Fiscal governance in Central and Eastern Europe before and after European Union Accession : what role Europeanisation?

Our paper focuses on the development of fiscal institutions in Central and East European countries from 1998 to 2007. Following the Europeanisation literature as well as the expectations that the European Union established in its dialogue with prospective members through annual “Preaccession Economic Programmes,” one would anticipate that there would have been reform of fiscal institutions in the run-up to EU accession. Unlike in most other policy fields, there is an additional incentive to continue reform once a country has joined the EU, which is eurozone membership. This paper explains how we measure fiscal institutions and fiscal reforms. We provide time series data on the fiscal institutions each country has had in place, and, based on a new set of surveys and interviews we conducted, we compare the state of these fiscal institutions in 2007, or after the countries had acceded to the EU, with the institutions in place before accession. We find that preparations for the EU accession prior to 2004 did lead to some changes in budget process in this set of countries. The carrot of EMU membership after acceding to the EU, however, has so far not had the same effect--the pace of reform has since stalled, with most countries leaving the same fiscal institutions in place.In some countries further reforms to develop medium-term fiscal frameworks are either planned or are in a process of being initiated but it is too early to say if the reforms will truly materialise and transform the frameworks into a vehicle that would impose a serious constraint for government spending