nep-tra New Economics Papers
on Transition Economics
Issue of 2006‒04‒29
thirty-six papers chosen by
Tono Sanchez
Universitat de Valencia

  1. Volatility Regimes in Central and Eastern European Countries' Exchange Rates By Frömmel, Michael
  2. Rural Poverty in Transition Countries By Karen Macours; Johan Swinnen
  3. The Impact of Bank and Non-Bank Financial Institutions on Local Economic Growth in China By Xiaoqiang Cheng; Hans Degryse
  4. The microeconomics of creating productive jobs : a synthesis of firm-level studies in transition economies By Earle, John S.; Brown, J. David
  5. Contribution of ICT to the Chinese Economic Growth By Heshmati, Almas; Yang, Wanshan
  6. Are Domestic Investors Better Informed than Foreign Investors? : Evidence from the Perfectly Segmented Market in China By Chan, Kalok; Menkveld, Albert J,; Yang, Zhishu
  7. Hungary and Poland. By R. Golinelli; R. Orsi
  8. Causes of Efficiency Change in Transition: Theory and Cross-Country Survey Evidence from Agriculture By Johan Swinnen; Liesbet Vranken
  9. Firm-paid vs. worker-paid on-the-job training in Russia: Determinants and returns By Lazareva Olga
  10. The Relative Sophistication of Chinese Exports By Peter K. Schott
  11. Le nouveau rôle de l'Etat dans l'industrie pétrolière en Russie : le privé sous tutelle ? By Sadek Boussena; Catherine Locatelli
  12. Migration in towns in China, a tale of three provinces : evidence from preliminary tabulations of 2000 census By Shi, Anqing
  13. Services Policy Reform and Economic Growth in Transition Economies, 1990-2004 By Eschenbach, Felix; Hoekman, Bernard
  14. Services Policies in Transition Economies: On the EU and WTO as Commitment Mechanisms By Eschenbach, Felix; Hoekman, Bernard
  15. What Determines Technological Spillovers of Foreign Direct Investment: Evidence from China By Galina Hale; Cheryl Long
  16. Social Security Reform in the US: Lessons from Hungary By András Simonovits
  17. Information Asymmetry and Asset Prices: Evidence from the China Foreign share discount By Chan, Kalok; Menkveld, Albert J.; Yang, Zhishu
  18. Chinese Exchange Rate Regimes and the Optimal Basket Weights for the Rest of East Asia By Etsuro Shioji
  19. Labor market developments during economic transition By Rutkowski, Jan
  20. Relative property rights in transition economies: Can the oligarchs be productive? By Gorodnichenko Yury; Grigorenko Yegor; Ostanin Dmytro
  21. A Spatial Investigation of ƒÐ-Convergence in China By Kuan-Pin Lin; Zhi-He Long; Mei Wu
  22. Regional labor market developments in transition By Huber, Peter
  23. Interest Rate Rules and Inflation Targeting in Three Transition Countries. By R. Golinelli; R. Rovelli
  24. Addressing China ' s growing water shortages and associated social and environmental consequences By Shalizi, Zmarak
  25. Wage Inequality in Russia (1994–2003) By Lukyanova Anna
  26. Rental choice and housing policy realignment in transition : post-privatization challenges in the Europe and Central Asia region By Hamilton, Ellen; Brzeski, W. Jan; Dubel, Hans-Joachim
  27. Human Capital and Political Business Cycles By Akhmedov Akhmed
  28. Impact of Cultural Differences on Knowledge Transfer in British, Hungarian and Polish Enterprises By Aleksandra Hauke
  29. Business environment and labor market outcomes in Europe and Central Asia countries By Lopez-Garcia, Paloma
  30. Les enjeux géopolitiques des hydrocarbures de la Caspienne et de la Russie. By Catherine Locatelli
  31. Trade liberalization and the environment in Vietnam By Jha, Shreyasi; Mani, Muthukumara
  32. The Role of Subsidies in Promoting Italian Joint Ventures in Least Developed and Transition Economics. By G. Barba Navaretti; E. Santarelli; M. Vivarelli
  33. the EU and the enlarged EU. By G. Rossini; P. Zanghieri
  34. Assessing the Risk of Oil Spills in the Mediterranean: the Case of the Route from the Black Sea to Italy By Andrea Bigano; Paul Sheehan
  35. Progressivity and Flexibility in Developing an Effective Competition Regime: Using Experiences of Poland, Ukraine, and South Africa for developing countries By Franz Kronthaler; Johannes Stephan
  36. Why do (or do not) banks share customer information? A comparison of mature private credit markets and markets in transition By Iván Major

  1. By: Frömmel, Michael
    Abstract: We investigate the exchange rate volatility of six Central and Eastern European countries (CEEC) between 1994 and 2004. The analysis merges two approaches, the GARCH-model (Bollerslev 1986) and the Markov Switching Model (Hamilton 1989). We discover switches between high and low volatility regimes which are consistent with policy settings for Hungary, Poland and, less pronounced, the Czech Republic, whereas Romania and Slovakia do not show a clear picture. Slovenia, finally, shows some kind of anticipation of the wide fluctuation margins in ERM2.
