nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2017‒11‒19
25 papers chosen by

  1. The Determinants of the Development of the Russian Assistive Technologies Market in the Context of the Interaction of Various Groups of Agents By Alina Pishnyak; Aleksandra Goriainova; Elena Tochilina
  2. Russia’s Crony Capitalism: Stagnant But Stable By Anders Aslund
  3. What Makes Youth Become NEET? The Evidence from Russian LFS By Anna Zudina
  4. Religious Issues in Russian Schools: Legal View By Nadezhda Knyaginina; Szymon Jankiewicz
  5. CESEE Back on Track to Convergence By Vasily Astrov; Rumen Dobrinsky; Vladimir Gligorov; Richard Grieveson; Doris Hanzl-Weiss; Peter Havlik; Gabor Hunya; Sebastian Leitner; Isilda Mara; Olga Pindyuk; Leon Podkaminer; Sandor Richter; Hermine Vidovic
  6. Jolly Drunkards on the Banks of the Neva: Duke De Liria and an Early Episode in the History of Fraternal Societies in Russia By Igor Fedyukin; Robert Collis; Ernest A. Zitser
  7. Who Benefits from Fiscal Redistribution in the Russian Federation? By Luis F. Lopez-Calva; Nora Lustig; Mikhail Matytsin; Daria Popova
  8. Сообщество экономистов и экономические журналы (социологические измерения VS библиометрии). Научный доклад By Рубинштейн Александр Яковлевич; Бураков Н. А.; Славинская О. А.
  9. Некоторые аспекты экономической теории государства. Научный доклад By Рубинштейн Александр Яковлевич; Городецкий Андрей Евгеньевич
  10. Multinationality-Performance Relationship in Russian MNEs: The Moderating Effect of Contingencies By Veselova, Anna S.; Dikova, Desislava; Kazantcev, Anatoly K.
  11. Теория опекаемых благ и патернализм в экономических теориях: общее и особенное By Рубинштейн Александр Яковлевич
  12. Challenges of DCFTAs: How can Georgia, Moldova and Ukraine succeed? By Amat Adarov; Peter Havlik
  13. Элементы общей теории изъянов смешанной экономики By Рубинштейн Александр Яковлевич
  14. Nonlinear Exchange Rate Pass-Through to Domestic Prices in Ukraine By Oleksandr Fàrynà
  15. Studying “Sponsored Goods” in Cultural Sector. Econometric Model of Baumol’s Disease By Рубинштейн Александр Яковлевич
  16. The cost of sanctions: Estimating lost trade with gravity By Hinz, Julian
  17. Monthly Report No. 5/2017 By Vasily Astrov; Sebastian Leitner; Isilda Mara; Sandor Richter
  18. Методологический анализ теории опекаемых благ: Научный доклад By Рубинштейн Александр Яковлевич
  19. Toothless reforms? The remarkable stability of female labor force participation in a top-reforming country By Norberto Pignatti; Karine Torosyan; Maka Chitanava
  20. Measuring Food Price Volatility in Georgia By Salome Gelashvili; Phatima Mamardashvili
  21. Employment Discrimination in Georgia: Evidence from a Field Experiment By Muhammad Asali; Norberto Pignatti; Sophiko Skhirtladze
  22. The Trubetskoi Circle: Aristocratic Petit-Maitres in Mod-Eighteenth Century St Petersburg By Igor Fedyukin
  23. The Distributional Impact of Fiscal Policy in Georgia By Cesar Cancho; Elena Bondarenko
  24. Millionenstrafe für Russlands Doping-Politik? Eine Milliarden-Strafe wäre richtiger! By Helmut Grothe; Wolfgang Maennig
  25. An Impact Evaluation of Mass Replacement of School Principals in Georgia By Zurab Abramishvili

  1. By: Alina Pishnyak (National Research University Higher School of Economics); Aleksandra Goriainova (National Research University Higher School of Economics); Elena Tochilina (National Research University Higher School of Economics)
    Abstract: This study identifies the key determinants of the development of the assistive technologies market in Russia and the trends that are expected to determine the dynamics of the Russian market over the next 10-15 years. Based on an analysis of international research experience and data obtained from in-depth interviews with Russian experts in areas associated with assistive technologies and devices (ATD, or technical rehabilitation aids (TRA)) (such as the manufacturers of assistive devices, representatives of the Federal Bureau of Medical and Social Expertise, representatives of disabled people's organizations and policy makers dealing with the issues related to the social support of disabled people), the key determinants of the market have been classified into demographic, economic, political, social, technological, and infrastructural. The study of the determinants and trends is implemented in the context of their impact on the supply and demand for ATD, taking into account the fact that for various groups of the population demands are determined by different needs (from the desire for social inclusion to the desire to be independent) and the fact that supply of different types of assistive devices may be affected by various groups of factors. The interaction of various agents operating in the ATD market in Russia is analyzed within the theoretical framework of Porter's five forces
    Keywords: assistive technologies and devices, technical rehabilitation aids, disabled persons, disabilities, technological advances, social policy.
