Political Influence on Creating of Saving-Investment Gap in Transition Countries

Damir Piplica ()
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Damir Piplica: University of Split, Croatia.

Journal of Economics and Political Economy, 2015, vol. 2, issue 4, 445-459

Abstract: Governments of transition countries should become aware of the importance of implementation of such an economic policy that would encourage higher saving rates and at the same time bringing it in accordance with investment rates in order to achieve other important macroeconomic goals, without jeopardizing macroeconomic stability of their respective economies. Transition countries EU members have not conduct such an economic policy, which resulted in existence of a substantial difference between total investments and gross national savings in their countries. Although the influence of saving on investments was significant, conducting of economic (investment) policy of the right-wing governments of the transition countries EU members has more influenced imbalance of saving and investment in comparison to the left-wing governments. Should the right-wing governments, in applying of economic measures that stimulate higher investment rate than previous, follow their ideological point of view instead of turning to 'middle' voters, they would have an easier position in reducing saving-investment gap and in achieving macroeconomic stability in comparison to the left-wing governments. However, should the right-wing governments turn more opportunistically to 'middle' voters, instead following their ideological programme, that would make their position difficult in reducing saving-investment gap, because influence of saving to investment would be significantly lesser. Increasing of saving rate with left-wing governments would have significantly weaker influence on balancing of saving and investment in comparison to the right-wing governments, but their opportunistically turning to 'middle' voters would create slightly better position in realizing of macroeconomic stability, because by this their influence on reducing saving-investment gap would be improved compared to the situation when they would follow their left-oriented party programme.

Keywords: Saving; Investment; Political parties; Transition countries; Economic policy. (search for similar items in EconPapers)
JEL-codes: E2 H1 P2 (search for similar items in EconPapers)
Date: 2015
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