    Keywords: CEEC, exchange rate volatility, regime switching GARCH, Markov switching model, transition economies
    JEL: E42 F31 F36
    Date: 2006–04
  2. By: Karen Macours; Johan Swinnen
    Abstract: This paper uses new poverty data based on household level surveys to analyze changes in rural poverty and rural-urban poverty differences in 23 transition countries of Central and Eastern Europe and the Former Soviet Union. The paper presents a series of hypotheses to explain differences across countries and changes over time.
    Keywords: rural poverty, transition, Eastern Europe, Former Soviet Union
    Date: 2006
  3. By: Xiaoqiang Cheng; Hans Degryse
    Abstract: This paper shows that banking development spurs growth, even in a country with a high growth rate such as China. Employing data of 27 Chinese provinces over the period 1995-2003, we study whether the financial development of two different types of institutions – banks and non-bank financial institutions – have a (significantly different) impact on local economic growth. Our findings show that banks outperform non-bank financial institutions. Only banking development exerts a statistically and economically significant positive impact on local economic growth. This effect becomes more pronounced when the financial sector is less concentrated.
    Keywords: growth, financial development, Chinese provinces, banks
    JEL: E44 G21
    Date: 2006
  4. By: Earle, John S.; Brown, J. David
    Abstract: The challenge for labor market poli cy in the transition economies has been to redress the sharp drops in employment and rises in unemployment in a way that fosters the creation of productive jobs. The authors first document the magnitude and productivity of job and worker reallocation. Then they investigate the effects of privatization, product and labor market liberalization, and obstacles to growth in the new private sector on reallocation and its productivity in Hungary, Romania, Russia, and Ukraine. The authors find that market reform has resulted in a large increase in the pace of job reallocation, particularly that occurring between sectors and through firm turnover. Unlike under central planning, the job reallocation during the transition has contributed significantly to aggregate productivity growth. Privatization has not only stimulated intrasectoral job reallocation, but the reallocation is more productive than that among remaining state firms. The effect of privatization on firm productivity varies considerably across countries and is not always positive. The productivity gains from privatization have generally not come at the expense of workers but are rather associated with increased wages and employment.
    Keywords: Labor Markets,Small Scale Enterprise,Microfinance,Economic Theory & Research,Privatization
    Date: 2006–04–01
  5. By: Heshmati, Almas (Ratio); Yang, Wanshan
    Abstract: The view about systematic irrationality of investors and managers in investment with reference to information and communication technology (ICT) with no effects on productivity growth is called productivity paradox. Research suggests that ICT return in developed nations is significant and positive, but not in developing countries. This paper challenges the above conclusion by examining the contribution of ICT to the Chinese economic growth. We investigate the relationship between TFP growth and ICT capital and provide estimation of the returns to ICT investment. The contribution of ICT to economic growth has not been studied earlier for the developing countries like China. The empirical results suggest that China has reaped the benefits of ICT investment. The policy implications for the Chinese ICT investment and development are also discussed. The results add to our understanding of how ICT affects growth in the context of economic development.
