbalance, taxes and expenditure to the output gap. Our results show that tax revenue composition is still similar and that the economic cycle is very relevant in explaining the dynamics of both deficit and expenditure over Gross Domestic Product, but not revenues.
Highlights
Since the dissolution of Yugoslavia in the 1990s, its former republics (Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Slovenia) have taken different paths; one common denominator for all of them is the European path
We analyse the composition of national tax revenues to determine whether common patterns are still present, or if they have evolved in different ways over time
Our results show that tax revenue composition is still similar and that the economic cycle is very relevant in explaining the dynamics of both deficit and expenditure over Gross Domestic Product, but not revenues
Summary
Since the dissolution of Yugoslavia in the 1990s, its former republics (Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Slovenia) have taken different paths; one common denominator for all of them is the European path On their way towards the European Union (E.U.), all countries have had to undergo a process of transition from a centrally planned, socialist economy towards a free market economy. Cross-country studies involve the possibility of comparing evolutions from a common starting point; secession is a type of natural experiment. It increases the sample size for performing econometric analysis on
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