nep-tra New Economics Papers
on Transition Economics
Issue of 2009‒05‒16
seventeen papers chosen by
J. David Brown
Heriot-Watt University

  1. Changes in Food, Alcohol and Cigarettes Consumption during Transition: Evidence from Russia By Herzfeld, Thomas; Huffman, Sonya K.; Oskam, Arie; Rizov, Marian
  2. Institutional Determinants of New Firm Entry in Russia: A Cross Regional Analysis By R. L. Bruno; M. Bytchkova; S. Estrin
  3. Temporary Labour Migration and Welfare at the New European Fringe: A Comparison of Five Eastern European Countries By Danzer, Alexander M.; Dietz, Barbara
  4. Empirical Analysis of Land-use Change and Soil Carbon Sequestration Cost in China By Li, Man; Wu, JunJie; Deng, Xiangzheng
  5. Influence of integration of Czech Republic into EU on form and protection of economic competition By Pellešová, Pavlína
  6. Active Labour Market Policies and Unemployment Convergence in Transition By Tyrowicz, Joanna; Wójcik, Piotr
  7. Weather Risk and the Viability of Weather Insurance In Western China By Turvey, Calum G.; Kong, Rong; Belltawn, Burgen
  8. Family Background, School Quality, Ability and Student Achievement in Rural China âIdentification Using Famine-Generated Instruments By Chen, Qihui
  9. Sources of Agricultural Productivity Growth in Central Asia By Lerman, Zvi; Sedik, David J.
  10. Re-Think Russian Investment in Southern Africa By Gerasimchuk, Ivetta
  11. Farm debt in transition countries: Lessons for Tajikistan By Lerman, Zvi; Sedik, David J.
  12. Адекватность закрытой модели для российской экономики в задаче сравнительного анализа Энергетической стратегии России By Bazhanov, Andrei; Belyaev, Alexander
  13. Managing Success in Viet Nam: Macroeconomic Consequences of Large Capital Inflows with Limited Policy Tools By Menon, Jayant
  14. Blood for Social Status: Preliminary Evidence from Rural China By Chen, Xi; Zhang, Xiaobo
  15. Moving up the ladder ? the impact of migration experience on occupational mobility in Albania By Carletto, Calogero; Kilic, Talip
  16. Poverty and Economic Growth in Russia’s Regions By Paul Mosley; Altay Mussurov

  1. By: Herzfeld, Thomas; Huffman, Sonya K.; Oskam, Arie; Rizov, Marian
    Abstract: This paper examines the changes in nutritional behavior of Russian adults over the ten-year transition period, between 1994 and 2004. We present evidence on the impact of individual as well as regional characteristics on changes in fat, protein, alcohol and cigarette consumption, and on diversity of diet. The results from a dynamic empirical model suggest that among microeconomic determinants, initial levels of consumption, gender, holding a university degree, and having access to a garden plot have a significant impact on the changes in consumption behavior in Russia. Regarding the macroeconomic variables, economic growth has a significant impact on changes in fat and protein consumption and on alcohol use, while unemployment changes significantly impact protein intake, alcohol consumption and the diversity of diet.
    Keywords: consumption, smoking, alcohol, economic transition, Russia, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,
    Date: 2009
  2. By: R. L. Bruno; M. Bytchkova; S. Estrin
    Date: 2008–10
  3. By: Danzer, Alexander M. (Royal Holloway, University of London); Dietz, Barbara (Institute for Eastern European Studies, Regensburg)
    Abstract: This paper investigates patterns and determinants of temporary labour migration in Armenia, Belarus, Georgia, Moldova and Ukraine after EU enlargement in 2004. Migration incidence, destination choices and migration determinants differ between poorer and better-off countries. Although broadly in line with general results from the migration literature, we observe some peculiarities like the high share of older migrants and a modest role of family obligations in the migration decision process. We find no indication of a brain drain related to temporary migration in sending regions as the educational background of migrants is rather low. Migration is used as household insurance against unemployment and is associated with lower incidence of poverty. This finding remains robust when attempting to reduce the potential omitted variable bias with an instrumental variable approach.
