nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2018‒06‒11
ten papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Integration of the Second Generation of Migrants Aged 18-30 in Russia: The Results of the Pilot Survey By Varshaver, Evgeniy; Rocheva, Anna; Ivanova, Nataliya
  2. Just Like A Woman? New Comparative Evidence on the Gender Income Gap across Eastern Europe and Central Asia By Blunch, Niels-Hugo
  3. Development of Mechanisms for Increasing the Accessibility of the Electric Grid Infrastructure on the Basis of the Formation of a System of Mutual Responsibility of Consumers and Electric Grid Companies By Suyunchev, Marat; Mozgovaya, Olga; Fain, Boris
  4. Development of Methodology for Stimulating Tariff Regulation of Distribution Electric Grid Companies Based on Benchmarking of Unit Cost of Services By Suyunchev, Marat; Repetyuk, Sergei; Temnaya, Olga
  5. On the fairness and the redistributive effects of PIT in Central and Eastern European countries By Stoian, Andreea; Vintila, Nicoleta; Tatu, Lucian; Miricescu, Emilian
  6. Regional Development Policies of Korea and Policy Suggestions for Azerbaijan By Yusifov, Sabuhi
  7. The challenge of improving efficiency of Soum Health Centers in Mongolia By Martine AUDIBERT; Marlène GUILLON; Jacky MATHONNAT
  8. Analysis of the “Dutch Disease” effect and public financial management: the case of Mongolia By Taguchi, Hiroyuki
  9. Probabilistic forecasts for the 2018 FIFA World Cup based on the bookmaker consensus model By Achim Zeileis; Christoph Leitner; Kurt Hornik
  10. Declines due to Disinvestment By Gabor Hunya; Monika Schwarzhappel

  1. By: Varshaver, Evgeniy (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Rocheva, Anna (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Ivanova, Nataliya (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: This paper presents results of a pilot survey of second generation migrants aged 18-30 in Russia which was conducted online with targeting via social networking sites. Second generation migrants are those who were born or spent at least several school years in Russia and who had at least one parent who was a migrant. This research focuses on the second generation of Armenian and Azerbaijani migrants. The analysis of the survey results (N=302) the paper outlines integration characteristics of this group in the four dimensions: structural, cultural, social and identificational integration. Comparison of the socio-economic characteristics of the second generation migrants with the Russian youth (data of FOM and RLMS) shows that first group is more successful than the second one having higher levels of education and earnings. Second generation migrants have ethnically mixed social ties but stick to the monoethnic marriages. Armenian and Azerbaijani self-identification prevails but does not conflict with the Russian one as well as with the thesis that Russia is the home.
    Date: 2018–05
  2. By: Blunch, Niels-Hugo
    Abstract: I examine the incidence and determinants of the gender income gap in Kazakhstan, Macedonia, Moldova, Serbia, Tajikistan, and Ukraine using recent household data based on an identical survey instrument across countries. Four main results are established, using a range of estimators, including OLS, interval regression, and quantile regression: (1) the presence of a substantively large gender income gap (favoring males) in all six countries; (2) some evidence of a gender-related glass ceiling in some of these countries; (3) some evidence that endowments diminish the income gaps, while the returns to characteristics increase the gaps; and (4) while observed individual characteristics explain part of the gaps, a substantial part of the income gap is left unexplained. In sum, these results are consistent with the presence of income discrimination towards females but at the same time also point towards the importance of continued attention towards institutions and economic policy for decreasing the gender income gap in these former formally gender neutral economies — notably through attention towards the maternity and paternity leave system, as well as public provision of child care.
    Keywords: Gender,income gap,Oaxaca-Blinder decomposition,detailed decomposition,maternity/paternity leave policies,Eastern Europe and Central Asia
    JEL: J16 J31 J7
    Date: 2018
  3. By: Suyunchev, Marat (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Mozgovaya, Olga (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Fain, Boris (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The research «Development of the Electricity Distribution Network Connection Accessibility Instruments based on Market Participants Mutual Responsibility» study current situation at the electricity distribution network connection market in Russian Federation including connection market participants mutual responsibility aspects. This paper studies practical examples of the competitive markets contracts conditions which stipulated the modernization and the infrastructure expansion in the aim to meeting demand of the single customer; identifies risks of signing long turn contracts, providing investments. Finally, the research suggests the proposals and recommendations to the electricity distribution network connection markets participant mutual responsibility instruments development.
    Date: 2018–05
  4. By: Suyunchev, Marat (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Repetyuk, Sergei (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Temnaya, Olga (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The article presents the results of scientific research «The development of incentive regulation Methodology, based on benchmarking of Distribution Electricity Networks maintenance unit costs», which analyzes international and Russian practice of distribution electricity networks incentive regulation. Factors effecting to the value of Russian distribution electricity networks maintenance manageable costs are identified, and the factors-costs model is developed. The methods of distribution electricity networks yardstick maintenance manageable calculations are considered. The possible effect of the yardstick costs incentive regulation on distribution electricity networks performance is evaluated.
