nep-tra New Economics Papers
on Transition Economics
Issue of 2011‒07‒21
twenty-one papers chosen by
J. David Brown
Heriot-Watt University

  1. Economic Planning in China By Gregory C. Chow
  2. Public Administration Europeanization. South-Eastern European Trends and Comparative Analysis By Matei, Lucica
  3. Sir Robert Giffen Meets Russia in Early 1990s By Yochanan Shachmurove; Janusz Szyrmer
  4. Self-employment of rural-to-urban migrants in China By Giulietti, Corrado; Ning, Guangjie; Zimmermann, Klaus F
  5. Water Service Delivery Reform in China: Safeguarding the Interests of the Poor By Denis Nitikin; Chunli Shen; Qian Wang; Heng-fu Zou
  6. Land Taxation in China: Assessment of Prospects for Politically and Economically Sustainable Reform By Denis Nitikin; Chunli Shen; Qian Wang; Heng-fu Zou
  7. The Real Exchange Rate and Employment in China By Mai Dao; Ruo Chen
  8. Use of Banking Services in Emerging Markets--Household-Level Evidence By Beck, Thorsten; Brown, Martin
  9. Relevance of "Western European public administration reforms" on Transition countries - ‘who learns what from whom? By CIPOLLETTA, Germano; FIORANI, Gloria; MATEI, Lucica; MENEGUZZO, Marco; MITITELU, Cristina
  10. Determinants of credit-less recoveries By Martin Bijsterbosch; Tatjana Dahlhaus
  11. A Cellular Automata Simulation of the 1990s Russian Housing Privatization Decision By Maria Plotnikova; Chokri Dridi
  12. Convergence of the policies for promoting total quality management in the public administrations of Balkan states - European Union Member S tates By MATEI, Ani; SĂVULESCU, Carmen
  13. A convergence-sensitive optimum-currency-area index By Michal Skořepa
  14. Administrative Europeanization and Institutional Change: the Case of C roatia By ILIJAŠIĆ-VERŠIĆ, Ivana; SMOKROVIĆ, Nenad
  15. How Wages and Employment Adjust to Trade Liberalization: Quasi-Experimental Evidence from Austria By Marius Brülhart; Céline Carrere; Federico Trionfetti
  16. Bulgarian administration under the conditions of joining the European Administration Space (EAS) By Nachev, Ivan
  17. The application of the principle of transparency in the decision-making process of public institutions. Case study: Romanian Ombudsman, Public Prosecutor's Office and the Committee on Petitions of the Parliament of Romania. By Radulescu, Crina
  18. A Model of the Housing Privatization Decision: The Case of Russia By Maria Plotnikova
  19. The People’s Republic of China and India: Commercial Policies in the Giants By Wignaraja, Ganeshan
  20. Questioning Financial Indicators of Civil Society Development By MANCE, Davor; VAŠIČEK, Davor
  21. Convergence of Local Administration in Croatia - Insight into LG Pract ices By Kastelan Mrak, Marija

  1. By: Gregory C. Chow (Princeton University)
    Abstract: This paper provides an up-to-date study of economic planning in China as it affects the economic development, growth and fluctuations of the Chinese economy. Although economic planning has been practiced in China since 1953 when the first Five-Year Plan began, its nature has changed after economic reform started in 1978. Market reform reduced the importance of central planning, but more recently the global economic recession and China’s active macro-economic policy interventions have increased the importance of economic planning. Our discussion is divided into the following sections: 1. Role of planning in the Chinese economy. 2. Scope of planning. 3. Numerical targets of the Plan and the degree to which the targets are met. 4. Organization of the NCDR. 5. How a plan is implemented. 6. Effects of planning on China’s economic development.
