Executive configuration and fiscal performance in post-communist central and eastern Europe

This article examines the relationship between the configuration of core executive institutions, with a particular focus on the position of the prime minister and finance minister, and fiscal performance, defined in terms of the maintenance of aggregate fiscal discipline and the predictability of the budgetary process. The study covers post-communist Hungary, Poland, the Czech Republic and Bulgaria. The first wave of institutional reform in these countries followed the transition to democracy and was essentially negative in its impact. It eliminated communist-era institutions that competed with the prime minister and the minister of finance, but left the two in a relatively weak position vis-a-vis their cabinet colleagues. This led to poor performance and serious fiscal crises in the mid-1990s. The second wave of institutional reform arose in response to the fiscal crises and created a more centralized configuration of executive institutions, producing significantly better fiscal performance.