    Keywords: Productivity paradox; ICT; economic development; TFP growth; China
    JEL: D24 E22 O47
    Date: 2006–04–25
  6. By: Chan, Kalok (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Menkveld, Albert J,; Yang, Zhishu
    Abstract: This paper uses the perfect market segmentation setting in China's stock market to examine whether foreign investors are at informational disadvantage relative to domestic investors. We analyze the price discovery roles of the A- (domestic investors) and B-share (foreign investors) markets in China using a new database of transactions data. Before Feb 19, 2001, the A-share market leads the B-share market in price discovery - the signed volume and quote revision of the A-share market have strong predictive ability for B-share quote returns, but not vice versa. After Feb 19, 2001, because some domestic investors are allowed to invest on the B-share market, we also find evidence for a reverse causality from the B-share to the A-share market. Nevertheless, the Hasbrouck (1995) information share analysis reveals that A-shares continue to dominate price discovery.
    Keywords: Market microstructure; Informational role; Segmented markets; Chinese stock markets
    JEL: F21 D82
    Date: 2006
  7. By: R. Golinelli; R. Orsi
  8. By: Johan Swinnen; Liesbet Vranken
    Keywords: transition agriculture, production efficiency, reforms
    Date: 2006
  9. By: Lazareva Olga
    Abstract: In a restructuring economy on-the-job training plays important role not only in raising the general level of human capital but in retooling workers for the new sectors of economy. The amount of on-the-job training in Russia has however been unsatisfactorily low compared to other countries. Main objective of this paper is to study the incentives of firms and workers to invest into employee training in Russia. Utilizing the data from Russian Longitudinal Monitoring survey for years 1999–2003, we investigate the determinants of training financing with the particular emphasis on the role of labor market characteristics. We exploit heterogeneity in the structure of regional labor markets in Russia to investigate its effect on training outcomes. In line with existing theory, it is shown that imperfections of the labor market, such as higher regional labor market concentration, lower share of small businesses and higher unemployment create incentives for the firms to provide training to employees. Hence, increase in the efficiency of the labor market is likely to bring about further decrease in the amount of employee training in a private sector.
    Keywords: Russia, on-the-job training, labor market structure, returns to training.
    JEL: J24 J31
    Date: 2006–04–26
  10. By: Peter K. Schott
    Abstract: This paper examines the relative "sophistication" of China's exports to the United States along two dimensions. First, I compare China's export bundle to those of the relatively skill- and capital-abundant members of the OECD as well as to similarly endowed U.S. trading partners. Second, I examine prices within product categories to determine if China's varieties command a premium relative to its level of development.
    JEL: F1 F2 F4
    Date: 2006–04
  11. By: Sadek Boussena (LEPII - Laboratoire d'Economie de la Production et de l'Intégration Internationale - - [CNRS : FRE2664] - [Université Pierre Mendès-France - Grenoble II] - []); Catherine Locatelli (LEPII - Laboratoire d'Economie de la Production et de l'Intégration Internationale - - [CNRS : FRE2664] - [Université Pierre Mendès-France - Grenoble II] - [])
    Abstract: Les réformes des années 1990, centrées sur des programmes de privatisation, ont structuré l'industrie pétrolière russe autour de quelques grandes compagnies privées nationales. Cette organisation est aujourd'hui remise en cause par le gouvernement russe qui entend réaffirmer la présence de l'Etat et impulser une nouvelle logique de développement au secteur des hydrocarbures. En premier lieu, il vise à inciter les acteurs privés à relancer l'exploration. En deuxième lieu, il s'agit de mettre le secteur des hydrocarbures au service de la croissance économique, ce qui induit une redistribution du partage de la rente. Enfin, et c'est un élément nouveau, le gouvernement tente de mettre la puissance pétrolière de la Russie au service de sa politique internationale. L'enjeu est la définition d'un nouveau modèle organisationnel de l'industrie pétrolière russe où coexistent différentes formes de propriété.
    Keywords: industrie pétrolière ; Russie ; réforme : privatisation
    Date: 2006–04–25
  12. By: Shi, Anqing
    Abstract: There is a concern that the growth of towns in China has been stalled recently and with it, the creation of nonfarm jobs in rural industries. The author uses the 2000 census tabulations to look at this issue by examining in-migration in towns in three provinces in China-Zhejiang, Henan, and Sichuan-their educational attainment, original place, and occupational composition. In addition to the diversified patterns of town in-migrants revealed in the three provinces, the author finds that town in-migrants generally possess a higher level of educational attainment than the local population in towns, especially in the less developed western and central regions. This inf low of human capital could foster development in towns. There is also evidence that as economic opportunity increases in towns, such as in richer coastal province of Zhejiang, better educated people in rural areas are likely to shift their jobs from the farm to the nonfarm sector in towns nearby, instead of leaving the countryside to migrate to other provinces. This could reduce migration pressure on big cities. Finally, the labor market in towns in the less developed west and central regions is more flexible in accommodating in-migrants, whereas in the developed province of Zhejiang the labor market is segregated between migrants and the local population.
