nep-tra New Economics Papers
on Transition Economics
Issue of 2005‒01‒02
thirteen papers chosen by
Toño Sanchez
Universidad de Valencia

  1. Poverty and Inequality and Social Policy in China By Bingqin Li; David Piachaud
  2. The Auto-component Supply Chain in China and India - A Benchmark Study By John Sutton
  3. On the Periphery of the Russo-Japanese War - Part I By John Chapman; Ian Nish
  4. Dumping in Developing and Transition Economies By José Luis Moraga-González; Jean-Marie Viaene
  5. Significance and Determination of Fees for Municipal Finance By Peter Friedrich; Anita Kaltschuetz; Chang Woon Nam
  6. Does Privatization Raise Productivity? Evidence from Comprehensive Panel Data on Manufacturing Firms in Hungary, Romania, Russia, and Ukraine By J. David Brown; John S. Earle; Almos Telegdy
  7. The Wage Effects of Schooling under Socialism and in Transition: Evidence from Romania, 1950-2000 By Daniela Andren; John S. Earle; Dana Sapatoru
  8. Economic Growth, Income Distribution, and Poverty in Poland during Transition By Pierella Paci; Marcin J. Sasin; Jos Verbeek
  9. Human Capital and Unemployment in Transition Economies: The Case of Kosova By Avdullah Hoti
  10. Reform reversals and output growth in transition economies By Merlevede Bruno
  11. Endowments, Market Potential, and Industrial Location: Evidence from Interwar Poland (1918-1939) By Nikolaus Wolf
  12. Exchange rate regimes and exchange market pressure in accession countries By Vanneste J.; Van Poeck A.; Veiner M.
  13. Openness, Income and Growth in China By Ting Gao; Yuwei Wang

  1. By: Bingqin Li; David Piachaud
    Abstract: Despite prolonged economic growth, poverty has become a more notable and noted feature of Chinese society. The paper examines three phases of development since the foundation of the People's Republic: the central planning era (1949 -1978); the pro-urban growth model (1978 - 1999); and more recent changes (1999 - 2004). For each phase the nature of the economic and social policies are described and the effects on poverty and inequality are examined. The limitations of a social policy that is subservient to the economic strategy are considered. The alternative of a model of social development based on the livelihood approach is analysed and its potential to reduce poverty and inequality are considered.
    Keywords: poverty, inequality, social policy, China, livelihoods, social development
    JEL: I3
    Date: 2004–11
  2. By: John Sutton
    Abstract: The aim of this study is to examine the extent to which Chinese and Indian auto-component producers have advanced towards international best practice levels of productivity and quality. The report is based on a survey of nine car manufacturers in China and six in India; a range of general component suppliers in both countries, and on a detailed benchmarking study of six seat producers and six exhaust suppliers in each country.
    Keywords: Auto Components, Supply Chains, India, China, Benchmarking.
    Date: 2004–02
  3. By: John Chapman; Ian Nish
    Abstract: Chapman: Major defects in British naval intelligence were the absence of an effective central department, an inferior network of naval attachés in major capitals prior to 1902 and the lack of secure direct cable communications with Northeast Asia. The performance of the Naval Intelligence Department was changed for the better by the efforts of Lord Selborne as First Lord of the Admiralty (1900-5). Selborne's promotion of Britain's alliance with Japan was conditional on a close working relationship with the administration of Theodore Roosevelt.Nish: There was considerable uncertainty and indecision about whether China would take part in the Russo-Japanese war. Finally under considerable outside pressure she declared strict neutrality. Since the civil administration in her Three Eastern Provinces (Manchuria) was in Chinese hands, she inevitably had a role in the war; and her people suffered much.The Portsmouth treaties that ended the war could only be implemented with China's agreement. Foreign Minister Komura had to conclude new treaties with China at the Peking Conference on 22 December 1905.
    Keywords: Japan, China, Russia, Manchuria, Britain, Admiralty, Fisher, Selborne, Balfour, Uchida, Komura, Yuna Shikai, Great Northern Telegraphs, Naval Intelligence, Portsmouth Conference, Peking Conference.