    JEL: I18
    Date: 2017
  2. By: Anders Aslund
    Abstract: A conundrum this paper aims to explain is how Russia, a country that pursues such rigorous and conservative macroeconomic policies can be so tolerant of state and crony capitalism. The key issue is what Putin’s economic model amounts to, which is being presented already in section one. Section two reviews Russia’s recent economic performance, while the three ensuing sections examine three key aspects of the Russian economy, namely the eminent macroeconomic policy, the role of energy, and the impact of the Western sanctions since 2014. The final section attempts to answer the likelihood of serious market reforms.
    Keywords: Russia, crony capitalism, corruption, macroeconomic policy, economic growth, gas and oil
    JEL: D72 D73 E01 E60 E65 H63 P48 Q43
    Date: 2017–09
  3. By: Anna Zudina (National Research University Higher School of Economics)
    Abstract: This article addresses the issue of socio-demographic factors of becoming NEET, i.e. dropping out of employment, education or training for individuals aged 15-24. Empirical analysis was based on the micro-data of Russian Labour Force Survey (LFS) by Federal State Statistics Service for 1995-2015. The paper introduces the results of the analysis of the impact of education on NEET status, which were conducted for Russia on the basis of regression estimations for the first time. Contrary to previous studies, higher education doesn’t provide a universal ”safety net” from NEET status for all young people. NEET-unemployed youth in Russia mainly have tertiary education of one level or another, while NEET inactivity is concentrated among those who have only primary education and the size of the effect becomes even more pronounced for rural residents and females
    Keywords: youth labour market, NEET, LFS, youth unemployment,
    JEL: J13 J21 J24 Z13
    Date: 2017
  4. By: Nadezhda Knyaginina (National Research University Higher School of Economics); Szymon Jankiewicz (National Research University Higher School of Economics)
    Abstract: In different countries of the world the place of religion in education differs. In most of the European countries teaching of religion in public (or state-funded) school exists in one form or another. In Russia religious education can be received by the student at his or her own discretion or at discretion of the parents in the religious educational establishment. Education in public (state and municipal) organizations engaged in educational activity has a strictly secular nature. This principle is implemented in the Russian legislation and practice is most visible in disputes arising at the crossroad of religion and education as resolved by Russian courts. The most disputed issues concern the regulation of school uniform and the teaching of subjects ‘Fundamentals of Religious cultures and secular ethics’ and ‘Fundamentals of spiritual and moral culture of Russian nations’ as a compulsory subject in public schools. The court practice on the issue keeps developing, but it's analysis shows that the secular nature of education in Russia is not so undoubted as it may seem
    Keywords: education, secular character, religion, religious education, school uniform, Russia
    JEL: K30
    Date: 2017
  5. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw); Vladimir Gligorov (The Vienna Institute for International Economic Studies, wiiw); Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Isilda Mara (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw); Sandor Richter (The Vienna Institute for International Economic Studies, wiiw); Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: GDP forecasts for 2017 have been revised upwards for all Central and East European EU Member States (EU-CEE). Farther east, especially in Russia, but also in the Western Balkans, the post-crisis recovery has been much weaker. Private consumption is the main growth driver, underpinned by rising wages and household incomes. Nonetheless, CESEE labour cost competitiveness is not yet endangered. Gradually, along with expanding private consumption, investments have also gained strength and have increasingly emerged as a driver of growth. Trade balances have improved, and many EU-CEE countries (as well as Russia) also report current account surpluses. Growth is thus becoming broader based, more robust, and probably also more sustainable. Improvements in labour markets are spectacular, with rising employment levels mirrored by declining unemployment. Simultaneously, emerging labour shortages are acting as a potential constraint on future growth. In terms of current GDP growth prospects, the CESEE region is split into three sub-regions the EU-CEE, with average annual growth close to 4% in the forecasting period; the Western Balkans, with GDP growing by around 3% per year; and finally, the Commonwealth of Independent States (CIS) and Ukraine, where growth will be around 2% annually in the medium term. The EU-CEE region is thus catching up again with Western Europe, and the process of economic convergence has resumed at a greater pace than previously expected. This catching-up process will continue probably for the rest of the decade. Importantly, economic convergence is not expected to resume in Russia, where the lack of structural change, lasting