    Keywords: Anthropology,Town Water Supply and Sanitation,Labor Markets,Voluntary and Involuntary Resettlement,Human Migrations & Resettlements
    Date: 2006–04–01
  13. By: Eschenbach, Felix; Hoekman, Bernard
    Abstract: Major changes have occurred in the structure of former centrally planned economies, including a sharp rise in the share of services in GDP, employment and international transactions. However, large differences exist across transition economies with respect to services intensity and services policy reforms. We find that reforms in policies towards financial and infrastructure services, including telecommunications, power and transport, are highly correlated with inward FDI. Controlling for regressors commonly used in the growth literature, we find that measures of services policy reform are statistically significant explanatory variables for the post-1990 economic performance of transition economies. These findings suggest services policies should be considered more generally in empirical analyses of economic growth.
    Keywords: economic growth; services; transition economies
    JEL: F14 F43 O14 O40
    Date: 2006–04
  14. By: Eschenbach, Felix; Hoekman, Bernard
    Abstract: We analyze the extent to which the EU-15 and 16 transition economies used the WTO General Agreement on Trade in Services (GATS) to commit to service sector policy reforms. GATS commitments are compared with the evolution of actual policy stances over time. While there is substantial variance across transition economies on both actual policies and GATS commitments, we find an inverse relationship between the depth of GATS commitments and the 'quality' of actual services policies as assessed by the private sector. In part this can be explained by the fact that the prospect of EU accession makes GATS less relevant as a commitment device for a subset of transition economies. However, for many of the non-EU accession candidates the WTO seems to be a weak commitment device. One explanation is that the small size of the markets concerned generates weak external enforcement incentives. Our findings suggest greater collective investment by WTO members in monitoring and transparency is needed to increase the benefits of WTO membership to small countries.
    Keywords: accession; EU; services liberalization; trade agreements; WTO transition economies
    JEL: F13
    Date: 2006–04
  15. By: Galina Hale (Economic Growth Center, Yale University); Cheryl Long (Colgate University)
    Abstract: Using the World Bank survey of 1500 firms in five Chinese cities, we study whether the presence of foreign firms produces technology spillovers on domestic firms operating in the same city and industry. We find positive spillovers for more backward firms. We analyze the channels of such spillovers and find that the transfer of technology occurs through movement of high-skilled workers from FDI firms to domestic firms as well as through network externalities among high-skilled workers. Moreover, these two channels fully account for the spillover effects we find, which demonstrate the importance of well-functioning labor market in facilitating FDI spillovers. Insofar as our results can be generalized to other countries, they reconcile conflicting evidence found in other studies.
    Keywords: Foreign direct investment, technological spillovers, labor mobility, network externalities, China
    JEL: F2 O1 O3 J2 J6
  16. By: András Simonovits (Institute of Economics, Hungarian Academy of Sciences)
    Abstract: The partial privatization of the US Social Security system was clearly the top economic policy priority for the new Bush administration. While many famous economists, publicists and politicians support, others reject the partial privatization of the Social Security system. The international comparisons have been quite infrequent, concentrated on few countries (Chile, Great Britain and Sweden) and left out similar reforms introduced in similar situations, like in Hungary, Poland and other ex-communist countries. In this article I try to make up for this omission and outline the lessons from the Hungarian reform, started in 1998. The conclusion is simple: such a reform is possible but does not solve the problems of social security.
    Keywords: Social Security, Pensions, Prefunding of pensions, United States, Hungary
    JEL: H55 J26
    Date: 2006–04–24
  17. By: Chan, Kalok (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Menkveld, Albert J.; Yang, Zhishu
    Abstract: We examine the effect of information asymmetry on equity prices in the local A- and foreign Bshare market in China. We construct measures of information asymmetry based on market microstructure models, and find that they explain a significant portion of cross-sectional variation in B-share discounts, even after controlling for other factors. On a univariate basis, the price impact measure and the adverse selection component of the bid-ask spread in the A- and B-share markets explains 44% and 46% of the variation in B-share discounts. On a multivariate basis, both measures are far more statistically significant than any of the control variables. We also examine the behavior of B-share discounts after the B-share market was partially opened up to domestic investors after March 2001. Not only do we observe that B-share discounts decline from an average of 72% to 43%, but we also find that the differences in the adverse selection components across the markets shrink.