    Keywords: temporary migration, welfare, Eastern Europe, cross-country study
    JEL: F22 J61 I31 P23
    Date: 2009–04
  4. By: Li, Man; Wu, JunJie; Deng, Xiangzheng
    Abstract: This project examines the driving forces behind the land-use change and evaluates the effects of land-use transition on soil organic carbon density and sequestration cost in China. It contributes to the literature in three aspects. First, it applies a discrete choice method to model multiple land-use options with a unique set of high-quality data. Second, it conducts a comprehensive analysis of biophysical characteristics and changes in soil carbon storage caused by land-use change. Third, it examines the economic efficiency of alternative land use policies as instruments for carbon sequestration in China.
    Keywords: carbon sequestration, land-use, soil organic carbon density, China, Environmental Economics and Policy, Land Economics/Use,
    Date: 2009
  5. By: Pellešová, Pavlína
    Abstract: The article is focused on area of economic competition. The basic pre-requisite of economic competition is assuring of freedom of entrepreneurship, freedom of partners choice, possibility to enter in and secede from branches, functional value system which ensures transparency of market and informed ness of subjects. Policy of protection of economic competition is actively executed policy which contributes to maintenance of competitive environment, which eliminates obstacles that weaken competition. Within the frame of EU it is a coordinated policy. In Czech Republic economic competition is modified by economic competition law which is asserted by Board of protection of economic competition as central administrative authority. Authoress adverts to problems connected with protection of economic competition, e.g. in connection with verification of fusions, unfair competition, exploitation of dominating position in the market.
    Keywords: Economic competition; competition law; competition; competitive advantage; limitation of competition; market power; dominating position; fusion; unfair competition; Board of protection of economic competition.
    JEL: O11 O12
    Date: 2008–05–05
  6. By: Tyrowicz, Joanna; Wójcik, Piotr
    Abstract: In this paper we approach the issue of social cohesion across NUTS4 regions in Poland. We analyse regional dynamics of unemployment rates and try to evaluate the impact of Active Labour Market Policies (ALMPs) in observed trends. Using data for 1999 till 2008 we employ tools typically applied to income convergence analyses to test the stability of unemployment distribution - both unconditionally and taking into account explanatory power of unemployment structure and ALMPs in Polish regions. Our findings suggest no unconditional convergence understood both in terms of levels and in terms of dispersion, while the latter seems to suggest "convergence of clubs" within a group highest unemploy- ment regions. The analysis comprised as well accounting for potential impact of ALMPs, controlling for dierentiated unemployment structure. We find no evidence that cohesion eorts contribute to the convergence or less of the divergence phenomena.
    Keywords: regional unemployment rate differentials; convergence analysis; Poland
    JEL: R58 J43 E64 J18 R23
    Date: 2009
  7. By: Turvey, Calum G.; Kong, Rong; Belltawn, Burgen
    Abstract: This paper presents preliminary results on the possible demand for weather insurance in China. Results from 1,564 farm households from Western and Central China between October 2007 and October 2008 suggest that the greater risk for farmers is drought followed by excessive rain. Heat is less critical as a risk but more significant than cool weather. Results suggest a strong interest in precipitation insurance with 50% and 44% of respondents indicating strong interest in the product. Supplementary results indicate that interest is equal between planting, cultivating, and harvesting. Furthermore results suggest that farmers are willing to adopt new ideas, and where possible already take action to self insure through diversification and other means, The results are encouraging. Examples and discussion of how weather insurance can be implemented is included in the text.
