nep-tra New Economics Papers
on Transition Economics
Issue of 2011‒08‒22
twelve papers chosen by
J. David Brown
Heriot-Watt University

  1. Labor Markets and Labor Market Institutions in Transition Economies By Lehmann, Hartmut; Muravyev, Alexander
  2. Do institutions matter for FDI spillovers ? the implications of China's"special characteristics" By Du, Luosha; Harrison, Ann; Jefferson, Gary
  3. Stakeholder dialogue as an institutional strategy for sustainable development in China : the case of community environmental roundtables By Wang, Hua
  4. The Impact of the Global Financial Crisis on Public Expenditures on Education and Health in the Economies of the Former Soviet Union By Alexander Chubrik; Roman Mogilevsky; Irina Sinitsina; Marek Dabrowski
  5. Services Policy Reform in the People’s Republic of China: Before and After the Global Financial Crisis By Fan, Ying
  6. Local Government Tax Effort in China: an Analysis of Provincial Tax Performance By Qian Wang; Chunli Shen; Heng-fu Zou
  7. A conditional full frontier modelling for analyzing environmental efficiency and economic growth By Halkos, George; Tzeremes, Nickolaos
  8. Economic growth and carbon dioxide emissions: Empirical evidence from China By Halkos, George; Tzeremes, Nickolaos
  9. "Wage Inequality and the Labor Market Impact of Economic Transformation: Croatia, 1970-2008" By Saul D. Hoffman; Ivo Bicanic; Oriana Vukoja
  10. Medium-term Management of Green Budget: The Case of Ukraine By Nelly Petkova; Rafal Stanek; Angela Bularga
  11. Economic structure, development policy and environmental quality : an empirical analysis of environmental Kuznets curves with Chinese municipal data By He, Jie; Wang, Hua
  12. The Impact of Legalized Abortion on Child Health Outcomes and Abandonment. Evidence from Romania By Mitrut, Andreea; Wolff, Francois-Charles

  1. By: Lehmann, Hartmut (University of Bologna); Muravyev, Alexander (IZA)
    Abstract: This paper summarizes the evolution of labor markets and labor market institutions and policies in the countries of Central and Eastern Europe as well as of Central Asia over the last two decades. The main focus is on the evolution of labor market institutions, which are among candidate explanations for the very diverse trajectories of labor markets in the region. We consider recent contributions that attempt to assess the effect of labor market institutions on labor market performance of TEs, including the policy-relevant issue of complementarity of institutions.
    Keywords: transition economies, unemployment, labor market institutions, labor markets
    JEL: J21 P20
    Date: 2011–08
  2. By: Du, Luosha; Harrison, Ann; Jefferson, Gary
    Abstract: The authors investigate how institutions affect productivity spillovers from foreign direct investment (FDI) to China's domestic industrial enterprises during 1998-2007. They examine three institutional features that comprise aspects of China's"special characteristics": (1) the different sources of FDI, where FDI is nearly evenly divided between mostly Organization for Economic Co-operation and Development (OECD) countries and Hong Kong (SAR of China), Taiwan (China), and Macau (SAR of China); (2) China's heterogeneous ownership structure, involving state- (SOEs) and non-state owned (non-SOEs) enterprises, firms with foreign equity participation, and non-SOE, domestic firms; and (3) industrial promotion via tariffs or through tax holidays to foreign direct investment. The authors also explore how productivity spillovers from FDI changed with China's entry into the WTO in late 2001. They find robust positive and significant spillovers to domestic firms via backward linkages (the contacts between foreign buyers and local suppliers). The results suggest varied success with industrial promotion policies. Final goods tariffs as well as input tariffs are negatively associated with firm-level productivity. However, they find that productivity spillovers were higher from foreign firms that paid less than the statutory corporate tax rate.
    Keywords: Emerging Markets,Debt Markets,Economic Theory&Research,Investment and Investment Climate,Labor Policies
    Date: 2011–08–01
  3. By: Wang, Hua
    Abstract: Stakeholder dialogue, as an alternative institutional strategy for environmentally and socially sustainable development, has received little attention from researchers and practitioners in developing countries such as China, even though the dialogue strategy can potentially lead public governance to a more efficient level. This paper first discusses the potential of stakeholder dialogue as an institutional tool for promoting sustainable development in China, and then presents a pilot program of stakeholder dialogue recently developed in China -- the community environmental roundtables. Community leaders organize roundtable dialogues where representatives from government agencies, companies and the local residents exchange their views toward certain environmental issues they are facing and discuss possible ways to resolve the issues. Informal agreements are reached during the dialogues and implemented after them. This community roundtable dialogue strategy has been piloted in dozens of Chinese municipalities, addressing various environmental issues. A survey of dialogue participants shows that significant impacts have been generated on environmental protection, community management, as well as social and institutional development at the community level. Mutual understanding and trust among the government, companies, and local citizens are enhanced, environmental and social conflicts are reduced, and the public performance of various parties has been improved. This approach is expected to help solve other conflicts and public governance issues in China as well. The potential challenges of institutionalizing such a program in China are also discussed in the paper.