    Keywords: Information asymmetry; Asset prices; Microstructure; Market segmentation; Spread decomposition; PIN; China
    JEL: G1 G15 G14 G12
    Date: 2006
  18. By: Etsuro Shioji
    Abstract: China has recently announced its intention to fundamentally reform its currency regime in the future. This paper studies how the country's choice of its exchange rate regime interacts with the rest of East Asia's choice. For that purpose, I build a four country new open economy macroeconomic model that consists of East Asia, China, Japan and the US. It is assumed that both East Asia and China peg their respective currencies to certain weighted averages of the Japanese yen and the US dollar. Each side takes the other's choice as given and chooses its own basket weight. The game is characterized by strategic complementarity. It is shown that the currency in which the traded goods prices are quoted plays an important role. The paper considers two alternative cases, the standard producer currency pricing (PCP) case and the vehicle currency pricing (VCP) case in which all the prices of traded goods are preset in the units of US dollars. In the PCP case, trade volume is the important determinant of the equilibrium basket weights, and the balances of trade are inconsequential. However, in the VCP case, trade balances between the four economies are shown to play an important role. Under VCP, and starting from realistic initial trade balances, the equilibrium basket weights far exceed what are implied by Japan's presence in international trade.
    Date: 2006–04
  19. By: Rutkowski, Jan
    Abstract: The paper reviews labor market developments in the transition economies of Europe and Central Asia. It argues that the scarcity of productive job opportunities and the growing labor market segmentation are the two main labor market problems facing the transition economies. In the European transition economies the lack of jobs has led to persistent open unemployment. In the Commonwealth of Independent States (CIS) it has led to hidden unemployment (underemployment and low productivity employment). Unemployment in the European transition economies is supported by the developed social safety net. In contrast, in the CIS for most workers unemployment is not an affordable option. They either stick to their old, unproductive jobs in unrestructured enterprises, or work in the informal sector, or resort to subsistence agriculture. Thus, underemployment in the CIS is a mirror image of unemployment in the European transition economies. Accordingly, the high employment-to-population ratios in many CIS countries do not necessarily signify favorable labor market performance. Instead they often indicate delayed enterprise restructuring, the maintenance of unsustainable jobs in uncompetitive firms, and the existence of a large informal sector as an employer of last resort. Labor market segmentation has been caused by a sharp increase in earnings differentials and the attendant increase in the incidence of low-paid jobs, by the polarization of regional labor market conditions, and finally by the growth of the informal sector offering casual, low-productivity jobs. Labor market segmentation and accompanying inequalities are more pronounced in the CIS than in the European transition economies.
    Keywords: Labor Markets,Labor Standards,Labor Management and Relations,Educational Policy and Planning,Work & Working Conditions
    Date: 2006–04–01
  20. By: Gorodnichenko Yury; Grigorenko Yegor; Ostanin Dmytro
    Abstract: Empirical evidence suggests that Ukrainian ferrous metal industry exhibits extremely low capacity utilization rates. This project seeks to explain this phenomenon within the framework of the property rights approach. A solution to the problem is proposed via introduction of the third party between primary producing firms. Policy implications will be developed.
