nep-tra New Economics Papers
on Transition Economics
Issue of 2012‒04‒10
fourteen papers chosen by
J. David Brown
Heriot-Watt University

  1. Impact of services liberalization on industry productivity, exports and development : six empirical studies in the transition countries By Tarr, David
  2. Income Distribution and Poverty in Russia By Irina Denisova
  3. Labour Market Reforms and Outcomes in Estonia By Zuzana Brixiova; Balázs Égert
  4. On the Empirics of China's Inter-regional Risk Sharing By Li, Jia
  5. Migration as a rural development strategy and the migrants involved : an account of a migrants' hometown in Sichuan, China By Yamaguchi, Mami
  6. Children, support in old age and social insurance in rural China By Zhang, Chuanchuan
  7. Economic Growth, Comparative Advantage, and Gender Differences in Schooling Outcomes: Evidence from the Birthweight Differences of Chinese Twins By Rosenzweig, Mark; Zhang, Junsen
  8. Assessing agglomeration economies in the Yangzi River Delta, China : a bayesian spatial econometric approach By Hashiguchi, Yoshihiro; Chen, Kuang-hui
  9. Political instability and economic growth: Evidence from two decades of transition in CEE By Gurgul, Henryk; Lach , Łukasz
  10. Financial Integration between China and Asia Pacific Trading Partners: Parities Evidence from the First- and Second-generation Panel Tests By Chan, Tze-Haw; Baharumshah, Ahmad Zubaidi
  11. The new old choice for economic policymakers in Belarus By Alexander Chubrik
  12. One Mandarin Benefits the Whole Clan: Hometown Infrastructure and Nepotism in an Autocracy By Kieu-Trang Nguyen; Quoc-Anh Do; Anh Tran
  13. Public sector pay policy in East European countries By Lupu, Dan
  14. Ценообразование на рынке жилья в странах СНГ (на примере г. Москвы). By Potashev, Roman

  1. By: Tarr, David
    Abstract: Services as a share of gross domestic product and in foreign direct investment flows have increased in importance both globally and in the transition countries of Europe and Central Asia. So has the need for both academics and policymakers to understand the impacts of services liberalization in the transition countries. For this reason, the World Bank Institute, under a grant from the Government of Austria, commissioned seven studies under the auspices of the Economic Education Research Consortium (headquartered in Kiev, Ukraine) to investigate the impact of services liberalization on productivity, focusing on services reform in the transition countries of Europe and Central Asia. All of the studies have been produced by authors from the transition countries of Europe or Central Asia. This paper summarizes six of these studies that will appear in a volume in Russian edited by the author of this paper. The studies contribute to the growing empirical literature establishing that liberalization of barriers against service providers can make an important contribution to increase total factor productivity, exports and growth in the economy. They also show that the issue of services liberalization is important for the transition countries in particular. Links to the English language versions of the papers are provided.
    Keywords: Banks&Banking Reform,Economic Theory&Research,ICT Policy and Strategies,Emerging Markets,E-Business
    Date: 2012–04–01
  2. By: Irina Denisova
    Abstract: The paper is a survey of literature and statistical sources on poverty and inequality in Russia in the 1990s and the 2000s. It serves as a background to OECD (2011), the OECD Labour Market and Social Policy Review of the Russian Federation that was released in 2011. We start with an overview of poverty and income inequality estimates available. Poverty and inequality trends are then complemented with poverty incidence analysis based on a nationally representative household survey. Long-term poverty patterns are examined using a panel dataset with survival analysis methods. Poverty prevention and reduction policies are discussed in the conclusion.<BR>Ce document fait le tour des sources statistiques et bibliographiques sur la pauvreté et les inégalités dans la Fédération de Russie dans les années 90 et 2000. Il a servi à l’élaboration de l’Etude publiée en 2011 par l’OCDE intitulée « OECD Reviews of Labour Market and Social Policy : Russian Federation ». Ce document débute par un examen des données disponibles sur la pauvreté et les inégalités de revenus. Les tendances en matière de pauvreté et d’inégalité sont ensuites complétées par des analyses qui s’appuient sur des enquêtes nationales représentatives des ménages. Les motifs de la pauvreté à long terme sont étudiés en utilisant un échantillon de données avec des méthodes d’analyse de survie. Les politiques de prévention et de réduction de la pauvreté sont présentées en conclusion.
    Keywords: poverty, inequality, poverty incidence, entry to and exit from poverty, RLMS-HSE, pauvreté, inégalité, incidence de la pauvreté, entrée et sortie de la pauvreté, RLMS-HSE
    JEL: I32
    Date: 2012–03–27
  3. By: Zuzana Brixiova; Balázs Égert
    Abstract: The unemployment rate in Estonia rose sharply in 2010 to one of the highest levels in the EU, after the country entered a severe recession in 2008. While the rate declined relatively rapidly in 2011, it remained high especially for the less educated. In 2009, the Employment Contract Law relaxed employment protection legislation and sought to raise income protection of the unemployed to facilitate transition from less to more productive jobs while mitigating social costs. Utilizing a search model, this paper shows that increasing further labour market flexibility through reducing the tax wedge on labour would facilitate the structural transformation and reduce the long-term unemployment rate. Linking increases in unemployment benefits to participation in job search or training programmes would improve the unemployed workers' incentives to search for jobs or retrain and the medium term labour market outcomes. Social protection schemes for the unemployed should be also strengthened as initially intended to give the unemployed sufficient time to search for adequate jobs or retrain for new opportunities.