    Date: 2018–05
  5. By: Stoian, Andreea; Vintila, Nicoleta; Tatu, Lucian; Miricescu, Emilian
    Abstract: The aim of this paper is to investigate the fairness and the redistributive effects of personal income tax (PIT) in seven Central and Eastern European countries, namely: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania and Romania. Following Kakwani and Lambert (1998) methodology, we test tax equity and progressivity. We study the asymmetry of salary income distribution in order to examine the horizontal equity among individuals in the same group. We calculate the Gini coefficients in order to investigate the redistributive effects of PIT regulatory frameworks. We find that tax equity is fulfilled by all countries. However, PIT regulations does not allow for strong progressivity and for redistributive effects.
    Keywords: horizontal equity; vertical equity; personal income tax; income distribution; inequality; Gini; Central and Eastern European
    JEL: H2 H24
    Date: 2018–03
  6. By: Yusifov, Sabuhi (Azerbaijan Technological University)
    Abstract: Regional development has been an increasing priority in the development strategy of Korea. Korea's development experience offers good lessons for developing countries in search of sustainable development. In fact, the study of Korea's economic and social transformation provides a unique opportunity to better understand the factors that drive development. The approaches the country has taken to respond to shifting balances, as well as various issues regarding compensation and competitiveness, set a very impressive example of a proper approach to the development process. Meanwhile, Azerbaijan, as an oil-rich country, has made great progress thanks to its substantial oil profits. However, like Korea, it also faces the problem of urban-rural disparity and is applying numerous regional policies to tackle the issue. Given the relevance and usefulness of Korea's development experiences, it would be wise for Azerbaijan to consider the examples provided by Korea and find clues for possible solutions to the challenges it currently faces. The aim of this paper is to look into the paradigm shifts in the regional development of Korea and Azerbaijan, and to draw policy suggestions for Azerbaijan to upgrade its regional development strategies. The paper offers five policy suggestions for Azerbaijan in light of the Korean experience: (1) regional development policy approaches; (2) designing mechanisms to distribute national resources across regions; (3) increasing spaces for bottom-up initiatives; (4) identifying mechanisms to develop regional specialization; (5) the use of monitoring and evaluation as a learning tool.
    Keywords: Korea; Azerbaijan; regional development
    Date: 2018–05–04
  7. By: Martine AUDIBERT (CERDI Université Clermont Auvergne - CNRS); Marlène GUILLON (FERDI); Jacky MATHONNAT (Cerdi - Université Clermont Auvergne)
    Abstract: What data tell us for Soum Health Centers in five provinces?Mongolia is facing strong constraints on the public financing of health expenditures since the economic crisis that started in 2012. In this context, achieving universal health care requires an improvement of health facilities’ efficiency. No published study has quantitatively investigated the efficiency of primary care facilities in former soviet health systems that are still over-reliant on inpatient and specialized care. We study the efficiency level and determinants of Soum Health Centers (SHCs) that provide primary care in rural areas of Mongolia. Data on activity and resources were collected in all SHCs of five rural regions between 2013 and 2015, for which it was possible to get complete and reliable data. We use a double bootstrap Data Envelopment Analysis (DEA) procedure to estimate SHCs’ efficiency and its determinants. SHCs of our sample exhibit a rather low (and declining) level of efficiency since they could, in average, increase activity by 47% without an increase in inputs. Results point to the role of demand-side factors in explaining SHCs’ efficiency. We find that the size of the population in the catchment area, the share of the nomadic population and the dependency ratio are positively correlated with SHCs’ efficiency. On the contrary, the poverty level of the catchment population is negatively correlated with SHCs’ efficiency.
    Keywords: Efficiency, Data Envelopment Analysis, Double bootstrapping, Primary care, Mongolia
    Date: 2018–05
  8. By: Taguchi, Hiroyuki
    Abstract: This paper aims to diagnose Mongolian economy on whether the economy has suffered from the Dutch Disease by applying a vector auto-regression model for the period from 1993 to 2016 under the current market-based regime including resource-booming times. From the outcomes of a VAR model estimation, it was found that there is a great possibility that Mongolian economy has been suffering from the Dutch Disease through the resource movement effect and the spending effect such that the boom in the mining sector has crowded out manufacturing activities; and that the boom in the mining sector has not contributed to, or even deteriorated the capital accumulation effect that alleviates the Dutch Disease. The strategic policy implications for the current Mongolian public financial management are that the part of the existing resource fund should be used for public investment to facilitate capital accumulation, specifically, for the projects on education, health and economic infrastructure to promote industrial diversification.