investment climate deficiencies and geopolitical conflicts impose a burden on growth. Meagre growth in Russia adversely affects the growth prospects of her CIS partners. But there are several other CESEE countries where recent political developments are not very conducive to growth and European integration in the medium term. However, for the moment, economic growth seems to be unaffected by domestic political instability. Globally, economic resilience persists, regardless of the elevated geopolitical risks. The Forecast Report also includes three special topics (on income convergence with Western Europe, on euro accession and on higher yields on hard currency sovereign debt in CESEE). The key findings of these reports are Convergence in terms of per capita GDP levels in CESEE is a long-term process; by 2050, most of the region will only have bridged half the current gap with the EU-28 level; during the next decade, no country in the region will catch up with average EU-28 wealth levels, and advanced EU-CEE countries like Poland and Hungary will not even reach the 80% mark. Despite sustained criticism since its inception, the euro may yet survive and attract new members in the EU-CEE; it is in the interests of Croatia and Bulgaria to join, and is potentially advantageous for Hungary and Poland; the case is less clear cut for the Czech Republic and Romania, although in neither case would accession be harmful. Many CESEE sovereigns are not in a markedly better shape to deal with a sharp rise in debt yields than they were 10 years ago, and in some cases they are in a worse position; for countries with heavy debt loads and little apparent prospect of achieving high and sustained growth, bond markets could panic, leading to funding difficulties; Ukraine stands out as particularly vulnerable from a sovereign risk perspective, while we conclude that Belarus and many countries in the Western Balkans are also in a weak position.
    Keywords: CESEE, economic forecast, Europe, Central and Eastern Europe, Southeast Europe, Western Balkans, new EU Member States, CIS, Belarus, Russia, Ukraine, Kazakhstan, Turkey, growth convergence, political uncertainties, external risks, EU funds, investment, consumption-led growth, unemployment, employment, wage growth, inflation, competitiveness, industrial production
    JEL: E20 O47 O52 O57 P24 P27 P33 P52
    Date: 2017–11
  6. By: Igor Fedyukin (National Research University Higher School of Economics); Robert Collis (National Research University Higher School of Economics); Ernest A. Zitser (National Research University Higher School of Economics)
    Abstract: This paper reconstructs the origins and the meaning of the “Most Illustrious and Incomparable Order of Antisobres,” that was to be instituted in 1728 in St Petersburg by Duke de Liria, the Spanish ambassador. While this unusual fraternal society might have never taken off the ground and remained on paper only, this episode serves as an important missing link, bridging the Petrine and immediately post-Petrine forms of sociability, on the one hand, and both their contemporary Western European analogues and later Russian formats of socializing, on the other. The article also demonstrates how such formats of fraternizing were central for international diplomacy of the era. Insofar as Duke de Liria was a prominent Jacobite, this microstudy also contributes to the early history proto-masonic societies in which Jacobites were important players
    Keywords: Peter I, Fraternal Orders, Sociability, Drinking, Masons, Jacobites
    JEL: Z
    Date: 2017
  7. By: Luis F. Lopez-Calva (World Bank); Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University, Commitment to Equity Institute (CEQI).); Mikhail Matytsin (World Bank); Daria Popova (World Bank)
    Abstract: This paper shows that the system of taxes and transfers in Russia has a limited redistributive capacity vertically (among different income groups)—particularly when pensions are assumed to be deferred income—though it does achieve significant horizontal redistribution (among sociodemographic groups). The main results of the analysis, concern the Russian fiscal system’s limited redistributive effect,low effectiveness in poverty reduction, and relatively poor net financial impact on all demographic groups except pensioners. Firstly, benchmarking shows that the Russian system of direct taxes and transfers does not compare well with countries that achieve larger redistribution, in particular European Union countries. Secondly,net direct taxes (incorporated into disposable income) are always equalizing, but net indirect taxes (incorporated into consumable income) are unequalizing in both the benchmark and the sensitivity analysis scenarios. Thirdly, under the benchmark scenario, the net effect of the fiscal system is actually poverty increasing. Finally, it appears that all households of working-age people with and without children are net payers under the Russian fiscal system, while only pensioners’ households benefit from the fiscal redistribution in Russia under both scenarios. The main conclusion that emerges from this analysis is that there are both equity and efficiency reasons to review the tax and social spending structure. Such an exercise may require, however, a good understanding of the political economy of a potential reform.