    Keywords: Ukraine, ferrous metal industry
    JEL: C23 C33 C78 D82 K11 L61
    Date: 2006–04–26
  21. By: Kuan-Pin Lin; Zhi-He Long; Mei Wu
    Abstract: Using techniques of spatial econometrics, this paper investigates ƒÐ-convergence of provincial real per capita gross domestic product (GDP) in China. The empirical evidence concludes that spatial dependence across regions is strong enough to distort the traditional measure of ƒÐ-convergence. This study focuses on the variation of per capita GDP that is dependent on the development processes of neighboring provinces and cities. This refinement of the conditional ƒÐ-convergence model specification allows for analysis of spatial dependence in the mean and variance. The corrected measure of ƒÐ-convergence in China indicates a lower level of dispersion in the economic development process. This implies a smaller divergence in real per capita GDP, although convergence across regions is still a challenging goal to achieve in the 2000s. </span></td></tr>
    Keywords: ƒÐ-Convergence, Moran's index, spatial dependence, spatial lag
    JEL: C23 O18 O53 R11
    Date: 2006–03
  22. By: Huber, Peter
    Abstract: The author analyzes regional labor market disparities in transition by presenting some data and summarizing existing literature. He finds that large and persistent regional labor market disparities developed in virtually all transition countries and that there is some evidence of polarization. Differences in starting conditions and market access seem to be the major reasons for regional divergence in transition. Furthermore, regional wages are only slightly more flexible than in many European Union labor markets, interregional migration is low, and capital seems to move toward high wage and low unemployment urban centers rather than to the most backward regions. Policy should thus take a long-run perspective on the existing regional disparities, focus on removing barriers to mobility, review existing institutions for implementing regional policy, and aim at a close coordination of regional and labor market policy instruments.
    Keywords: Labor Markets,Economic Theory & Research,Markets and Market Access,Youth and Governance,Country Strategy & Performance
    Date: 2006–04–01
  23. By: R. Golinelli; R. Rovelli
  24. By: Shalizi, Zmarak
    Abstract: China has experienced a wide-scale and rapid transformation from an agricultural based economy to the manufacturing workshop of the world. The associated relocatio n of the population from relatively low density rural areas to very high density urban areas is having a significant impact on the quantity and quality of water available as inputs into the production and consumption process, as well as the ability of the water system to absorb and neutralize the waste byproducts deposited into it. Water shortages are most severe in the north of the country, where surface water diversion is excessive and groundwater is being depleted. In addition, the quality of water is deteriorating because of pollution, thereby aggravating existing water shortages. The biggest challenge ahead will be for national and local governments to craft policies and rules within China ' s complex cultural and legal administrative system that provide incentives for users to increase efficiency of water use, and for polluters to clean up the water they use and return clean water to stream flows. Using a standard public economics framework, water requirements for public goods-such as ecosystem needs-should be set aside first, before allocating property rights in water (to enable water markets to function and generate efficient allocation signals). Even then, water markets will have to be regulated to ensure public goods, such as public health, are not compromised. Until water markets are implemented, staying the course on increasing water and wastewater prices administratively and encouraging water conservation are necessary to reduce the wasting of current scarce water resources, as well as the new water supplies to be provided in the future.
    Keywords: Water Supply and Sanitation Governance and Institutions,Town Water Supply and Sanitation,Water and Industry,Water Conservation,Water Use
    Date: 2006–04–01
  25. By: Lukyanova Anna
    Abstract: The paper documents the changes in the size of the wage distribution in Russia over the period 1994–2003. Developments in wage inequality varied a lot by sub-periods: overall wage inequality stayed stable in 1994–1996, then it jumped following the 1998 crisis and remained at higher levels for three years. In 2002 the trend reversed again and in the course of a single year wage inequality fell back to the level of the mid-1990s. We find that evolution wage inequality was largely driven by changes in the upper end of the wage distribution. Decomposition of wage inequality by population sub-groups shows that inequality has been higher for men, younger and low-educated workers, and rural inhabitants. The structure of inequality did not change much over the period from 1994 to 2003. Demographic variables (mainly gender and region) explain the largest proportion of wage dispersion (over 40% of the explained variation and 15% of total variation). Nearly equivalent is the contribution of firm characteristics with industry affiliation of employer playing the leading role. Our results show that returns to education continued to rise at all percentiles of the wage distribution converging at the level of about 8–9% of wage increase for an additional year of schooling.
    Keywords: Russia, wage inequality, decomposition, quantile regression
    JEL: E24 J31
    Date: 2006–04–26
  26. By: Hamilton, Ellen; Brzeski, W. Jan; Dubel, Hans-Joachim
    Abstract: Massive privatizations of housing in Europe and Central Asia transition countries have significantly reduced rental tenure choice, threatening to impede residential mobility. Policymakers are intensifying their search for adequate policy responses aimed at broadening tenure choice for more household categories through effective rental housing alternatives in the social and private sectors. While the social alternative requires substantial and well-balanced subsidies, the private alternative will not grow unless rent, management, and tax reforms are boldly implemented and housing privatization truly completed.
