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on Transition Economics |
| By: | Svejnar, Jan; Uvalic, Milica |
| Abstract: | We examine the case of the Czech Republic, which has been frequently cited as one of the most successful cases of transition economies in Central and Eastern Europe (CEE). Despite the costs related to the break-up of Czechoslovakia in late 1992 and 1993, the immediate consequences were quickly absorbed and the country implemented the most important market-oriented reforms relatively successfully and faster than most other CEE countries. We first identify the initial conditions in the Czech Republic in 1989 and the development strategy adopted at the beginning of the transition. We then address the importance of international factors, including the role of trade opening, foreign direct investment, and external borrowing. We analyse the achievements and failures of the strategy with respect to both economic performance and progress with institutional reforms, as well as the reasons behind the resulting outcomes. This leads us to outline future challenges, including unfinished areas of reform. We conclude with lessons for other developing |
| Keywords: | transition economies, development policy, economic strategy |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:rp2009-17&r=tra |
| By: | Popov, Vladimir |
| Abstract: | Why many transition economies succeeded by pursuing policies that are so different from the radical economic liberalization (shock therapy) that is normally credited for the economic success of central European countries? First, optimal policies are context dependent, they are specific for each stage of development and what worked in Slovenia cannot be expected to work in Mongolia. Second, even for countries at the same level of development, reforms needed to stimulate growth are different; they depend on the previous history and on the path chosen. The reduction of government expenditure as a share of GDP did not undermine significantly the institutional capacity of the state in China, but in Russia and other CIS states it turned out to be ruinous. It is the growth diagnostics that should reveal the missing ingredient for economic growth. Finally, and most important, introducing this .missing ingredient. should not result in the destruction of other preconditions for growth. The art of the policymaker is to create markets without causing the government failure, as happened in many CIS countries. |
| Keywords: | transition, growth diagnostics, path dependence |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:rp2009-15&r=tra |
| By: | Yao, Yang |
| Abstract: | In the last 30 years, China has achieved high economic growth and successfully transformed its economy from a planned economy to a market-based system. The country, to a large extent, has attained success through the recommendations proposed by standard economic theory. However, the role of political economy has been omitted from the literature: how did China adopt the right economic policies and the appropriate road to reform? This paper attempts to answer this question. The central assumption of the paper is that China achieved success because the Chinese government has been a disinterested party, i.e., a government that does not favour any particular sections of the population and prioritizes the long-term welfare of the whole society. In this paper, we first define and analyse the concept of disinterested governments, and then proceed to provide several examples to demonstrate that China has been characterized by a disinterested government. Based on a theoretical model, we also discuss the reasons of the |
| Keywords: | Disinterested governments, the China miracle, econimic reform |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:rp2009-33&r=tra |
| By: | Naude, Wim; Rossouw, Stephanie |
| Abstract: | We use data on 3,948 Chinese firms obtained from the World Bank.s Investment Climate Private Enterprise Survey to investigate early international entrepreneurship (international new ventures) in China. The extent of early international entrepreneurship in China is significant: 65 per cent of the exporting firms start export operations within three years. Foreign shareholders within the firm and an entrepreneur with previous exporting experience are noted to significantly increase the probability that a firm internationalizes early. However, we find marked differences in the behaviour of indigenous and foreign-invested firms. Thus, while business networks are significant for firms wishing to export indirectly and for older indigenous firms, it is noted to delay the internationalization process of indigenous firms. Also, for an indigenous firm, the greater the foreign experience of its entrepreneur, the less likely it is to start exporting early. |
| Keywords: | entrepreneurship, internationalization, international new ventures, exports, China |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:rp2009-16&r=tra |
| By: | Barbara Despiney (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | The chapter concentrates on the positive development dynamics of "industrial districts" based on the network of Small an Medium-Sized firms in Poland.The crux of the matter is to establish whether or not industrial districts constitute a model for the regenaration of local and regional economies in Central European Countries. |
| Keywords: | regional development; industrial clusters; Poland |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00374435_v1&r=tra |
| By: | François Gardes (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Christophe Starzec (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | This paper analyzes characteristics of the informal economy in Poland in the context of transition, using a specific survey carried out in the framework of the classic Labour Force Survey, conducted by the Polish National Statistical office (GUS), in 1995. The participation probabilities of three types of informal activities (working, buying and hiring) are discussed. Their interdependencies are analyzed in the light of the hypothesis of network or neighborhood effects. The impact of a household's participation in informal markets on its regular consumption is estimated by imputing the probability of its informal activity in the consumption surveys and panels. Such participation does significantly influence more than half of household's expenditure on goods and services. Moreover, the participants of the informal economy distinguish themselves by higher individual full prices (integrating both monetary and non-monetary constraints and resources). |
| Keywords: | Informal economy ; consumer behavior ; cross-section-panel estimation |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00375543_v1&r=tra |
| By: | Delis, Manthos D; Pagoulatos, George |
| Abstract: | Abstract Following their EU15 counterparts, the banking systems of Central and Eastern European (CEE) countries underwent extensive reform since the 1990s. In this paper we estimate the degree of bank market power during the periods of financial reform in each European country, and subsequently we analyze the political and institutional sources of bank competition distinguishing between the EU15 and CEE subgroups. A linear pattern in the relationship between bank competition and institutional strength is demonstrated for the EU15 group of countries, while for the CEEs this pattern is non-linear. Therefore, we suggest that relatively underdeveloped banking systems, in less advanced politico-institutional milieus, overall fail to benefit from reforms in their early stages. As a policy implication the results imply that a certain level of institutional maturity, combined with openness to foreign investors, is a precondition for reforms aiming at enhancing competition and efficiency of banking markets. |