    Keywords: fiscal policy, fiscal incidence, social spending, inequality, poverty, taxes, Russia
    JEL: H22 I38 D31
    Date: 2017–05
  8. By: Рубинштейн Александр Яковлевич; Бураков Н. А.; Славинская О. А.
    Abstract: Доклад является первой частью проекта «Стратификация научного сообщества экономистов и ранжирование экономических журналов», разрабатываемого временным научным коллективом ИЭ РАН и НИУ ВШЭ под эгидой Новой экономической ассоциации. В работе представлены результаты социологического опроса представителей научного сообщества экономистов, выявлена его структура и доказано отсутствие статистически значимой связи между библиометрическими показателями РИНЦ и оценками журналов, полученными на основе измерения общественного мнения. Предложен новый универсальный, алгоритм определения рейтинга анализируемых изданий. Главным итогом выполненного исследования является методологическое и инструментальное обоснование ранжирования российских экономических журналов и выделение на его основе пяти категорий периодических изданий. This report is the first part of the project «Stratification of the scientific community of economists and the ranking of economic journals», developed by the time research team of the IE RAS and the HSE under the aegis of the New Economic Association. The paper presents the results of a sociological survey of representatives of the scientific community of economists, identifies its structure and proves the absence of a statistically significant link between the bibliometric indicators of the RICC and the estimates of journals obtained on the basis of measuring public opinion. A fundamentally new, universal algorithm for determining the rating of the analyzed publications is proposed. The main result of the research is the methodological and instrumental justification for the ranking of Russian economic journals and the allocation on its basis of five categories of periodicals.
    Keywords: economic community, economic journals, magazine ratings, ranking of journals, bibliometric indicators, sociological survey, expert assessments, multidimensional statistical analysis, journal clusters
  9. By: Рубинштейн Александр Яковлевич; Городецкий Андрей Евгеньевич
    Abstract: Настоящий доклад следует рассматривать в качестве введения в новую тему исследований в научном направлении ИЭ РАН «Теоретическая экономика». Его содержание представляет собой описание авторского подхода к построению экономической теории современного государства, важными составляющими которой являются теория опекаемых благ и общая концепция изъянов смешанной экономики. Указанный подход лег в основу анализа патернализма, позволил выйти за пределы привычной для этой категории «отцовской заботы» государства о своих гражданах и предложить более общую трактовку данного понятия. Наряду с институциональным, распределительным и поведенческим провалами в работе описан особый вид изъянов смешанной экономики – «патерналистский провал», представляющий комбинацию изъянов общественного выбора и нерациональных действий госслужащих. Выделены четыре типа нерациональности бюрократии: дилетантизм, «эффект кассира», закон Паркинсона и своекорыстие чиновников. В докладе рассмотрены также теоретические и прикладные аспекты концепции консенсусной демократии, обеспечивающей либерализацию процессов принятия политических и экономических решений на основе институтов гражданского общества и гражданского контроля над деятельностью органов исполнительной власти. The present report should be considered as an introduction to a new theme of research in the scientific direction of the IE of the RAS (The Institute of Economics of the Russian Academy of Sciences) called “The Theoretical Economics”. Its content represents a description of the author’s approach to the construction of the economic theory of the modern state, the important components of which are the theory of patronized goods and the general concept of flaws of the mixed economy. The specified approach formed the basis of the analysis of paternalism, it allowed to go beyond the usual, the habitual for this category “paternal care” of the state about its citizens and to offer a more general interpretation of the given concept. Along with institutional, distributive and behavioral lailures, a special type of flaws of the mixed economy is described in the paper – it is a “paternalistic failure” that represents a combination of flaws of public choice and irrational actions of civil servants. Four types of irrationality of bureaucracy are highlighted, are singled out: these are dilettantism, the “cashier effect”, the law of Parkinson and the self-interest of bureaucrats. The report also examines the theoretical and applied aspects of the concept of consensus democracy, ensuring the liberalization of the processes of political and economic decision-making on the basis of the institutions of civil society and civil control over the activities of executive bodies.
    Keywords: patronized goods, meritorious goods, market failures, paternalism, failures of the state, managerial failure, bureaucracy, failure of “goodwill”, consensus democracy, institutions, civil society
    JEL: C70 C72 D5 D6 D7 H41
  10. By: Veselova, Anna S.; Dikova, Desislava; Kazantcev, Anatoly K.
    Abstract: We use CassonÙ³ (1999) concept of (increasing) transaction and information costs adding to organizational complexity and expenditures, to arrive at an S-shaped relationship between degree of internationalization (DOI) and performance. To capture contextual complexity, we consider critical boundary conditions for the relationship DOIperformance of Russian firms, namely 1) the impact of environmental uncertainty, 2) firmlevel characteristics such as firm size and innovativeness and 3) the generic strategy followed by the Russian MNEs. We use a sample of 213 predominantly private and mature Russian MNEs. Our results show support for hypothesized S-shaped relationship; this relationship is conditional on the Russian firmsÙ degree of innovativeness and differentiation strategy. Environmental dynamics and firm size affect performance of internationalizing Russian firms to a lesser extent.