    Keywords: China, Chinese economy, growth, planning, five year plans, market reforms
    JEL: E21 E20 F14 N15 P20
    Date: 2011–06
  2. By: Matei, Lucica
    Abstract: Europeanization, as global process, undergoes an increasing enlargement, comprising both EU Member States and South-Eastern European states. The geo-political aspects and democratic traditions influence directly the Europeanization process, conferring both national specific elements and issues of compatibility, thus triggering various convergence levels for the social reform processes, determined by Europeanization. Referring to public administration, the actual study achieves a comparative analysis on the fundamental processes of democratization and enhancement of effectiveness in the context of deepening the Europeanization process of public administration and civil service in the European states. The analysed target group comprises Balkan states (Romania, Bulgaria), Western Balkan states (Albania, Bosnia and Herzegovina, Croatia, Macedonia, Serbia, Slovenia, and Montenegro) as well as states that belonged to the former Soviet Union (Armenia, Moldova, Ukraine and Belarus). The main criteria of analysis refer to assessing the democratic processes, central and local governance, integrity and corruption, as well as civil service. The research methods take into account relevant bibliographical research as well as evaluations and socio-statistic analyses.
    Keywords: civil service; integrity and corruption; central and local governance; democratic processes; South-Eastern Europe; Europeanization
    Date: 2011
  3. By: Yochanan Shachmurove (Department of Economics, University of Pennsyslvania and The City College of The City University of New York); Janusz Szyrmer (CASE-Ukraine, Kiev)
    Abstract: This paper analyzes the theoretical foundations of Giffen goods and details the difficulty with which prior studies have encountered limited empirical proof of Giffenity. Subsequently, a discussion of the economic overview of Russia during the early 1990s is provided. The paper then applies Giffenity to the newly established free market system of post-Soviet Union Russia while acknowledging changes in the prices for goods, specifically, for inferior food commodities. The paper concludes by advocating for the need to incorporate Giffenity into current economic theory to make it more comprehensive.
    Keywords: Giffen goods, inferior goods, subsistence, Russia, household consumption, post-soviet transition
    JEL: D1 E2
    Date: 2011–07–01
  4. By: Giulietti, Corrado; Ning, Guangjie; Zimmermann, Klaus F
    Abstract: This paper focuses on the determinants of self-employment among rural to urban migrants in China. Two self-selection mechanisms are analysed: the first relates to the manner in which migrants choose self-employment or paid work based on the potential gains from either type of employment; the second takes into account that the determinants of the migration decision can be correlated with employment choices. Using data from the 2008 Rural-Urban Migration in China and Indonesia (RUMiCI) survey, a selection model with endogenous switching is estimated. Earnings estimates are then used to derive the wage differential, which in turn is used to model the employment choice. The procedure is extended to account for migration selectivity and to compare individuals with different migration background and employment histories. The results indicate that self-employed individuals are positively selected with respect to their unobserved characteristics. Furthermore, the wage differential is found to be an important driver of the self-employment choice.
    Keywords: European Union; rural to urban migration; selection bias magnets; self-employment; wages
    JEL: J23 J61 O15
    Date: 2011–07
  5. By: Denis Nitikin (The World Bank); Chunli Shen (University of Maryland); Qian Wang (San Francisco State University); Heng-fu Zou (Central University of Finance and Economics CEMA; Wuhan University IAS; Peking University; China Development Bank)
    Abstract: China faces a water scarcity problem that is severe by international standards. Many factors, including rapid urbanization and environmental degradation etc, have been challenging the water service delivery in China. Since water scarcity and quality have impact on the poor, reforms to the water service provision can produce substantial improvements in the living standard of the economically disadvantaged groups. The objective of this study is to critically evaluate the strengths and weakness of China¡¯s current water financing and delivering system, with a focus on safeguarding the interests of the poor, and to offer insight into possible solutions.