    Date: 2004–04
  4. By: José Luis Moraga-González; Jean-Marie Viaene
    Abstract: We build a simple theoretical model to understand why developing and transition economies have increasingly applied anti-dumping laws. To that end, we investigate the strategic incentives of oligopolistic exporting firms to undertake dumping in these economies. We show that dumping may be due to cross-country differences in income, to the extent of tariff protection and to the exchange rate depreciations observed recently. Dumping may arise even if consumers exhaust all arbitrage possibilities.
    Keywords: dumping, exchange rate, optimal trade policy, product quality
    JEL: F12 F13 P31
    Date: 2004
  5. By: Peter Friedrich; Anita Kaltschuetz; Chang Woon Nam
    Abstract: The idea of fiscal decentralisation has become increasingly fashionable world-wide. But every country has unique features of the intergovernmental fiscal system. In general municipal expenditures are rapidly growing in European countries. On the other hand local tax increases are not easily enforceable at present, whereas the local fiscal autonomy is unlikely to be guaranteed as long as municipalities are strongly dependent on down-flow grants. In such a fiscal-stress situation an improvement of local fiscal capacity can be achieved from the increase of fees. Four European countries were chosen to survey the recent development of municipal finance: Britain, Germany, Poland and Switzerland. This paper firstly identifies and highlights the similarities and differences in municipal finance in an international context. Secondly it theoretically examines the possibility of enhancing fiscal autonomy of local governments through determining optimal fee level which leads to an increase of revenues from this revenue item.
    Keywords: fiscal decentralisation, local expenditures and taxes, fees, shared taxes, intergovernmental transfers, municipal borrowings, Poland, Britain, Switzerland, Germany
    JEL: H20 H40 H60 H70 H80
    Date: 2004
  6. By: J. David Brown (Heriot-Watt University and CEU Labor Project); John S. Earle (W.E. Upjohn Institute for Employment Research and Central European University); Almos Telegdy (Central European University and Institute of Economics of the Hungarian Academy of Sciences)
    Abstract: We analyze the impact of privatization on multifactor productivity (MFP) using long panel data for nearly the universe of initially state-owned manufacturing firms in four economies. Controlling for firm and industry-year fixed effects and employing a wide variety of measurement approaches, we estimate that majority privatization raises MFP about 28 percent in Romania, 22 percent in Hungary, and 3 percent in Ukraine, with some variation across specifications, while in Russia it lowers it about 4 percent. Privatization to foreign rather than domestic investors has a larger impact (about 44 percent) and is much more consistent across countries. The positive effects emerge within a year in Hungary, Romania, and Ukraine and continue to grow thereafter, but are still ambiguous even after 5 years in Russia. Pre-privatization MFP exceeds that of firms remaining state-owned in all countries, implying that cross-sectional estimates overstate privatization effects. The patterns of the estimated effects cast doubt on a number of explanations for "when privatization works."
    Keywords: privatization, productivity, foreign ownership, Hungary, Romania, Russia, Ukraine, transition
    JEL: D24 G34 L33 P31
    Date: 2004–11
  7. By: Daniela Andren (University of Gothenborg); John S. Earle (W.E. Upjohn Institute for Employment Research and Central European University); Dana Sapatoru (W.E. Upjohn Institute for Employment Research)
    Abstract: We estimate the impact of schooling on monthly earnings from 1950 to 2000 in Romania. Nearly constant at about 3-4 percent during the socialist period, the coefficient on schooling in a conventional earnings regression rises steadily during the 1990s, reaching 8.5 percent by 2000. Our analysis finds little evidence for either the standard explanations of such an increase in the West (labor supply movements, product demand shifts, technical change) or the transition-specific accounts sometimes offered (wage liberalization, border opening, increased quality of education). But we find some support for institutional and organizational explanations, particularly the high productivity of education in restructuring and entrepreneurial activities in a disequilibrium environment.
    Keywords: returns to schooling, human capital, education, wage differentials, transition, Romania
    JEL: I20 J23 J24 J31 O15 P23 P31
    Date: 2004–11
  8. By: Pierella Paci; Marcin J. Sasin; Jos Verbeek
    Abstract: Paci, Sasin, and Verbeek attempt to analyze the linkages between macroeconomic policies and economic growth variables, their movement over time, and their impact on poverty in the case of Poland. Poland, a middle-income country, is of particular interest because its data sources allow for a relatively detailed analysis of such developments, and the macroeconomic environment and the economic growth variables show a relatively sizable degree of variance. In addition, Poland has struggled in the past few years to reduce poverty while still experiencing positive economic growth. The authors show that in Poland, poverty-reducing growth depends heavily on the ability of the economy to generate jobs. During the early years of transition, net job growth was positive, while after the Russian crisis of 1998, productivity gains were accomplished mostly through labor shedding, henceforth, increasing poverty in Poland. In addition, the authors identify how fiscal and social protection policies affect income distribution and poverty in Poland. This paper—a product of the Poverty Reduction and Economic Management Sector Unit, Europe and Central Asia Region—is part of a larger effort in the region to analyze the links between post-transition economic growth and poverty reduction.