    Keywords: degree of internationalization, organizational complexity, expenditures, Russian MNCs, S-shape relationships, performance, environmental dynamics, firm size,
    Date: 2016
  11. By: Рубинштейн Александр Яковлевич
    Abstract: Работа посвящена сравнительному методологическому анализу теории общественных и мериторных товаров, концепции либертарианского патернализма и теории опекаемых благ. В ней обсуждаются некоторые модификации двух принципов – методологического субъективизма и методологического индивидуализма, составляющих основу ряда теорий, обосновывающих государственную активность. Выполненный анализ основных предпосылок позволил автору предположить, что, с точки зрения методологии эти теоретические построения являются частными случаями теории опекаемых благ, фундамент которой составляют «методологический субъективизм», «методологический релятивизм», обусловливающие природу нормативных интересов. Рассматриваются институциональные и политологические аспекты формирования этих интересов общества «sui generis», в основе которых лежат «коллективные решения», и сформулирован общий принцип политической конкуренции в виде еще одной предпосылки – необходимость создания институтов, ограничивающих «диктатуру» парламентского большинства. В последней главе представлены примеры конкретных институтов такого рода. The work is devoted to a comparative methodological analysis of the Theory of Public and Meritory Goods, to the Concept of Libertarian Paternalism and to the Theory of Patronized Goods. It discusses some modifications of the two principles, which are as follows: the methodological subjectivism and the methodological individualism, that constitute the basis of a number of theories, substantiating the state activity. The executed analysis of the main prerequisites allowed the author to assume that, in terms of methodology, these theoretical constructs are the special cases of the Theory of Patronized Goods, which make up the foundation of «the methodological subjectivism», "the methodological relativism", stipulating the nature of regulatory interests. The final part of the study discusses the institutional and political science aspects of the formation of these public interests called «sui generis», which are based on «the collective decisions», and the general principle of political competition is formulated in the form of yet another premise – that is about the need to establish the institutions that limit the «the dictatorship» of the parliamentary majority . The annex to the main text provides the examples of specific institutions of this kind.
    Keywords: patronized goods, public goods, meritorics, libertarian paternalism, methodological subjectivism, methodological individualism. methodological relativism, regulatory interests, political competition, institutions
    JEL: C70 C72 D5 D6 D7 H41
  12. By: Amat Adarov (The Vienna Institute for International Economic Studies, wiiw); Peter Havlik (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The imbalance between the costs and benefits of DCFTAs is a call to the EU to display greater thoughtfulness and pragmatism if it does not want to lose support for reforms in its neighbourhood. What has to happen so that their potential can be more beneficial? The Policy Brief written by Amat Adarov and Peter Havlik in cooperation with Bertelsmann Stiftung discusses the policy implications of the agreements.
    Keywords: DCFTA; Association Agreement; EU Neighbourhood Policy; Georgia, Moldova, Ukraine; economic integration; policy impact evaluation
    Date: 2017–06
  13. By: Рубинштейн Александр Яковлевич
    Abstract: В контексте исследования природы и эволюции патернализма, одного из элементов теории опекаемых благ, представлен новый взгляд на провалы смешанной экономики и предложена их классификация. Стандартные провалы – наличие монополии, экстерналий информационной асимметрии и т.п., – дополнены «поведенческим провалом». Согласно предложенной теории, данный вид провала смешанной экономики обусловлен иррациональными действиями индивидуумов, выбирающих такой вариант поведения, который в соответствии с предпочтениями «патера» не обеспечивает максимизацию их благосостояния. Указанный подход лег в основу анализа патернализма и позволил выйти за пределы привычной для этой категории «отцовской заботы» государства о своих гражданах и предложить более общую трактовку данного понятия. В работе представлен и особый вид изъянов смешанной экономики – «патерналистский провал» и содержится анализ порождающих его механизмов формирования патерналистских установок государства и некоммерческих организаций. Рассмотрены теоретические и прикладные аспекты концепции консоциативной демократии, обеспечивающей либерализацию процессов принятия политических и экономических решений на основе развития институтов гражданского общества и гражданской активности, направленной на снижение рисков «провалов государства» и потери благосостояния. The article presents a new view of mixed economy failures and their classification in context of researching the nature and evolution of paternalism – one of the elements of the “patronized goods” theory. “Behavioral failures” add up to standard failures such as monopolies, information asymmetry externals etc. According to the theory this kind of the mixed economy failure is caused by irrational acts of individuals who choose the kind of behavior which matching the “pater’s” preferences does not maximize their wellbeing. The analysis of “paternalism” is based on the approach mentioned above that made it possible to leave the habitual for this category “paternal care” of the state about its citizens and offer a more generalized interpretation of the notion. The article points to a special kind of defects of the mixed economy-“paternalistic failure” and analyzes the mechanisms of forming state paternalistic directives that cause the failure. Theoretical and applied aspects of the concept of consociational democracy are considered in the article. The concept provides for process liberalization of making political and economic decisions on the basis of developing civil society institutions and citizens’ activity, aimed at reducing risks of “state failures” and wellbeing losses.