    Keywords: weather insurance, rainfall insurance, China, Agricultural and Food Policy, Agricultural Finance, International Development, Risk and Uncertainty,
    Date: 2009–04–30
  8. By: Chen, Qihui
    Abstract: This paper investigates the determinants of academic achievement in basic education (grade 1-9) for a sample of children (aged 9-12 in 2000) from rural China. A set of instrumental variable generated by the Great Famine in China, 1958-1961, is used to instrument an error-ridden measure of child innate ability, the cognitive ability score of each sampled child. Empirical results indicate strong effects of family background variables such as household income and parental education. Fatherâs education has significantly positive effect on academic achievements for both boys and girls, while motherâs education only matters for girls. Consistent with the common findings in the literature, most of school quality variables do not have significantly positive effects on child academic achievements.
    Keywords: student achievement, school quality, ability, Famine in China 1958-1961, Consumer/Household Economics, Labor and Human Capital, Public Economics, J24, I21, D13,
    Date: 2009
  9. By: Lerman, Zvi; Sedik, David J.
    Abstract: The paper examines agricultural production and productivity growth in two Central Asian countries â Tajikistan and Uzbekistan. Both countries are characterized by a significant shift of resources from the traditional Soviet model of collective agriculture to more market-compliant individual and family farming. In both countries, the beginning of the policy-driven switch to family farming around 1997 coincided with the beginning of recovery in agriculture, namely resumption of agricultural growth after a phase of transition decline since 1991. In addition to growth in total agricultural production, we also observe significant increases in productivity of both land and labor since 1997. These observations suggest that productivity growth may be attributable to the changes in farming structure in Central Asia. To check this conjecture we assess the sources of growth by applying the standard Solow growth accounting methodology. Using time series of country statistics for farms of different organizational forms, we decompose the growth in output into growth in the resource base (extensive growth) and growth in productivity (intensive growth). Solow growth accounting clearly shows that, first, much of the growth at the country level is attributable to increases in productivity rather than increases in resources and, second, the increases in productivity in family farms (especially household plots) outstrip the increases in productivity in former collective and state farms. These findings confirm that the recovery of agricultural production in Central Asia has been driven largely by productivity increases, and it is the individual farms that are the main source of agricultural productivity increases.
    Keywords: agricultural productivity, agricultural growth, family farms, corporate farms, comparative performance, agrarian reforms, transition countries, Central Asia, Tajikistan, Uzbekistan, Agricultural and Food Policy, Institutional and Behavioral Economics, Land Economics/Use, Productivity Analysis, P27, P31, P32, Q15, R14,
    Date: 2009
  10. By: Gerasimchuk, Ivetta
    Abstract: Russia’s direct investment of about USD 3 billon in Southern Africa over the past decade has placed before the country’s government and corporate sector two choices in the accelerating race among foreign investors into Africa. The first choice is to follow the established path of direct investment from developed economies that has, in the words of a famous African leader Walter Rodney, ‘underdeveloped Africa’ and involved a serious negative environmental impact. The second choice is one that corresponds with the former Soviet Union’s policy of mutually advantageous cooperation with Africa. In the current context, this will prove possible only through joint cooperation to achieve environmental sustainability and economic diversification requiring long-term planning and innovation. The purpose of this interdisciplinary empirical research paper is to investigate the current and future state of environmental practices in joint ventures between Russia and Southern Africa as compared with other patterns of cooperation among emerging market economies.
    Keywords: Russia; FDI; investment; Southern Africa; SADC; sustainable development; leapfrogging development; natural resources
    JEL: Q32 P33 O55 Q56
    Date: 2009–02
  11. By: Lerman, Zvi; Sedik, David J.
    Abstract: Farms in Tajikistan currently face a severe debt crisis that has been caused by a combination of two factors typical of such situations in many countries: (a) the inability of the farms to make a profit under current conditions and (b) continued lending by the banks to cotton producers regardless of reduced payment capacity and lack of credit-worthiness. The paper traces the accumulation of farm debt in Tajikistan to pervasive government intervention in both financing and production decisions, which has led to soft budget constraints and moral hazard behavior. The purpose of the paper is to inform the debate around the issue of cotton farm debt in Tajikistan by studying the experience of other countries that had to contend with farm debt overhangs in the 1980s and the 1990s. Five CIS transition countries (Belarus, Kazakhstan, Moldova, Russia, and Ukraine) and one market economy (Israel) are studied using time series of aggregate financial reports of the farm sectors. The comparative analysis shows that the farm debt issue is not strictly a transition economy phenomenon. The problem can occur in market economies (e.g., Israel) if the state pursues policies directed toward the expansion of farm production without heed to creditworthiness of the farms and if the farm structure is incompatible with profitability and efficiency criteria. The basic reasons that led to debt accumulation in CIS and in Israel remain valid to this day, and the policy solutions implemented in these countries are relevant for Tajikistan.
