University of agribusiness and rural development, Fiscal policy, globalization and economic growth: sustainable development challenges and perspectives

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THE ROLE OF SUSTAINABLE FISCAL POLICY ON ECONOMIC GROWTH - STUDY CASE, FISCAL POLICY OF 2015 IN KOSOVO
Sherif Gashi, Adnan Berisha

Last modified: 2020-02-27

Abstract


The Fiscal Incomes are the main source of incomes for a country. The Fiscal Sustainability is one of the most important indicators of fiscal policy appraisal. The initial objective of Fiscal policy is to guarantee the minimal budget revenues, but from the moment that the financial continuity of the state is guaranteed, the state sets other fiscal policy objectives.

Worldwide, the governments need to formulate and implement the tax and public expenditures policies. These policies can have major impacts on economic growth, incomes distribution and poverty and so they have the tendency to be at the center of economic and political discussions.

In economic literature none of the components of fiscal policy such as taxes, government expenditures and budget deficit show strong correlation with economic growth when they are analyzed as separate. Despite is not found an empirical connection between fiscal policy and economic growth, the role of fiscal policy in economic development is essential.

The 1998-1999 war has completely destroyed Kosova's economy, destroyed the basic legal infrastructure and the family economies. The state of Kosova, the newest state in the region and wider, is faced many difficulties to find a suitable and sustainable fiscal policy module. In the beginning, UNMIK established the legal basis for fiscal policies through regulations, by proclaiming Kosovo's independence, the state of Kosovo drafted laws that regulating the fiscal policy. The deepest and most important fiscal policy reform was that of 2015. The reform enabled the fulfillment of budget needs, social policy mitigation, more sustainable business development, and reduced informality. The fiscal sustainable is of the most important indicators of fiscal policy appraisal. Fiscal sustainability enables businesses to easily plan, manage and report on their business. The frequent change of laws creates an stagnation, an ambiguity to businesses.

 


Keywords


Fiscal Policy, Sustainable, Kosovo, Reform, Budget, Business, Economic Growth