    Keywords: patronized goods; merit goods; market failures; paternalism; State activity; State failures; consociationalism; institutions of civil society
  14. By: Oleksandr Fàrynà (Monetary Policy and Economic Analysis Department, National Bank of Ukraine)
    Abstract: This paper aims to estimate the degree of exchange rate pass-through (ERPT) to domestic prices in Ukraine considering nonlinearities with respect to the size and direction of exchange rate movements, inflation environment, and business cycles. We use disaggregated consumer price data and employ a panel autoregressive distributed lag model including threshold parameters to account for nonlinearities in the ERPT mechanism. Estimation results suggest that the pass-through effect is higher from currency depreciation than in the case of appreciation for most price groups. We also find that price responsiveness to small, medium, and large exchange rate changes is nonlinear. In particular, we provide evidence that prices are sensitive to small changes, but the pass-through effect is insignificant if exchange rate movements are moderate. Furthermore, the degree of ERPT is higher in periods of extremely large depreciations, high inflationary environment, and economic slumps.
    Keywords: Exchange rate pass-through, inflation, Ukraine, nonlinear ERPT, Autoregressive Distributed Lag model
    JEL: E31 E52 E58 F31
    Date: 2016–12
  15. By: Рубинштейн Александр Яковлевич
    Abstract: The paper presents the second part of the study of “sponsored goods” in the cultural sector. It describes economic activities of theaters, concert organizations and museums in three dimensional index space coordinate axes being the lag of labor productivity, faster growth of salaries and tickets prices in relation to the corresponding macroeconomic indices. The methodology of constructing such indexes and statistical data used for this purpose are described in the first article published under the title “Symptoms and consequences of Baumol's cost disease in cultural sector: an econometric study of “sponsored goods”. The aim of the present article is to construct and analyse econometric model of cost disease based on statistical data on activities of Russian theaters, concert organizations and museums for the period of 1994-2010. The regression analysis based on structural model that reflects theoretically predictable links was chosen as a method of study. Such links include first, influence on cost growth of lag of labour productivity in arts organisations and parallel trend in salaries. Second, dependence of increase of income of such organizations on dynamics of labour productivity and ticket prices, third, balanced equation - product of equilibrium conditions for sponsored goods that describes the interrelation between costs of production, prices and budget subsidies. The calculations made it possible to construct basic and modified econometric models that establish statistical correlations between income deficit and three regressors, namely indexes of labour productivity, salaries and ticket prices. As a result of this model the article presents projections of regression relation of income deficit on «expenditures plane», «income plane» and «economic results plane». Theequations derived allow to conclude that there is a statistically significant income deficit negative elasticity by labour productivity index, positive elasticity by salaries index and ticket price index, as well as rising dynamics of Russian performing arts organization income deficit and its compensation in the nearest future.
    Keywords: "sponsored goods", "cost disease", Baumol’s indexes, econometric models, income deficit
    JEL: C43 L38 Z1 Z11
  16. By: Hinz, Julian
    Abstract: Economic sanctions are a frequently used tool of foreign policy. Constraining trade flows towards or from the target country is supposed to coerce its government into changing certain policies. However, sanctions constitute an obstacle to trade, thereby affecting flows of all countries, including those of sanctioning countries themselves. I gauge the global impact of three recent sanctions regimes using a structural gravity framework and quantify the "lost trade" in a general equilibrium counterfactual exercise. Each of the episodes, sanctions against Iran, Russia and Myanmar, are instructive in their own way, due to the different nature of bilateral trade and severity of measures applied.