    Keywords: Labor & Employment; Macroecon & Growth; Poverty
    Date: 2004–12–30
  9. By: Avdullah Hoti (University of Prishtina, Faculty of Economy, Kosova)
    Abstract: In this paper we explore the issues of human capita in Kosova, a country which is characterised by high unemployment and large-scale emigration. Using data from the Riinvest Labour Force and Household Survey (December 2002), we estimate the probability of being unemployed for those who are of working age, are active in the labour force and reside in Kosova. Apart from this, we estimate the probability of emigrating for those of working age. There seems to be some systematic patterns: (i) those who are unemployed are not randomly selected from the labour force; (ii) those who emigrate are not randomly selected from working age population. The empirical results show that the individuals residing in rural areas face higher probability of being unemployed. Consequently, they tend to emigrate more compared to those residing in urban areas. Second, males and married people face lower probability of being unemployed. But they also tend to emigrate more compared to their respective counterparts. Third, although the more educated individuals face lower probability of being unemployed in Kosova, they tend to emigrate more than less educated individuals. These research findings might be used for developing policy proposals.
    Keywords: Transition, human capital, unemployment, emigration, Kosova
    JEL: J
    Date: 2004–12–30
  10. By: Merlevede Bruno
    Abstract: This paper tests whether there is a macroeconomic cost of a reform reversal during transition. A reform reversal is defined as a downgrading in the level of an average reform indicator. This is important both from an empirical and a theoretical point of view. In the standard empirical framework the current level of reform a.ects growth negatively, while the lagged level a.ects growth positively. This nonlinear e.ect is shown to imply a counterintuitive, short-lived, or at best an insignificant, positive e.ect of a reversal. From a theoretical point of view however, most models assume a reversal to be costly. The existence of reversal costs is even crucial for gradualist strategies to dominate big bang strategies in the presence of aggregate uncertainty. In a simultaneous equation system with growth and the level of reform as dependent variables we explicitly introduce a reversal parameter. Empirical results suggest that a reversal generates an immediate negative contribution to real output growth. Taking into account the level of reform a country achieved, a reversal is found to be more costly at higher levels of the reform indicator.
    Date: 2003–06
  11. By: Nikolaus Wolf
    Abstract: The paper explores the determinants of industry location across interwar Poland. After more than 120 years ofpolitical and economic separation, Poland was reunified at the end of 1918. In consequence, its industry facedmassive structural changes: the removal of internal tariff barriers and improved infrastructure strengthened thedomestic market, while foreign market relations were cut off. Similarly, the geographical dispersion of factorendowments was changed through internal migration and new institutional arrangements (education system,patent laws, etc.). How did these forces interact to determine the location of industry? Did a new interregionaldivision of labour emerge after unification? We survey the dynamics of industrial location between 1925 and1937 and estimate a specification that nests market potential and comparative advantage to quantify theirrespective impact over time. The results point to a role for both, comparative advantage and market potential,but there was a dominating and ever increasing impact of the availability of skilled labour.
    Keywords: Industrial Location, Endowments, Market Potential, Interwar Poland
    JEL: F10 F11 F12 F14 F15 N74 R3
    Date: 2004–01
  12. By: Vanneste J.; Van Poeck A.; Veiner M.
    Date: 2004–06
  13. By: Ting Gao (University of Missouri-Columbia); Yuwei Wang
    Abstract: In this paper we study the effects of openness on regional income and growth in China. We first construct exogenous components of openness to foreign direct investment (FDI) and trade based on geographic and cultural attributes of Chinese provinces, and then use them to obtain the instrumental variables estimates of the effects of FDI and trade on income and growth. We find positive effects of FDI on both income and growth, which are in most cases precisely estimated and economically large.
    JEL: F43 O18 O53 R11
    Date: 2004–12–27

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