Macroeconomic Policy Frameworks of Small States

A Case Study of Malta

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Malta’s socio-economic successes have been remarkable. Key policy decisions have enabled this small island state to cope with its inherent vulnerabilities. This book reviews the implementation of macroeconomic policies in Malta, identifying the key issues, lessons learnt and best practices which could be adapted by other small states. It also sets out the country’s challenges for the future, which include managing a huge fiscal deficit, a high unemployment rate and attending to the conflicting demands of environmental conservation and economic development.



Fiscal Policy Strategies in Small States

The Maltese government over the years has pursued a policy of gradual economic liberalisation and privatisation. The economic liberalisation/privatisation programme was carried out with the aim of changing the focus of orientation of trade and financial policies towards a market mechanism principle. As a result, this has shifted policy orientation from reliance on direct government intervention and control towards a pro-market mechanism.


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