    Keywords: water administration, water pricing, water financing
    JEL: Q25 I31
    Date: 2011–04
  6. By: Denis Nitikin (The World Bank); Chunli Shen (University of Maryland); Qian Wang (San Francisco State University); Heng-fu Zou (Central University of Finance and Economics CEMA; Wuhan University IAS; Peking University; China Development Bank)
    Abstract: The emerging land-related unrest in China poses a pressing challenge on the legitimacy of the government. Through the perspective of good governance, the paper examines the role of land in government financing and its economic and political cost, as well as the erosion of government¡¯s credibility and its negative impact on private and collective property rights. The paper emphasizes the recent upward trend in land-related unrest as a consequence of abuses by local governments on land-source revenues. Our special concern rests on the institution of collective property which is slowly emerging from the shadow of the former state property in the course of economic transition. Collective property right could be a useful legal and economic institution but must receive political support to exist alongside with private property.
    Keywords: land tax, property tax, land-related revenue, land administration
    JEL: H20 H27
    Date: 2011
  7. By: Mai Dao; Ruo Chen
    Abstract: We examine the impact of real exchange rate fluctuations on sectoral and regional employment in China from 1980 to 2008. In contrast to theoretical predictions, employment in both the tradable and non-tradable sectors contracts following a real appreciation. Our results are robust across different sub-samples, levels of sectoral disaggregation, and are more pronounced for regions with higher export exposure. We attribute our findings to the importance of services as intermediate input in exportable production. We test this channel of exchange rate transmission using regional input-output tables linked with employment data at the region-sector level. The results of this paper have important implications for China’s labor market adjustment should the Chinese RMB strengthen in the future. To mitigate the costs of short-run labor market adjustment, appropriate demand management and structural reforms in the non-traded sectors should play an important role.
    Keywords: China , Economic models , Employment , Labor markets , Real effective exchange rates ,
    Date: 2011–06–27
  8. By: Beck, Thorsten; Brown, Martin
    Abstract: This paper uses survey data for 60,000 households from 29 transition economies in 2006 and 2010 to explore how the use of banking services is related to household characteristics, as well as to bank ownership, deposit insurance and creditor protection. At the household level we find that the holding of a bank account, a bank card, or a mortgage increases with income and education in most countries and find evidence for an urban-rural gap. The use of banking services is also related to the religion and social integration of a household as well as the gender of the household head. Using the within-country variation between 2006 and 2010, we find that the privatization of state-owned banks and an increase in market share of foreign banks are associated with a stronger use of banking services. Foreign bank ownership is also associated with a higher use of bank services among highincome households and households with formal employment. State ownership, by contrast is hardly associated with more outreach to poorer households. More generous deposit insurance and stronger creditor rights also foster the use of banking services among the urban, rich, better educated and formally employed.
    Keywords: access to finance; bank ownership; creditor protection; deposit insurance; household finance
    JEL: G18 G2 O16 P34
    Date: 2011–07
  9. By: CIPOLLETTA, Germano; FIORANI, Gloria; MATEI, Lucica; MENEGUZZO, Marco; MITITELU, Cristina
    Abstract: Prevailing opinions by OECD advisers addresses the process of changes in PA and the efforts towards ‘harmonization' between the domestic patterns and the new transferred principles of modernization as NPM - an universal panacea for the problems of public administrations in transition countries, without paying substantial attention to the relevant implementation gaps for some levels as well as areas of reform. Aiming to verify the ‘convergence' of NPM principles in different national contexts, the ‘lessons learned' from different awarding initiatives supporting innovation exchange programs between the central governments and other joint initiatives between Italy and Romania as examples of cooperation programs for modernization of the public sector are analyzed. The study reviews, beyond certifying the quite different institutional backgrounds and administrative cultures in both countries:1) the markedly features of the public sector innovation programs, drivers and reform trends; 2) the ‘common steps' and ‘who learns what from whom?' in last two decades of rapid ‘public management innovation strategy', exchanged between the OECD- EU countries and the reformers in post-communist countries. Although, the importance of moving away from traditional structures towards a more efficient and accountable management system as well as the challenges arising from dichotomy between Western convergence and transition country-specific restructuring of the public sector are of primary importance.
    Keywords: Romania; Italy; modernization; learning transfer; Public Administration reforms
    Date: 2011
  10. By: Martin Bijsterbosch (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Tatjana Dahlhaus (Universitat Autònoma de Barcelona, Spain.)