    Keywords: Environmental Economics&Policies,National Governance,Governance Indicators,Parliamentary Government,Civil Society
    Date: 2011–08–01
  4. By: Alexander Chubrik; Roman Mogilevsky; Irina Sinitsina; Marek Dabrowski
    Abstract: This paper provides an overview of public expenditures on education and healthcare in Belarus, Georgia, Kyrgyzstan, Moldova, Russia, Ukraine and some other countries of the former Soviet Union before and during the global financial crisis. Before the crisis, the governments of these countries were substantially increasing spending on education and health. The crisis adversely affected the FSU countries and worsened their fiscal situation. The analysis indicates that during the crisis, despite the fiscal constraints, public education and health expenditures have mostly been maintained or increased in almost all of these countries. However, the crisis situation was not taken as an opportunity to address these countries’ key education and healthcare problems related to demographic changes, insufficient per capita expenditure levels, the low efficiency of public spending and the insufficient quality of services. These issues form an ambitious reform agenda for these countries in the medium- and long-term.
    Keywords: Fiscal policy, Former Soviet Union, Education financing, Health financing, Global economic crisis
    JEL: E62 H50 H51 H52 I18 I22
    Date: 2011
  5. By: Fan, Ying (Asian Development Bank Institute)
    Abstract: Adverse effects of the global financial crisis on international trade include falling demand, increased trade protectionism, and drying up of trade finance. Much attention has focused on the impact of the crisis on goods trade; however literature on its impact on services trade is limited, especially on the services trade in the People’s Republic of China (PRC). This paper analyzes the impact of the global financial crisis on the PRC’s services trade, discusses the government’s policy responses, and raises policy suggestions.
    Keywords: prc services policy; services trade; global financial crisis; international trade
    JEL: F13 F14
    Date: 2011–08–15
  6. By: Qian Wang (School of Public & Environmental Affairs (SPEA) Indiana University Bloomington); Chunli Shen (Central University of Finance and Economics); Heng-fu Zou (Shenzhen University, Wuhan University and Central University of Finance and Economics)
    Abstract: This paper aims to enhance the understanding of provincial tax performance in China, paying special attention to the recent fiscal reforms in the 1980s and in 1994. Using provincial panel data for the period 1986-2004, our analysis consists of two steps. First, a combined fixed time effects and random provincial effects model is used to analyze the statistical relationship between the tax share in GDP and economic and demographic variables. Results indicate that the decentralized fiscal system over the period 1986¨C1993 has had a positive impact on the tax share in GDP, whereas the recentralized fiscal system in the period 1994-2004 has had a negative impact. Second, provincial tax effort indices are calculated to estimate potential room for additional taxation. The findings from the analysis have important policy implications on the redistribution of fiscal resources as well as on the effectiveness of the tax administration.
    Keywords: Tax effort, Tax capacity, Fiscal reforms, Fiscal decentralization
    JEL: H20 H71 C23
    Date: 2011
  7. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: By applying conditional and unconditional data envelopment analysis (DEA) models along side with statistical inference using bootstrap techniques; this paper investigates the link between China’s carbon dioxide emissions (CO2) environmental efficiency and its economic growth (measured in GNI per capita) for the time period of 1965 to 2009. The results reveal that China’s changing consumption patterns has caused emissions levels to increase dramatically the last two decades providing clear evidence of a negative effect of China’s GNI per capita increase on its environmental efficiency.
    Keywords: Environmental efficiency; Economic growth; Carbon dioxide emissions; China; Data envelopment analysis; Conditional efficiency; Bootstrap procedures
    JEL: C14 Q56 O4 C60
    Date: 2011
  8. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: Using time series data, this paper investigates China’s carbon emissions during 1960-2006, with particular focus on the direct role of growth and in connection to trade and the value added by various sectors like agriculture, industry and services. Our empirical results indicate the presence of an inverted U-shaped curve between CO2 emissions and growth represented by the GDP per capita. Trade seems to be an important determinant in this relationship.