    Keywords: sanctions,embargo,General equilibrium counterfactuals,foreign policy
    JEL: F51 F14 F13 F52
    Date: 2017
  17. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Isilda Mara (The Vienna Institute for International Economic Studies, wiiw); Sandor Richter (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Graph of the month ‘Happiness’ in the EU-15, EU-CEE and West Balkan countries, 2010-2016 (p. 1) Opinion corner What are the likely consequences of the economic blockade of the separatist-controlled areas of Donbas? (by Vasily Astrov; pp. 2-4) Unequally wealthy but equally happy is there an explanation? (by Isilda Mara; pp. 5-11) Wealth of private households in the EU countries (by Sebastian Leitner; pp. 12-16) Intra-regional trade after EU accession the case of the three Baltic states (by Sándor Richter; pp. 17-21) Recommended reading (p. 22) Statistical Annex Monthly and quarterly statistics for Central, East and Southeast Europe (pp. 23‑44)
    Keywords: happiness score, trade blockade, macroeconomic impact, investment climate, happiness, GDP per capita, geographical location, gross wealth, net wealth, wealth distribution, international trade, integration, commodity patterns of trade
    Date: 2017–05
  18. By: Рубинштейн Александр Яковлевич
    Abstract: В работе рассмотрены некоторые модификации двух принципов австрийской школы – методологического субъективизма и методологического индивидуализма, а также стандартной аксиомы гомогенности экономических агентов, составляющие основу ряда теорий, обосновывающих государственную активность. Анализ основных предпосылок теории общественных и мериторных благ, концепции либертарианского патернализма позволил автору предположить, что с точки зрения методологии эти теоретические построения являются частными случаями теории опекаемых благ, фундамент которой составляют методологический субъективизм», «методологический релятивизм и принцип гетерогенности. The present research work is dedicated to the methodological aspects of the Theory of Patronized Goods. In this work some modifications of two principles of the Austrian school had been considered and examined and these principles are as follows: “the methodological subjectivism” and “the methodological individualism”, as well as the modification of the standard axiom of “the homogeneity of economic agents”, which comprise the basis of a number of theories, substantiating the state activity. In the same context the paper presents an analysis of the Theory of Patronized Goods, which constitutes the foundation of methodological subjectivism, methodological relativism and the principle of heterogeneity.
    Keywords: patronized goods, public goods, meritorics, libertarian paternalism, methodological subjectivism, methodological relativism, heterogeneity, normative interests, civil society, Institute of budget allocations
    JEL: C70 C72 D5 D6 D7 H41
  19. By: Norberto Pignatti (International School of Economics at Tbilisi State University, Tbilisi; IZA, Bonn); Karine Torosyan (International School of Economics at Tbilisi State University, Tbilisi); Maka Chitanava (ISET Policy Institute)
    Abstract: Low Female Labor Force Participation (FLFP) constitutes a foregone opportunity at both the macro and at the micro levels, potentially increasing the vulnerability of households and lowering the long-run development perspectives of a country. Most international organizations and national policy makers see low FLFP as a serious issue that needs to be addressed by adopting appropriate policies. We investigate the possible reasons of the remarkable stability of FLFP in a top-reforming upper-middle income country. Our goal is to disentangle the different forces at work and to draw useful lessons for the design of participation-enhancing policies. Using data from a nationally representative Household Survey covering the period 2003-2015, we employ Blinder-Oaxaca (Blinder, 1973 and Oaxaca, 1973) type decomposition to decompose changes over time in FLFP levels into parts that are due to changes in observable factors versus changes in the strength of impact of these factors.
    Keywords: Employment, Female Labor Force Participation, Labor Market, Public Policy, Reforms, Former Soviet Union, Georgia
    Date: 2017
  20. By: Salome Gelashvili (International School of Economics at Tbilisi State University, Tbilisi); Phatima Mamardashvili (International School of Economics at Tbilisi State University, Tbilisi)
    Abstract: Food price volatility is an important determinant of access to food. Given Georgia’s low selfsufficiency ratio (34%) and its dependence on international markets, Georgia has few mechanisms to control food price volatility, particularly when it is driven by international market conditions. The goal of this paper is to measure the price volatility of wheat, potato and maize flour in Georgia, and define major drivers of volatility through a time series analysis of retail prices of those three food products, which account for a significant share of households’ spending on food. Results of the analysis are expected to contribute to Georgia’s policy on food security, as well as agricultural policy in general.