    Keywords: Farm debt, transition economies, Tajikistan, CIS, Israel, farm restructuring, agricultural reforms, Agricultural Finance, Institutional and Behavioral Economics, Q140, P210, P320, G300,
    Date: 2009
  12. By: Bazhanov, Andrei; Belyaev, Alexander
    Abstract: We compare the short- and the long-run consequences of Russia's Energy Strategy to 2020 and of the project of the Strategy to 2030 with a hypothetical scenario of the weak-sustainable oil extraction, starting from 2008 and providing asymptotically constant per capita consumption in the long run. The problem was examined by Andreeva, Bazhanov (2007) and Bazhanov, Tyukhov (2008) for the closed Dasgupta-Heal-Solow-Stiglitz model. In this paper, we show that the open-economy assumptions do not change the qualitative results of comparative analysis, which are not in favor of the Strategy in the long run.
    Keywords: weak sustainability; nonrenewable essential resource; Russia's Energy Strategy; open economy
    JEL: Q38 Q32 O22 Q01 O21 Q43
    Date: 2009–05–07
  13. By: Menon, Jayant (Asian Development Bank)
    Abstract: Viet Nam has experienced spectacular economic growth over the past decade, in part the result of massive foreign direct investment (FDI) inflows. Although much has been written on the impacts of FDI in developing countries, previous studies have generally ignored macroeconomic consequences in cost-benefit assessments. These macroeconomic aspects can be particularly important in transitional economies like Viet Nam, where some of the tools for macroeconomic stabilization may be blunt or unavailable. First, capital inflow growth needs to be accommodated by real exchange rate appreciation. In dollarized economies like Viet Nam, the nominal exchange rate cannot be relied upon to deliver it, so inflation usually results. In these economies, it is also difficult for the central bank to conduct open market operations to sterilize large capital inflows or mop up excess liquidity. Again, this could feed inflation. The combination of a young and inexperienced banking system and an investment-hungry state-owned enterprises (SOE) sector only exacerbates the situation, and increases the risk of imbalances that could result in crisis.
    Keywords: capital inflow; macroeconomic adjustment; FDI; real exchange rate; Viet Nam
    JEL: F21 F32 F49
    Date: 2009–04–01
  14. By: Chen, Xi; Zhang, Xiaobo
    Abstract: Xi Chen acknowledges generous Doctoral Research Grant from the Institute for the Social Sciences at Cornell University and precious data set provided by the Development Strategy and Governance Division at IFPRI. Conference Travel Grant provided by the Department of Applied Economics and Management at Cornell is also acknowledged. We are grateful to Ravi Kanbur for invaluable comments, guidance and encouragement. This paper also benefited from helpful discussion and invaluable comments from Robert Frank, David Sahn, Marc Rockmore, and seminar participants in the Department of Economics at Cornell. Due to time limit, I have not incorporated all helpful comments and suggestions in this early draft paper. The views expressed herein and any remaining errors are the authorâs and do not represent any official agency.