    Abstract: This paper aims to shed light on the characteristics and particularly the determinants of credit-less recoveries. After building a dataset and documenting some stylised facts of credit-less recoveries in emerging market economies, this paper uses panel probit models to analyse key determinants of credit-less recoveries. Our main findings are the following. First, our frequency analysis confirms earlier findings that credit-less recoveries are not at all rare events. Moreover, our analysis shows that the frequency of credit-less recoveries doubles after a banking or currency crisis. Second, results from estimated panel probit models suggest that credit-less recoveries are typically preceded by large declines in economic activity and financial stress, in particular if private sector indebtedness is high and the country is reliant on foreign capital inflows. Finally, we find that the predicted probability of a credit-less recovery in central and eastern European EU Member States during the coming years varies across countries, but is relatively high in the Baltic States. JEL Classification: C23, C25, E32, E51, G01.
    Keywords: Credit-less Recoveries, Financial Crises, Panel Probit Models.
    Date: 2011–06
  11. By: Maria Plotnikova (Department of Economics, University of Reading); Chokri Dridi (Department of Rural Economy, University of Alberta)
    Abstract: The study uses a computational approach to study the phenomenon of housing privatization in Russia in the 1990s. As part of the housing reform flats in multi-family buildings were offered to their residents free of payment. Nevertheless rapid mass housing privatization did not take place. While this outcome admits a number of explanations this analysis emphasizes the fact that the environment in which the decision-making households were operating had a high degree of uncertainty and imposed a high information-processing requirement on the decision-makers. Using the bounded rationality paradigm, the study builds a case for a cellular automata simulation of household decision-making in the context of housing privatization reforms in Russia in the 1990s. Cellular automata is then used to simulate a household’s decision to become the owner of its dwelling.
    Keywords: cellular automata, complex systems, housing reform, Russia, simulation
    JEL: C45 C63 P21 R21
    Date: 2010–08–01
  12. By: MATEI, Ani; SĂVULESCU, Carmen
    Abstract: In the past three decades, total quality management (TQM) has been appreciated as "fundamental modality in view to improve the activity in the public and private sectors" (Boyne and Walker, 2002, 1). For the time being, in public administrations, we witness an extension of the policies for promoting TQM, although the experiences have not always been positive. The European Administrative Space (EAS) incorporates TQM, in different manners at national level, taking into consideration its recognised impact on the efficiency of public administration, one of EAS fundamental principles (Zurga, 2008, 39-49). In the context of analysing EAS evolution, the administrative convergence will also comprise the convergence of TQM policies. In fact, the field literature (Hackman and Wageman, 1995) reveals, in the context of national TQM policy-making, the concepts of "Convergent validity" and "Discriminant validity", reflecting "the degree to which the version of TQM promulgated by the founders and observed in organizational practice share a common set of assumptions and prescriptions" (Hackman and Wageman, 1995, 318-319). By a comparative analysis on TQM policies in the national public administrations of Balkan states, EU Member States: Greece, Cyprus, Slovenia, Bulgaria and Romania, the current paper aims to reveal the level of their convergence as well as the theoretical consistency of the conceptual and practical framework for TQM assertion. The comparative analysis will be based on a comprehensive vision on TQM, provided by Dean and Bowen (1994), Boyne and Walker (2002), namely its approach should be characterised on own principles, practices and techniques, grouped on customer focus, continuous improvement and team work (Boyne and Walker, 2002, 4-5). The tradition on promoting TQM in public administration in the above-mentioned states is relatively recent: since 1990s - Cyprus, since 1995 - Greece and Slovenia, since 2000 -Bulgaria and Romania. However, in the context of the EU membership and EAS enlargement to the Balkans, their efforts for promoting TQM in public administration are marked by concrete actions, reflecting differentiated degrees of convergence. The current study will refer briefly to absolute convergence - assessed in relation to the founders' conception on TQM and comprehensively to the relative convergence - assessed by comparing the activities concerning TQM in the states under review .
