The role of the international monetary fund and the world bank for establishing fiscal discipline in transition economies:Azerbaijan case

For the last quarter of previous century, world has been faced with very important developments. As some examples to these developments we can emphesize on two oil crizes that have been prompted out in 70s and some fails of Keynesian economic school that were accepted by the economically developped countries to be the ideal economical system for the last 50 years. After these kinds of dissappointing consequences, since 1980s, world has turned the face again to the market economy model, formed by the classic school formers. In addition to these reformings and reconstructions in capitalist part of the world, another important factor for market economy model to get rainforced and be dominant economic system in the world, was the decisions of former USSR countries and the countries of central and eastern Europe to reform their economy under market economy model, especially after the collapse of USSR that were applying a centrally controlled economy model. An enermous increase of oil prices which had resulted critical abovementioned oil crizes, had also resulted increases in external debts of developping countries, and increase of public expenditures because of goverment interventions and control on economy that was inspired from Keynesian model of economy. As far as the public revenues are limited in accordance to their structures, increasing of pulic expenditures has disbalanced the public revenue ? expenditure balance and destroyed the fiscal discipline. Being one of the whole complex of facotrs happened during 1970 and 1980s, this factor has also seriously helped the tendencies about the vitality of returning back to the market economy model that strictly conditions the decrease of government?s economic functions. In the countries of Transition Economy that had been almost 70 years applied centrally planned economıc model, fiscal discipline problem as one of the most inmortant ones for these countries had especially occured in the first years of Transition period. Taking into considirarion the unsuffciant theoritical infrastructure and experience of transition economy countries, International Monetary Fund and World Bank have undertaken leader responsibilities to help them in realizing the reforms necessary to solve the fiscal discipline problems and reach the market economy objectives. As in other transition economy countries, in Azerbajan also IMF and World Bank has played active roles for resolving the fiscal discipline problems that have the country survived during the first years of transition period