    Keywords: Urban Housing,Housing & Human Habitats,Municipal Financial Management,Public Sector Management and Reform,Non Bank Financial Institutions
    Date: 2006–04–01
  27. By: Akhmedov Akhmed
    Abstract: Classical theory considers political business cycle as a result of either opportunistic behavior of government (opportunistic cycle) or aiming policy on certain constituency (partisan cycle). In this paper, we propose an alternative explanation of the phenomenon of political business cycle — experience of government. We propose an illustration that shows that elections infer cycles without any opportunism or ideology of incumbents. We also build a model with endogenous ego-rent. The model explains a channel to increase incentives, when none has commitment — governors need to develop skills to increase their value for public and increase probability to get re-elected. Using fiscal monthly data of Russian regions from 1996 to 2004, we got evidence both of positive effect of experience on performance and opportunistic component of the cycle. We also got evidence of diminishing return on experience.
    Keywords: Russia, elections, opportunistic business cycle, experience, sunk cost, Russian regions
    JEL: D72 E32 H72 P16
    Date: 2006–04–26
  28. By: Aleksandra Hauke (University of Economics)
    Abstract: The aim of the article is to verify the hypothesis, that despite the cultural differences existing among Great Britain, Hungary and Poland, all enterprises put much effort to ensure good conditions for knowledge sharing by their employees. It consists of two major parts. In the first one, the theoretical concepts of culture and knowledge are presented. In the second part, the interpretation of results obtained in research on macro and micro level analyses in three European countries are shown. The macro level analysis is based on the differences in cultural dimensions presented by G. Hofstede and R. Gestland while the micro level analysis is conducted based on the results of empirical investigation carried out by International Research Group: Marketing in the XXI century, among companies operating in Great Britain, Hungary and Poland. Results obtained through this survey are compared with cultural dimensions in order to see how significant the distance between the received theory and empirical investigation is.
    Keywords: Cultural Differences, Knowledge Transfer
    JEL: L10
    Date: 2006–04
  29. By: Lopez-Garcia, Paloma
    Abstract: New firm entry has been fundamental for job creation in the transition economies. Hence, the urge to reform the framework in which firms operate. This paper aims to improve our understanding of the business environment of the Europe and Central Asia (ECA) countries, as well as to assess which of the institutions that shape it are most important for labor market performance. To achieve that aim, the author groups the institutions into those affecting firm entry and those affecting business survival and growth, and proceeds to construct indicators to summarize them. Next, she analyzes the impact of the business environment institutions on the employment generated by the private sector of the countries, proxied by the service employment rate. The regression analysis uses an unbalanced panel of 28 ECA countries over 14 years-from 1988 to 2002. Recent literature on the labor market performance of the OECD countries argues that what matters for employment is the interaction between institutions and shocks. Accordingly, the explanatory variables used in the regression are the interactions between the transition shock suffered by the ECA countries and each of the business environment institutions previously defined. The author finds that access to finance is the most important institution across all ECA cou ntries. The development of the financial sector can explain about 40 percent of private employment creation in the European transition economies according to the model. On the other hand, the poor access to finance in Bulgaria, Croatia, and above all, Romania, is the main factor behind their poor development of the private sector. Market regulation (credit and labor regulation), start-up costs, and the tax burden are all found to significantly affect employment as well.
    Keywords: Labor Markets,Economic Theory & Research,Markets and Market Access,Microfinance,Small Scale Enterprise
    Date: 2006–04–01
  30. By: Catherine Locatelli (LEPII - Laboratoire d'économie de la production et de l'intégration internationale - - [CNRS : FRE2664] - [Université Pierre Mendès-France - Grenoble II] - [])
    Abstract: Analyse de l'approvisionnement en hydrocarbures de l'Union européenne et de l'Asie à partir de la Russie et de la Caspienne (réserves, production, voies de gazoducs et d'oléoducs). Mise en perspective de la concurrence possible entre la Caspienne et la Russie.