    Keywords: Price volatility, time series analysis
    Date: 2017
  21. By: Muhammad Asali (International School of Economics at Tbilisi State University, Tbilisi;); Norberto Pignatti (International School of Economics at Tbilisi State University, Tbilisi; IZA, Bonn); Sophiko Skhirtladze (ISET Policy Institute)
    Abstract: We provide experimental evidence about ethnic discrimination in the labor market in Georgia. We randomly assign Georgian and non-Georgian, male and female, names to similar resumes and apply for jobs as advertised in help-wanted web sites in Georgia. We find that gender has no effect on the probability of callback, but a job applicant who is ethnic Georgian is twice more likely to be called for a job interview than an equally skilled ethnic non-Georgian (Azeri or Armenian). The almost 100% gap in callbacks is statistically significant and cannot be abridged by having more experience or education. Both taste-based discrimination and statistical discrimination models are consistent with the evidence provided in this study. Labor market discrimination tends to aggravate in economic busts.
    Date: 2017
  22. By: Igor Fedyukin (National Research University Higher School of Economics)
    Abstract: This paper is an attempt to reconstruct the social and cultural life of young aristocrats in mid-eighteenth century St Petersburg by focusing on one aristocratic circle, one that revolved around Prince Nikita Trubetskoi, the procurator-general. In particular it traces the ways on which sociable behavior and libertine practices intertwined with early traces of “Enlightenment,” affective turn, and discoursing on imporartnt societal issues such as the rules of noble service and the status of the nobility.
    Keywords: Russia, nobility, service, affective turn, Elizabeth, sociability, libertines
    JEL: Z
    Date: 2017
  23. By: Cesar Cancho (Poverty & Equity Global Practice at the World Bank); Elena Bondarenko (Macroeconomics & Fiscal Management Global Practice at the World Bank)
    Abstract: This paper uses the 2013 Integrated Household Survey, collected by the Central Statistical Agency of Georgia (GeoStat), and data concerning government revenues and expenditures collected by the Ministry of Finance (MoF) along with other administrative agencies, and applies the CEQ methodology to analyze the progressivity of Georgia’s tax and transfer systems. The effects of a variety of policies are individually described, including personal income tax (PIT), value added tax (VAT) and excise tax. In addition, this paper assesses direct and in-kind transfers made by the Georgian government. The distributional effect of indirect subsidies, which are confined to the capital city, Tbilisi, are also considered, as well as the Agricultural Card program. The results show a stark difference between direct and indirect taxation. Direct taxes are progressive, and income tax is largely borne by high-income deciles. Meanwhile, the burden of indirect taxation is more evenly distributed, with the poor losing a higher percentage of income. Thus, the tax system is regressive. Overall, fiscal policy is progressive and equalizing, even before in-kind transfers for early education, and the Medical Insurance for the Poor (MIP), and Universal Health Care (UHC) programs are taken into account. The Targeted Social Assistance Program (TSA) and old-age pensions play a significantly pro-poor role. Fiscal incidence reduces poverty (under $2.50 USD’s per day) over 9 percentage points, the largest drop in poverty amongst the countries where CEQ analysis was performed. This paper concludes that excise taxes should be reassigned or eliminated to reduce regressivity, while PIT and the property tax could be broadened, which would expand the tax base.
    Keywords: fiscal incidence, taxation, social spending, inequality, poverty, Georgia
    JEL: H22 D31 I38
    Date: 2017–05
  24. By: Helmut Grothe (Department of Law, Freie Universität Berlin); Wolfgang Maennig (Chair for Economic Policy, University of Hamburg)
  25. By: Zurab Abramishvili (International School of Economics at Tbilisi State University, Tbilisi)
    Abstract: This paper investigates how a unique education policy positively affected university enrollment rates of public school students in Georgia. In 2007, the Georgian government enacted legislation mandating the replacement of all public school principals under the assumption that the replacement of the principals with randomly assigning qualified candidates to public schools would fairly decentralize and improve school governance across Georgia. About half of public school principals were actually replaced with new candidates and a majority of them were assigned through a random allocation mechanism. Therefore, the standard difference-indifferences methodology is used to compare treated public schools with private schools that are not affected by the policy in order to identify how this reform impacted education outcomes. Using the National Assessment and Examination Center university admissions data, the public schools with replaced principals increased university enrollment more than the control schools by an average of 4%. The largest part of this increase comes from schools with randomly assigned principals. The positive findings herein could tenably impact education policy in developing (and perhaps developed) countries and elicits further research where applicable. The statistically significant and strong effects of this type of reform could cause a positive domino effect in the developing world, especially in countries with similar characteristics and predicaments in their education system.
    Keywords: School principals, university enrollment rate, education reform, random assignment
    Date: 2017

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