| Keywords: | Bank competition; Financial reforms; Institutional development; European Union; Central and Eastern European countries |
| JEL: | C10 P51 P34 G21 |
| Date: | 2009–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16494&r=tra |
| By: | John Knight; Sai Ding |
| Abstract: | China has had a remarkably high ratio of investment to output throughout the period of economic reform, surpassing almost all other economies, whether developed or developing. The high investment rate is in turn an important proximate determinant of China’s high rate of economic growth. This survey paper gathers together the available evidence to explain why investment is so high. It considers factors both on the demand and on the supply side, and in the latter case the availability both of resources and of funds. It analyses the rate of return on capital and its movement over time, and the factors which have kept it up. It draws on the literature to explain the high saving rate, and considers why the imperfect capital market and institutional deficiencies have not constrained investment. The state-owned and the private sectors are treated separately on account of their different objectives and behaviour and their differential access to funds. |
| Keywords: | China, Financial market, Credit constraint, Investment, Rate of profit, Saving |
| JEL: | E2 F1 O5 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:441&r=tra |
| By: | Agoraki, Maria-Eleni; Delis, Manthos D; Pasiouras, Fotios |
| Abstract: | This study investigates whether regulations have an independent effect on bank risk-taking or whether their effect is channeled through the market power possessed by banks. Given a well-established set of theoretical priors, the regulations considered are capital requirements, restrictions on bank activities and official supervisory power. We use data from the Central and Eastern European banking sectors over the period 1998-2005. The empirical results suggest that banks with market power tend to take on lower credit risk and have a lower probability of default. Capital requirements reduce risk in general, but for banks with market power this effect significantly weakens. Higher activity restrictions in combination with more market power reduce both credit risk and the risk of default, while official supervisory power has only a direct impact on bank risk. |
| Keywords: | Banking sector reform; regulations; competition; risk-taking; CEE banks |
| JEL: | G38 G32 G21 |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16495&r=tra |
| By: | Kolodko, Grzegorz W. |
| Abstract: | Progress in achieving institutional changes should be evaluated through the prism of their influence on the development abilities of the relevant country. In Poland, during 20 years of comprehensive systemic shift, GDP increased more than in any other postsocialist country. To judge the transformation progress, it is not enough to review improvements in competitiveness or in growth in terms of quantity, but also social and cultural aspects should be taken into account. In Poland, there have been five distinct periods from the viewpoint of economic growth. Had there been a better policy coordination of systemic change and socioeconomic development, GDP growth over the periods considered could have increased by more than half. This opportunity was missed because of the intermittent implementation of wrong economic policies based on wrong economic theories. Poland.s transformation can be seen as a success, but only to the extent of |
| Keywords: | transformation, economic growth, development, institutions, economic policy, postcommunist period, Poland |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:rp2009-14&r=tra |
| By: | Dominique Guegan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Jing Zhang (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, ECNU - East China Normal University) |
| Abstract: | This paper develops the method for pricing bivariate contingent claims under General Autoregressive Conditionally Heteroskedastic (GARCH) process. In order to provide a general framework being able to accommodate skewness, leptokurtosis, fat tails as well as the time varying volatility that are often found in financial data, generalized hyperbolic (GH) distribution is used for innovations. As the association between the underlying assets may vary over time, the dynamic copula approach is considered. Therefore, the proposed method proves to play an important role in pricing bivariate option. The approach is illustrated for Chinese market with one type of better-of-two-markets claims : call option on the better performer of Shanghai Stock Composite Index and Shenzhen Stock Composite Index. Results show that the option prices obtained by the GARCH-GH model with time-varying copula differ substantially from the prices implied by the GARCH-Gaussian dynamic copula model. Moreover, the empirical work displays the advantage of the suggested method. |
| Keywords: | Call-on-max option - GARCH process - generalized hyperbolic (GH) distribution - normal inverse Gaussian (NIG) distribution - copula - dynamic copula |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00368336_v1&r=tra |
| By: | Thoburn, John |
| Abstract: | Vietnam.s development performance since the early 1990s has been one of the strongest in the world, following the introduction of its doi moi (.renovation.) economic reform programme in 1986. The core of Vietnam.s economic strategy has been rapid integration into the world economy, with a diversified portfolio of exports and the attraction of direct foreign investment. This open approach has been combined with successful domestic agricultural growth and a strong, continued role for state-owned enterprises while encouraging growth of the private sector. Following an .East Asian. model, Vietnam has opened its domestic market only slowly while encouraging export growth. |
| Keywords: | Vietnam, globalization, trade, poverty, economic reform, development |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:rp2009-30&r=tra |
| By: | Csaba, Laszlo |
| Abstract: | This paper offers a broad overview of the Hungarian development strategy over the past two decades. Combining historical and functional analysis, some major strengths and weaknesses are identified, with special emphasis on the country.s open-door policies and the role played by the European Union. The paper investigates why the impetus of institutional and financial integration was lost by about 2004 when policy drifting took over the role of strategies. Some ideas on how to remedy the situation are being offered. Paradoxically, the Hungarian success and failure both testify to the relevance of a neo-institutionalist/political economy approach to sustainable development. It also examines the limitations of external anchoring by the EU as well as of the spontaneous bottom-up evolution of institutions when policy drifting continues. |
| Keywords: | structural reform, sustainability, EU accession, regulation, FDI, trust |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:rp2009-13&r=tra |