2 depth surveys in particular fields such as kindergartens,<sup>3</sup> housing,<sup>4</sup> and asset divestiture in problem industries and regions.<sup>5</sup> We shall draw on this literature as appropriate in our own study' of Belarus, and attempt to augment it in areas which, in our opinion, have not received as much attention, such as the implications for local govermment and the interactions of enterprise provision of these functions with the tax 6 system.

# **Analysis of Enterprise Social Spending**

5. Tables 1-3 use enterprise statistics in Belarus to examine characteristics of spending on employee remuneration and "social development" and "social benefits" by type of benefit, size of firm, sector of the economy and region. In addition, but not showNn in the tables, the relative size of enterprise spending on these fringe benefits was compared for the years 1994 and 1995. It was also reported to us that there are systematic differences in fringe benefits available to different occupations" some occupations such as teaching allegedly receivc fewer fringe benefits. Our enterprise data did not allow us to examine such occupational differences, however.

6. There are measurement difficulties. Most importantly, data on some types of user cost recovery are incomplete, such as, for instancc. where fees arc collected for use of facilities such as kindergartens. This imparts a downward bias to comparisons over timc, since user cost recovery has been increasing for housing and utilities as a result of government policy and indeed is required as a condition of loans to Belarus by the IMF. A furthcr factor impeding comparisons over time is that data on the important category of housing maintenance undertaken by ente-prises was not collected in 1994.

7. With these qualifications in mind, four components of employee remuneration and enterprise spending on social functions are distinguished in Tables 1-3: wages; other monetarv payments to employees (such as bonuses and retirement allowances). enterprise spending on "social development" functions (primarily construction and maintenance of housing, infrastructure and facilities for sports, culture, and education); and other "social benefits" which consist of enterprise spending in kind taking such forms as subsidized meals, transport fares, medicines, etc. In Tablcs 2 and 3, we have aggregated firm spending on "social development" and "social benefits" to show a separate category of employee remuneration, namely non-monetary remuneration or fringe benefits.

> 292; Mark E. Schaffer, Richard Jackman, Giaspar Faijth **and** Judit l.akatos, Martin Rein, Irina 'Fratch and Andreas Woergoetter, "Round table on Divestiture _of'_ social scrvices lrom state-owned enterprises,'" _Economics of Transition,_ Vol. 3 (2), 1995.

- **3** See for instance Jeni Klugman, Sheila Marnie, John Mickiewright and Philip O'Kcfe, "Enterprise Divestiture of Kindergartens and Childcare Arrangements in Central Asia, in Jane lalkingham, Jeni Klugman, Sheila Marnie and John Micklewright (eds), _Household Welfare in Central ,lsia,_ (Macmillan, _UK,_ forthcoming 1996).

- **4** See Robert M. Buckley and Eugene M. Gorenko. "Unwinding the Socialist Wage Package: The Role of Housing in Russia," World Bank (TWVTRD), Dec. 1995, "Russian Enterprise Ilousing Divestiture,": Urban Institute Research Paper, 1995.

- **5** See Patrick Bodnar, Lev Freinkman, Vladimir Lexin and Alexandcr Shvetsov, "Russia: Financing and Maintenance of Social Assets Divested from the Coal Industry." World Bank (ECiC2), **Jtune** 1996.

- **6** I have used three sources for information on the tax systern in B3elarus: Richiard M. Bird and Thomas Tsiopoulos, "Taxation and the Development of Private Enterprise in I3clarus'" EC4C1, May 1994; Mick Keen, "JTax Reform in Belarus: Preliminary Report on Economic Aspects," KU 'EJacis, April 1996. and **L.** A. Khankevich, "The Taxation System in the Republic of Belarus," EC4C ], Jutne 1996.