nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2009‒01‒03
six papers chosen by
Anna Y. Borodina
Perm State University

  1. Economic Developments in the Wider Black Sea Region By Peter Havlik; Vasily Astrov
  2. Russian and Caspian hydrocarbons: energy supply stakes for the European Union By Catherine Locatelli
  3. Understanding the Contributions of Reallocation to Productivity Growth: Lessons from a Comparative Firm-Level Analysis By J. David Brown; John Earle
  4. Government Control of the Media By Scott Gehlbach; Konstantin Sonin
  5. Russian economic report No.16 (June 2008), The World Bank By Bogetic, Zeljko; Ulatov, Sergey; Emelyanova, Olga; Smits, Karlis
  6. Russian economic report No. 17 (November 2008), The World Bank By Zeljko, Bogetic; Karlis , Smits; Sergey , Ulatov; Olga, Emelyanova; Marco , Hernandez

  1. By: Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The Black Sea region comprises a heterogeneous group of countries: Bulgaria, Romania, Ukraine, Russia, Georgia, Armenia, Azerbaijan, and Turkey. Their economies differ in their size, institutional characteristics and integration perspectives, are facing vastly different problems, and find themselves at different levels of development. The economic performance of the region during the 1990s was highly unstable, and even the countries which were spared from internal conflicts did not fare much better than the rest. However, more recently, the region has enjoyed a fairly rapid economic recovery accompanied by welcome structural changes, although the labour market situation and social conditions in general are still very difficult. Both the economic heterogeneity of the Black Sea countries and political issues are crucial factors behind the presently rather low level of their regional integration: the latter generally proceeds only to the extent to which it is compatible with the (very unequal) format of these countries' relations with the EU. At the same time, multilateral integration under the auspices of Russia, which, given its economic size, could potentially serve as an alternative 'gravity centre', appears to be for a number of reasons equally problematic. In fact, the geographic trade patterns of the countries involved do not give an impression of the Black Sea region being a distinct trading block per se, and in those cases where important regional trade links do exist (Russia, Ukraine and Turkey), this seems to be explained first of all by these countries' size rather than by the fact that they are part of the Black Sea region. The outlook for the Black Sea countries is largely positive, with annual GDP growth in excess of 5% in the medium and long run being feasible. Apart from sound economic policies, it is especially the fostering of institutional reforms and the related improvements of the investment climate which will be indispensable for a lasting and sustainable economic development. More decisive steps towards regional and EU economic integration would undoubtedly be beneficial; however, such integration would require significant changes in the stance of regional (and EU) policymakers, a higher level of mutual trust, a solution of 'frozen conflicts', and - last but not least - ultimately hinges on cooperation prospects between Russia and the EU.
    Keywords: comparative study, economic development, foreign trade, integration, macroeconomic analysis
    JEL: O57 O1 F1 F15 E
    Date: 2008–09
  2. By: Catherine Locatelli (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II)
    Abstract: The crisis between Russia and Georgia in August 2008 highlights the fragility and instability of transporting gas from the Caspian and Central Asia to Europe via the "Caucasus transit corridor". The feasibility of one of the EU's possible strategies for diversifying its energy supplies might now be called into question. The aim of this article is to examine the new strategies that could emerge in the producing countries as well as those of international oil companies, and then look at what the consequences might be as far as the EU's diversification strategy is concerned.
    Date: 2008–12
  3. By: J. David Brown; John Earle
    Abstract: We analyze comprehensive manufacturing firm data to measure the contribution of inter-firm employment reallocation to aggregate productivity growth during the socialist and reform periods in six transition economies. Modifying a standard decomposition technique to better reflect the role of firm entry, we find that reallocation rates and productivity contributions are very low under socialism. After reforms, they rise dramatically, and productivity contributions greatly exceed those observed in market economies. Early in transition, faster reform is associated with larger contributions from reallocation, but later, and on average over the whole transition, this relationship is reversed. Though reallocation rates are larger in faster reforming economies, higher productivity dispersion in slower reformers creates much higher productivity gains for a given volume of reallocation. The results imply that reallocation should be viewed as necessary regular maintenance for a well-functioning economy, and particularly large productivity contributions tend to reflect previous neglect more than current virtue.
    Keywords: productivity, reallocation, industry dynamics, entry, exit, creative destruction, reform, transition, Georgia, Hungary, Lithuania, Romania, Russia, Ukraine
    JEL: E32 O47 P23
    Date: 2008
  4. By: Scott Gehlbach (University of Wisconsin, Madison - Department of Political Science); Konstantin Sonin (New Economic School; Center for Economic and Financial Research (CEFIR); Centre for Economic Policy Research (CEPR))
    Abstract: We present a formal model of government control of the media to illuminate variation in media freedom across countries and over time, with particular application to less democratic states. The extent of media freedom depends critically on two variables: the mobilizing character of the government and the size of the advertising market. Media bias is greater and state ownership of the media more likely when the need for mobilization is large; however, the distinction between state and private media is smaller. Large advertising markets reduce media bias in both state and private media, but increase the incentive for the government to nationalize private media. We illustrate these arguments with a case study of media freedom in postcommunist Russia, where media bias has responded to the mobilizing needs of the Kremlin and government control over the media has grown in tandem with the size of the advertising market.
    Keywords: Media, special-interest politics, nondemocratic politics
    JEL: L82 L10 D72
    Date: 2008–12
  5. By: Bogetic, Zeljko; Ulatov, Sergey; Emelyanova, Olga; Smits, Karlis
    Abstract: Russia’s short-term economic growth has accelerated above its long term trend, defying weak global conditions. In 2007, the economy grew by 8.1 percent on the heels of very high (and perhaps unsustainable) oil prices, robust domestic demand and strong macroeconomic fundamentals. Preliminary data indicate an even faster real growth in GDP and industrial production of 8.7 and 6.2 percent in the first quarter of 2008. Rising inflation and capacity and labor utilization, tightening infrastructure constraints, and real wage increases outpacing productivity gains, however, suggest that the economy is overheating, i.e., aggregate demand is outpacing long-term productive capacity of the economy. Reducing inflation and reinvigorating the remaining structural reforms will be key policy challenges for the new Russian government going forward.
    Keywords: Russia; Russian economy; Russia economic developments; Russian health
    JEL: E0 F3 P2 E6 I1 H6
    Date: 2008–06–02
  6. By: Zeljko, Bogetic; Karlis , Smits; Sergey , Ulatov; Olga, Emelyanova; Marco , Hernandez
    Abstract: After a decade of high growth, the Russian econoomy is experiencing a slowdown in the wake of the global financial crisis. While Russia's strong short-term macroeconomic fundamentals make it better than many emerging economies to deal with the crisis, its underlying structural weaknesses and high dependence on the price of a single commodity make its impact more pronounced than otherwise. But the crisis also presents an opportunity to address the medium- to longer term challenges of competitiveness, economic diversification, and financial sector modernization which are necessary to boost growth and living standards.
    Keywords: Russia; Russian economy; Russian financial crisis; energy efficiency
    JEL: P2 B22 A10 Q4 E2 F3 E5 F41 G21
    Date: 2008–11–18

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