    Keywords: exportation ; gaz naturel ; pétrole ; Russie ; approvisionnement ; Union européenne ; Asie ; transport
    Date: 2006–04–26
  31. By: Jha, Shreyasi; Mani, Muthukumara
    Abstract: Vietnam ' s integration with the international economy has increased significantly over the past decade, aided by substantial liberalization of trade, and appears set to increase further as trade-expanding measures take full effect. This dramatic shift in Vietnam ' s trading patterns has important implications for the environment and use of natural resources. This paper offers a systematic analysis of the trading and investment patterns to give a broader understanding of the environmental implications of greater openness of the economy during the past decade. The results suggest increasing manufacturing and export activity in water and toxic pollution-intensive sectors compared with the less pollution-intensive sectors. The story is, on the surface, consistent with the changing composition of Vietnamese production and exports away from traditional sectors and toward pollution-intensive manufacturing (especially leather and textiles). The paper also highlights the need to consider strengthening environmental policies while further trade liberalization is being contemplated through Vietnam ' s joining of the World Trade Organization.
    Keywords: Environmental Economics & Policies,Water a nd Industry,Economic Theory & Research,Free Trade,Green Issues
    Date: 2006–04–01
  32. By: G. Barba Navaretti; E. Santarelli; M. Vivarelli
  33. By: G. Rossini; P. Zanghieri
  34. By: Andrea Bigano (Fondazione Eni Enrico Mattei); Paul Sheehan (Fondazione Eni Enrico Mattei and École Polytechnique Fédérale de Lausanne)
    Abstract: Recent major spills on European coasts have highlighted the primary policy relevance for the EU of oil spills. This paper assesses the risks related to carrying oil to the EU along the route from the Russian Black Sea coast to Sicily, Italy (one of the most congested and strategically relevant European import routes). We develop a methodology based on Fault Tree Analysis, and we apply it to the most likely causes of an oil spill. We couple the resulting probabilities with data on expected spill size, types of oil carried and cleanup costs, to estimate expected costs for cleanup and loss of cargo. The route analysed appears to be a risky one; there is a “high” to “very high” risk of a spill along this route. The Turkish Straits turn out to be the major danger point; however, there is no obvious hierarchy amongst the other sites along the route.
    Keywords: Oil spills, Cleanup costs, Risk analysis
    JEL: Q32 Q51 Q52 Q53
    Date: 2006–02
  35. By: Franz Kronthaler; Johannes Stephan
    Abstract: Die Studie diskutiert die Bedeutung von ‘special and differential treatment’ im Rahmen von Freihandelsabkommen für die Entwicklung eines Wettbewerbsregimes. Zunächst werden die Entstehung und die Hauptbestandteile dieses Konzeptes kurz diskutiert. Anschließend werden drei Länder – Polen, Ukraine und Südafrika – bezüglich dieses Konzeptes bewertet. Polen mußte im Rahmen der Beitrittsverhandlungen zur Europäischen Union das Wettbewerbsregime dem der Europäischen Union anpassen. Die Ukraine wählte freiwillig das Europäische Modell, trotz der engen Anbindung an Rußland. Mit Südafrika wird ein Entwicklungsland behandelt, dessen Gesellschaftssystem durch jahrzehntelange Rassentrennungspolitik beeinflußt wurde und heute noch durch eine hohe Konzentration der Wirtschaftsaktitivtät gekennzeichnet ist. Alle drei Länder haben jüngst ein Wettbewerbsgesetz eingeführt beziehungsweise reformiert, um den Herausforderungen zunehmender wirtschaftlicher Integration, nachholender Entwicklung und gesellschaftlicher Probleme zu begegnen. Die Erfahrungen dieser Länder können anderen Entwicklungsländern helfen, die angehalten sind, im Rahmen eines Freihandelsabkommens ein Wettbewerbsregime zu etablieren.
    Date: 2006–04
  36. By: Iván Major (Institute of Economics, Hungarian Academy of Sciences)
    Abstract: Credit bureaus administering information sharing among lenders about customers reduce information asymmetry and should be key to modern credit markets. In contrast to former studies, we show that willingness to share information depends more on institutions and market concentration than on demand or other market characteristics such as, regional diversity or local monopolies. We show using infinite period models with strategic behavior that lenders' interest to share information depends on market concentration and the type of information sharing arrangement. Sharing bad information only is the dominant strategy if banks think long-term. If banks are myopic no information sharing may occur.
    Keywords: Organisational Behaviour, Transaction Costs, Criteria for Decision-Making under Risk and Uncertainty, Asymmetric and Private Information, Intertemporal Firm Choice and Growth, Investment, or Financing, Banks; Other Depository Institutions; Mortgages
    JEL: D23 D81 D82 D92 G21
    Date: 2006–04–24

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