    Keywords: Blood Donation, Social Status, Poverty, Inequality, Relative Deprivation, Rural China, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Demand and Price Analysis, Health Economics and Policy, Institutional and Behavioral Economics, International Development, Labor and Human Capital, Political Economy, Production Economics, Public Economics, Research Methods/ Statistical Methods, Risk and Uncertainty, I32, J22, D13, D63,
    Date: 2009–05
  15. By: Carletto, Calogero; Kilic, Talip
    Abstract: The contribution of return migrants to economic development in source countries can be significant. Overseas savings of returnees may lead to improvements in household welfare and provide liquidity for investments in the face of credit market failures. Labor market experience and skills acquired abroad may also lead migrants to find occupations higher in the skill and remuneration spectrum upon return. This study uses the 2005 Albanian Living Standards Measurement Study Survey and estimates the impact of international migration experience on the occupational mobility of return migrants vis a vis working-age Albanian residents that never migrated. Controlling for the non-random nature of international migration and return, the results show that past migration experience increases the likelihood of upward occupational mobility. Exploring the heterogeneity of impact by host country indicates that the positive effect of past migration experience on upward occupational mobility is driven by past migration experience in Italy and countries further a field, while past migration experience in Greece does not exert any significant impact on mobility outcomes. The results, which are consistent across different sample specifications and outcome variables measuring occupational mobility, hint at the link between migration and human/financial capital formation among migrants and foster optimism concerning the positive effect of return migration on economic development. This insight is particularly important since remittances from permanent migrants, which have fueled the impressive growth performance of the country in the recent era, may taper off in the medium to long term with the decline in out-migration and growing global economic woes.
    Keywords: Population Policies,Labor Markets,Voluntary and Involuntary Resettlement,Human Migrations&Resettlements,Debt Markets
    Date: 2009–04–01
  16. By: Paul Mosley (Department of Economics, The University of Sheffield); Altay Mussurov
    Abstract: The extent of poverty reduction has varied enormously during the recovery period across the eighty-three regions of Russia, with some regions continuing to experience increases in poverty even though they have returned to growth. We attempt to understand and analyse the reasons for this regional variation. We focus on two principal causative factors: the changes in economic structure resulting from the liberalisation of the economy, and policy instruments aimed at poverty reduction. We find that many regions which experienced structural change under perestroika (notably those benefiting from the current oil and gas boom) experienced massive growth in GDP but little poverty reduction, because their prevailing production function is capital-intensive and thus they were unable to transmit much or any reduction in poverty through the labour market. Regions where the growth of the early 2000s was diversified, was based more on the service sector, and where the educational system made possible flexibility within the labour market, tended to be more effective at generating poverty reduction.
    Keywords: Russia, poverty, regional analysis
    JEL: I32 P26
    Date: 2009–04
  17. By: Nicolas Drouin Deziel (GREDI, Faculte d'administration, Université de Sherbrooke); Jie He (GREDI, Faculte d'administration, Université de Sherbrooke); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: L’estimation des coûts liés à l’imposition de limites aux émissions de gaz à effet de serre (GES) a fait l’objet de beaucoup d’attention médiatique dernièrement. La Chine étant un des plus grands émetteurs de GES, l’évaluation des coûts pour l’économie chinoise est donc primordiale. Dans ce travail, nous évaluons le coût de l’imposition d’une taxe sur les émissions de CO2 à l’aide d’un modèle d’équilibre général calculable de l’économie chinoise. Le modèle permet la substitution des intrants énergétiques. L’intrant énergie est décomposé en quatre sources à savoir l’électricité, le pétrole, le charbon et le gaz. Les émissions de CO2 sont directement liées à la consommation des combustibles fossiles. Le cadre chinois est particulier par son utilisation intensive du charbon comme source d’énergie. La question est évaluée à travers des taxes sur les émissions de CO2. La taxe sur les émissions de CO2 permettrait d’abaisser les émissions chinoises totales de 5,2%, l’objectif général de réduction des émissions du Protocole de Kyoto. Nous analysons aussi un choc sur les prix mondiaux du pétrole ainsi qu’une combinaison de ces deux chocs. Les possibilités de substitution particulières au contexte chinois permettraient de réduire les émissions à relativement peu de coûts.
    Keywords: China, Global warming, environmental tax, CGE modeling
    JEL: Q53 D58 Q54 Q58
    Date: 2009–05–08

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