    Keywords: European Union Member States; Balkan states; quality management; Conve rgence
    Date: 2011
  13. By: Michal Skořepa (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic; Czech National Bank)
    Abstract: A number of authors have used the concept of an optimum currency area (or OCA) index to assess the relative proximity of various pairs of economies to the ideal of an optimum currency area. Alas, a significant deficiency of this approach as used so far is that it provides no room for long-term real income convergence - a frequently observed process that can be viewed as a specific type of long-term asymmetric shock. In this paper, a novel way to construct the OCA index is suggested that is sensitive to any real convergence (or divergence) between the two economies under study. Estimation of this convergence-sensitive OCA index for a sample of OECD economies yields an intuitively plausible result: real convergence gains on significance within the OCA index after an initial sample, a group of advanced OECD economies, is broadened with a group of emerging economies. Applied to the 2001-2008 period, the convergence-sensitive index shows a few Central and Eastern European late-transition economies to be better prepared for a common currency with Germany than several current euro area members.
    Keywords: optimum currency area, OCA index, real convergence, real exchange rate, trend appreciation
    JEL: E58 F15 F31 O2
    Date: 2011–07
    Abstract: Preparing for EU membership requires changes across a wide range of sectors in many of the institutions and organisations involved in the public governance and legislative enforcement processes. Criteria that every candidate country has to undertake in the process of accession, known as "Copenhagen criteria", can be summed down to political, economical and administrative requirements in order to fully adopt, implement and comply with the Community acquis. The administrative criteria (also known as Madrid criteria) requires from the candidate country to be able to create conditions for adjustment of national governance structure to the EU public governance mechanisms. This requires modernisation of their administrations taking into account the principles of professionalism and neutrality. Transition and EU enlargement deeply rely on capacities and quality of common and national institutions responsible for enforcement and conduct of development policies. In the very core of this adaptation process lays the institutional change and convergence. Institutions create motivational structures for individuals and organisations, and coordinate their activities and behaviour. Although institutions have to provide envisaged and coherent rules, sometimes there is a need for institutions to change and adapt to social preferences, technology, political and socio-economic structures and external factors. Many challenges in Croatian public administration rise from inadequate education, insufficient monitoring of employees' performance, and high level of political impact, lack of organisational culture, true values, paternalism and no orientation toward a citizen. There is no defined development strategy in public governance. The number of state officials is extremely high. Nevertheless, the government has foreseen seize of public administration growth, horizontal decentralisation, rationality and sound economic behaviour in the accession to EU. It is highly important because public administration is the one to carry the burden of legislative reform within the country. European Commission objects Croatia the weakness of its institutions indebted for efficient cooperation with International Court of Justice and conduct of obligations from international agreements. For the past few years EU-Croatia Parliamentary Committee has adopted several Declarations and Recommendations all stating that Croatia demonstrates continuous progress and efforts in the area of judicial and public administration reform, but also has to pursue strengthening the administrative capacity, not only to implement adopted reforms, but to secure that it can benefit fully from increased financial assistance. It is also observed that Croatia's improved institutional rules for the functioning European Union will facilitate the accession once all criteria have been met.
    Keywords: challenges; enlargement; administration; convergence
    Date: 2011
  15. By: Marius Brülhart (HEC - LAUSANNE - École des HEC, Université de Lausanne Département d'économétrie et économie politique - Université de Lausanne); Céline Carrere (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Federico Trionfetti (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579)
    Abstract: We study the responses of regional employment and nominal wages to trade liberalization, exploiting the natural experiment provided by the opening of Central and Eastern European markets after the fall of the Iron Curtain in 1990. Using data for Austrian municipalities, we examine differential pre- and post-1990 wage and employment growth rates between regions bordering the formerly communist economies and interior regions. If the 'border regions' are defined narrowly, within a band of less than 50 kilometers, we can identify statistically significant liberalization effects on both employment and wages. While wage responses preceded employment responses, the employment effect over the entire adjustment period is estimated to be around three times as large as the wage effect. The implied slope of the regional labor supply curve can be replicated in a new economic geography model that features obstacles to labor migration due to immobile housing and to heterogeneous locational preferences.