    Keywords: Dutch Disease; Public Financial Management; Mongolian economy; Vector auto-regression; Public investment
    JEL: F43 L60 O53
    Date: 2018–05
  9. By: Achim Zeileis; Christoph Leitner; Kurt Hornik
    Abstract: Football fans worldwide anticipate the 2018 FIFA World Cup that will take place in Russia from 14 June to 15 July 2018. 32 of the best teams from 5 confederations compete to determine the new World Champion. Using a consensus model based on quoted odds from 26 bookmakers and betting exchanges a probabilistic forecast for the outcome of the World Cup is obtained. The favorite is Brazil with a forecasted winning probability of 16.6%, closely followed by the defending World Champion and 2017 FIFA Confederations Cup winner Germany with a winning probability of 15.8%. Two other teams also have winning probabilities above 10%: Spain and France with 12.5% and 12.1%, respectively. The results from this bookmaker consensus model are coupled with simulations of the entire tournament to obtain implied abilities for each team. These allow to obtain pairwise probabilities for each possible game along with probabilities for each team to proceed to the various stages of the tournament. This shows that indeed the most likely final is a match of the top favorites Brazil and Germany (with a probability of 5.5%) where Brazil has the chance to compensate the dramatic semifinal in Belo Horizonte, four years ago. However, given that it comes to this final, the chances are almost even (50.6% for Brazil vs. 49.4% for Germany). The most likely semifinals are between the four top teams, i.e., with a probability of 9.4% Brazil and France meet in the first semifinal (with chances slightly in favor of Brazil in such a match, 53.5%) and with 9.2% Germany and Spain play the second semifinal (with chances slightly in favor of Germany with 53.1%). These probabilistic forecasts have been obtained by suitably averaging the quoted winning odds for all teams across bookmakers. More precisely, the odds are first adjusted for the bookmakers' profit margins ("overrounds"), averaged on the log-odds scale, and then transformed back to winning probabilities. Moreover, an "inverse" approach to simulating the tournament yields estimated team abilities (or strengths) from which probabilities for all possible pairwise matches can be derived. This technique (Leitner, Zeileis, and Hornik 2010a) correctly predicted the winner of 2010 FIFA World Cup (Leitner, Zeileis, and Hornik 2010b) and three out of four semifinalists at the 2014 FIFA World Cup (Zeileis, Leitner, and Hornik 2014). Interactive web graphics for this report are available at: fifa2018/
    Keywords: consensus, agreement, bookmakers odds, tournament, 2018 FIFA World Cup
    JEL: C53 C40 D84
    Date: 2018–05
  10. By: Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Monika Schwarzhappel (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This report presents and analyses the basic features of foreign direct investment (FDI) in Central, East and Southeast Europe (CESEE) as reported in the balance of payments, following the directional principle and the international investment position. The data reveal that FDI in the region fell by as much as 25% in 2017 against the previous year, and by 20% in the new EU Member States (EU-CEE). These developments are not in line with buoyant economic growth. It was not that surprising, however, as FDI inflow data have been volatile and not much correlated with the rate of economic growth in individual economies. Part of this volatility is caused by disinvestment – i.e. capital withdrawals by foreign investors – which account for a significant component of (net) FDI inflows in the Czech Republic, Hungary and Poland, where national capital took over foreign subsidiaries in banking, utilities and communications, often with government support. In 2017, for the third year in a row, CESEE received increased greenfield FDI commitments in terms of the number of projects (7.4%), while the amount of capital investment pledged fell only 26% short of the extraordinarily high level of 2016 (data based on In the EU‑CEE, greenfield investments rose both in terms of project numbers and capital investments. The biggest greenfield boom in 2017 was recorded in Poland, where FDI inflows reported in the balance of payments halved due to the domestic takeover of some assets, including a large bank. The strained labour market situation may hinder further FDI in the EU-CEE unless investors successfully cope with new challenges, such as immigrant workers, automation (which would trigger new investments) or moving further to the east (which might lead to a withdrawal of capital from existing locations). Relocation to the potentially promising neighbouring destination, Ukraine, is hampered by poor business conditions. New data allow us to identify the substantial gap between inward FDI stocks by the immediate investor (generally available information) and by the ultimate investing country (information available for five countries). These show that the Netherlands and Luxembourg are usually overrated as immediate investors; Germany and the USA turn out to be the most important ultimate investors. Austria remains the third most important investor in EU-CEE, but with declining shares in both home- and host-country reported stocks. Still, the FDI income gained from the region is high in international comparison, amounting to 1.1% of GDP or 10% of the outward FDI stock. The income earned by Austrian investors in EU-CEE is far larger than Austria’s net contribution to the EU budget (0.79% of its GDP). The wiiw FDI Database is available online This online access with a modern query tool supports easy search and download of data. The wiiw FDI Database contains the full set of FDI data with time series starting form 1990 as far as available. Access to wiiw FDI Database
    Keywords: foreign direct investment, balance of payments, FDI by form, income repatriation, statistics, new EU Member States, Central Europe, Southeast Europe, Western Balkans, China, Turkey, CIS, Russia, Ukraine
    JEL: C82 F21 O57 P23
    Date: 2018–06

This nep-cis issue is ©2018 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.