    Keywords: CO2 emissions; Economic growth; Trade; Environmental kuznets curve; China
    JEL: C51 O10 Q56 C22
    Date: 2011
  9. By: Saul D. Hoffman (Department of Economics,University of Delaware); Ivo Bicanic (Department of Economics,University of Zagreb); Oriana Vukoja (Department of Economics,University of Zagreb)
    Abstract: In this paper, we examine wage inequality and wage differentials in Croatia from 1970 to 2008 using two long aggregate time series on the distribution of income. We focus especially on changing income inequality related to educational and vocational attainment, changing income inequality within those groups, and how these two components of inequality were affected by the economic transformation from Socialism to capitalism. We find that income inequality between groups rose moderately post-transformation, while overall inequality increased more sharply. This finding is consistent with a growing importance of individual rather than group productivity in labor market compensation, a change broadly consistent with the economic transformation of the Croatian labor market.
    Keywords: Croatia, Economics of Transition, Inequality, Gini coefficient
    JEL: J3 P2 P23
    Date: 2011
  10. By: Nelly Petkova; Rafal Stanek; Angela Bularga
    Abstract: The purpose of this study is to examine the medium-term budget planning process in Ukraine and the extent to which this approach is used within the environmental sector. It aims to assist the Ukrainian government to integrate environmental programmes more effectively into overall programming, financial planning and budgeting practices which could result into more adequate and predictable allocations to the environment sector. The study also seeks to analyse the implications of the progressive shift in aid modalities towards sectoral and general budget support. This report was prepared within the framework of the OECD Task Force for the Implementation of the Environmental Action Programme for Central and Eastern Europe, Caucasus and Central Asia. The report also builds upon work that started within the OECD Task Team on Governance and Capacity Development for Natural Resource and Environmental Management, a joint Task Team of the OECD Development Assistance and Environmental Policy Committees. In addition, the report contributes to the debate on Green Growth, demonstrating the need for more adequate and well-costed environmental budgets, in the context of medium-term expenditure frameworks, as a means of promoting structural changes as part of the transition to green economy.
    Keywords: budget systems, Ukraine, direct budget support, environmental public expenditure management, environmental management, environmental investment programmes, development cooperation, medium-term budgeting, medium-term expenditure frameworks, Eastern Europe, Caucasus and Central Asia (EECCA)
    JEL: E61 H61 O13 O19 O52 P28 Q01 Q56 Q57
    Date: 2011–03–28
  11. By: He, Jie; Wang, Hua
    Abstract: In many cases, the relationship between environmental pollution and economic development can be generally depicted by an inverted U-shaped curve, or an environmental Kuznets curve, where pollution increases with income at the beginning and decreases after a certain level of income. However, what determine the shape of an enviornmental Kuznets curve, such as the height and the turning point of the curve, have not been thoroughly studied. A good understanding of the determinants is vitally important to the development community, especially for the developing world, where income growth is a high priority and yet environmental pollution also needs to be carefully controlled. This study analyzes the impacts of economic structure, development strategy and environmental regulation on the shape of the environmental Kuznets curve with a city-level panel dataset obtained from China. The results show that economic structure, development strategy and environmental regulation can all have important implications on the relationship between environmental environmental quality and economic development but the impacts can be different at different development stages.
    Keywords: Environmental Economics&Policies,Economic Theory&Research,Emerging Markets,Population Policies,Green Issues
    Date: 2011–08–01
  12. By: Mitrut, Andreea (Dept of Economics, Uppsala University and UCLS, Uppsala Center for Labor Studies; Dept of Economics, University of Gothenburg; Bucharest Academy of Economic Studies); Wolff, Francois-Charles (LEMNA, Université de Nantes, France; CNAV and INED, Paris, France)
    Abstract: We use household survey data and a unique census of institutionalized children to analyze the impact of abortion legalization in Romania. We exploit the lift of the abortion ban in December 1989, when communist dictator Ceausescu and his regime were removed from power, to understand its impact on childrens health at birth and during early childhood and whether the lift of the ban had an immediate impact on child abandonment. We find insignificant estimates for health at birth outcomes and anthropometric z-scores at age 4 and 5, except for the probability of low birth weight which is slightly higher for children born after abortion became legal. Additionally, our findings suggest that the lift of the ban had decreased the number of abandoned children.<p>
    Keywords: abortion; health; anthropometric outcomes; child abandonment; Romania
    JEL: I12 J13
    Date: 2011–08–09

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