    Keywords: trade liberalization; spatial adjustment; regional labor supply; natural experiment
    Date: 2011–07–11
  16. By: Nachev, Ivan
    Abstract: Contemporary state administration is continuously challenged by the fast-changing national and international conditions. In modern states, administration on all levels of governance is continuously in the process of elaboration and adaptation to the changes that surround it. State administration does not exist for itself. It exists to serve the state and the society. Bulgaria's EU membership sets new higher standards for development to Bulgarian administrative system. In this context a priority task is building adequate administrative capacity both for realizing the set of reforms and effective maintaining of EU policies, and bettering the governance capacity of Community funding and securing a higher quality of administrative activity. Developing administrative capacity is an important requirement not only for the European administrative space membership, it is also a necessary condition for observing the principles of "good state governance" formulated in the White Book of the European Commission. Bulgaria aims at taking full-scale advantages from its membership in order to better its social-economic and societal development. In this context, the requirements involved as Community member face Bulgarian administrative system to ever bigger challenges. Therefore, the betterment of institutional and administrative capacity is of paramount significance for realizing the set of reforms and effective application of EU policies.
    Keywords: Bulgarian administration; European Administration Space
    Date: 2011
  17. By: Radulescu, Crina
    Abstract: Constitutional and legal framework: - Article 3, Romanian Constitution states the Right to information: "(1) A person's right of access to any information of public interest shall not be restricted. (2) The public authorities, according to their competence, shall be bound to provide correct information to the citizens in public affairs and matters of personal interest". - Article 1, Law No. 544 of 12 October 2001 regarding the free access to information of public interest, published in the Official Gazette of Romania No. 663 of 23 October 2001 -" The free and unrestricted access of any person at any piece of information of public interest, defined as such by this law, constitutes one of the fundamental principles of the relations between persons and public authorities, in accordance with the Constitution of Romania and with the international documents ratified by the Parliament of Romania." - Article 1, Law No. 52 of 21 January 2003 regarding the free access to information of public interest, published in the Official Gazette of Romania No. 70 of 3 February 2003 - „This Law establishes the minimal procedural rules applicable to ensure decisional transparency within central and local public administration authorities, elected or appointed, as well as of other public institutions that use public financial resources, in the relations established between them with the citizens and their legally established associations". Research focus: The article focuses on the presence of the transparency principle in the decision making process by analyzing the activity of several institutions, namely, the Romanian Ombudsman, the Public Prosecutor's Office and the Committee on Petitions of the Parliament of Romania and their relations with the citizens. All these three institutions mentioned above play an important role in the reform of the Romanian public administration. The first part of the article offers an analysis of the existing legislation and literature on the principle of transparency and the role the three institutions mentioned above play in sustaining this principle. The second part of the article consists of an exploratory empirical research of the Romanian Ombudsman, Public Prosecutor's Office and the Committee on Petitions of the Parliament of Romania and their relations with the citizens. It offers also an input on the interaction between the Romanian Ombudsman and the other two institutions. Our analysis deals with the 2004-2008 legislature and 2008-2010 (2008-2012 legislature). Research methodology: The methodology of the research is qualitative - analysis of the Ombudsman's annual reports, of the Public Prosecutor's Office activity and the reports of the Committee on Petitions of the Parliament of Romania.
    Keywords: ombudsman; right to information; transparency
    Date: 2011
  18. By: Maria Plotnikova (Department of Economics, University of Reading)
    Abstract: This study addresses the issue of housing privatization in Russia in the course of the 1990s. Privatization was started to create a housing market in order to efficiently allocate resources in the use and production of housing, and to phase out the state budget financing of housing. The dwellings were offered to their residents free of payment. The objective of this study is to offer a better understanding of the structural components of privatization by formally modeling housing privatization decision from the household point of view. The model is based on a trade-off between certain value of renting and uncertain value of owning. Using the results of the theoretical model, an empirical model of the privatization decision from the point of view of the household is formulated.
    JEL: P25 R21 P36 P21
    Date: 2010–08–30
  19. By: Wignaraja, Ganeshan (Asian Development Bank)
    Abstract: This paper analyses the link between commercial policies and exports through a comparative analysis of the Asian giants—the People’s Republic of China (PRC) and India. While the PRC has surged ahead of India to dominate world manufactured exports, India has acquired competitive capabilities in skill-intensive services. Favorable initial conditions such as large domestic markets and low-cost productive labor have laid the foundations for the giants’ export success. While the gradual switch to marketoriented commercial policies in the late 1970s drove trade-led growth in the giants, the PRC’s reforms were swifter and more coordinated. It has introduced an open door policy towards foreign direct investment (FDI), actively facilitated technological upgrading through FDI, steadily liberalized a controlled import regime, ensured a competitive exchange rate, and concluded more comprehensive free trade agreements (FTAs) with Asia’s developing economies. India has attempted to develop more effective commercial policies since 1991, especially to attract FDI and liberalize imports. Therefore, one might expect the gap in trade performance between the PRC and India to narrow over time. However, both giants face an uncertain world economic environment in the aftermath of the global financial crisis and future export success will depend on their evolving commercial policies. Critical issues that still to be resolved include how the giants will respond to the risk of protectionism, manage real exchange rates, promote the use of FTAs among businesses, and increase spending on infrastructure as well as research and development.
    Keywords: FTAs; free trade agreements; People’s Republic of China; India; commercial policy; trade
    JEL: F13 O24 O53 P33
    Date: 2011–06–01
  20. By: MANCE, Davor; VAŠIČEK, Davor
    Abstract: Until the introduction of the full accrual accounting concept in 2008, the system of governmental and private non-profit organizations in Croatia was very inconsistent, but nevertheless, withstood for a long number of years. Most of the changes were brought in for the purpose of adjusting our legislative regulations to the Acquis Communautaire. The Croatian accession to the European Union was used to implement reforms in various sectors, and also in the accounting for non-profit organizations. On January 1ST, 2008, a new accounting system was introduced, based on the application of the full accrual concept of revenues and expenses. As a result, the divergence of accounting systems for governmental and private non-profit organizations was significantly reduced. The reform results suggest that it is justified and reasonable, for all non-profit organization groups, to apply the same internationally comparable and acceptable rules of measurement and evaluation, recognition, and economic classification of revenues and expenses.
    Keywords: accrual accounting concept; Civil Society Development; Financial Indic ators
    Date: 2011
  21. By: Kastelan Mrak, Marija
    Abstract: Continuing on previous research, designed to explore the process of diffusion of project management in Croatian local administration, this paper proposes a discussion on the achieved level of development of administrative capabilities. In a way, it represents an attempt to explore the diffusion of innovative organizational practices and managerial techniques that could have an impact in the improvement of the efficiency, and thus of administrative capacity, of the Croatian public administration at city and county level. The paper consists of three parts: context overview, empirical research and discussion. The first part derives primarily from desk research and presents the factors that, to our view, have contributed to shaping the present state of organization of Croatian public administration. This part also provides the basic definitions of administrative capacity used in constructing our research. Considering the complexity (and vagueness) of the term New Public Management, we choose to concentrate our attention on project management as a specific organizational arrangement and method of tasks coordination. In the second part, we present some results obtained through field research. Data was obtained by using structured questionnaires addressed to 42 local government units (10 counties and 32 cities). The questionnaires were structured to provide information on the diffusion of project practices, the dominant areas of conducting project activities and level of formalization of project management. Even though statistic analysis does not offer definite conclusions, it does point out to the fact that new organizational arrangements are rather randomly diffused in Croatian local public administration, which might imply a rather fragmented strategic approach to administrative capacity development and poor and inconsistent system of managing organization development.
    Keywords: Local Administration; Convergence
    Date: 2011

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