    Keywords: Labour market reforms, search model, Estonia, OECD countries
    JEL: J08 J64 E24
    Date: 2012
  4. By: Li, Jia
    Abstract: This study provides a comprehensive investigation on the mechanisms of risk sharing among China's provinces over the period 1995-2009. Using three empirical techniques, we found that, first, the extent of risk sharing attained by the provinces is relatively limited, and the financial liberalization since the late 1990s has not helped improve the degree of risk sharing. Second, credit market, compared to capital market, capital depreciation, and tax-transfer system, has been the single operative channel of risk sharing in China. Third, there are possibilities for China to gain the benefits of risk sharing from various institutional factors. In particular, though still insignificant, rural-urban migration, formal financial system and fiscal transfer appear to start to promote risk sharing recently. In contrast, FDI seems to be a dis-smoothing factor in China.
    Keywords: Risk sharing; financial liberalization; China
    JEL: E2 C0 G0 C2
    Date: 2012–03
  5. By: Yamaguchi, Mami
    Abstract: This paper attempts to describe part of the history of Chinese rural migration to urban industrial areas. Using a case study of a township in Sichuan, the author examines a type of rural development which she defines as a "bottom-up" style strategy of regional development. Different types of social mobility are observed in the case study, and over its long history, migration in the township has offered diverse means of social mobility to the local peasants. The paper concludes by considering the diversity and limits of Chinese social mobility at this stage.
    Keywords: China, Population movement, Social change, Migration, Social mobility, Rural development
    JEL: I39 J49 J61 J68 R23
    Date: 2012–03
  6. By: Zhang, Chuanchuan
    Abstract: Most people in rural China have no plans for retirement other than the ingrained Chinese tradition that children care for old parents. Actually there are also no sources of social support such as social old-age insurance to rely on in rural people’ old age for a long time in China. In 1992, a social old-age insurance program, rural pension program, was initiated by the Chinese government to firstly establish a social security system in China’s rural area. The rural pension program experienced rapid development in the beginning years but grounded to halt after 1998. Since either children or pension program provides support for elderly, we expected that these two can be viewed as substitutes to some extent. Using data from China’s 2005 mini-census, we find that rural people who have at least one son are less likely to participate in pension program and each additional son and daughter both decreases their participation rate. Moreover, the effect of an additional son is much larger than that of an additional daughter. In addition, both evidence from mini-census and China Health and Retirement Longitudinal Study show that peasants accessing to pension are less likely to rely on their children for support in old age. These findings suggest that demand for children, especially for sons are partly driven by concerns relating to care in old age; children and formal social old-age insurance are substitutes for support in old age. We then expect that implementation of social old-age insurance may mitigate rural people’ demand for children, especially sons and thus correct China’s severe sex ratio bias to some extent. We test this hypothesis using the difference-in-differences strategy, and find that increase of sex ratio at the region level slowed down after the implementation of the rural pension program. Overall, our empirical analysis in this paper implies that sex ratio bias is partly due to demanding for sons for support in old age and carrying out social old-age insurance in rural China are helpful in mitigating demand for children and correcting sex ratio bias.
    Keywords: children; rural pension; sex ratio
    JEL: I12 J38 I38
    Date: 2011
  7. By: Rosenzweig, Mark (Yale University); Zhang, Junsen (Chinese University of Hong Kong)
    Abstract: Data from two surveys of twins in China are used to contribute to an improved understanding of the role of economic development in affecting gender differences in the trends in, levels of, and returns to schooling observed in China and in many developing countries in recent decades. In particular, we explore the hypothesis that these phenomena reflect differences in comparative advantage with respect to skill and brawn between men and women in the context of changes in incomes, returns to skill, and/or nutritional improvements that are the result of economic development and growth.
    JEL: I15 I25 J16 J24 O15
    Date: 2012–02
  8. By: Hashiguchi, Yoshihiro; Chen, Kuang-hui
    Abstract: This paper estimates the magnitude of agglomeration economies in the Yangzi River Delta, China, by using the empirical model proposed by Chen and Hashiguchi (2010). The model is an extension of the Ciccone-Hall model (Ciccone and Hall 1996), and enables us to take into account both the endogeneity problem and spatial autocorrelation without instrumental variables in the estimation. County-level data for Shanghai, Jiangsu, and Zhejiang in 2009 and Bayesian methods are used to estimate the model. As a result, the magnitude is found to be insignificant. This indicates that the effect of agglomeration economies is very weak in this area, and so regional development policies for enhancing the interaction among firms and the linkage between industries are required to increase the benefit of agglomeration.
    Keywords: China, Local economy, Econometric model, Agglomeration economies, Spatial autocorrelation, Endogeneity, Bayesian estimation
    JEL: C21 C51 R10 R11 R15
    Date: 2012–03
  9. By: Gurgul, Henryk; Lach , Łukasz
    Abstract: This paper examines the nexus between political instability and economic growth in 10 CEE countries in transition in the period 1990-2009. Our results support the contention that political instability defined as a propensity for government change had a negative impact on growth. On the other hand, there was no causality in the opposite direction. A sensitivity analysis based on the application of a few hundred different variants of the initial econometric model confirmed the abovementioned findings only in the case where major government changes were applied to the definition of political instability.
    Keywords: economic growth; political instability; CEE economies
    JEL: O40
    Date: 2012–03–01
  10. By: Chan, Tze-Haw; Baharumshah, Ahmad Zubaidi
    Abstract: This paper presents a joint investigation of the international parity conditions between China and her 13 major trading partners in the Asia Pacific over globalization era. Several advanced tests of unit root for univariate and panel series are utilized in the analyses. Our findings reveal that first, RIP holds stronger than PPP among APEC-China. Second, both parities tend to hold better as one move to the recent years, attributed not only to the financial liberalization process among APEC economies, but also to the Chinese trade policy and the regional commitment for the ASEAN+3+2+1 cooperation. Third, China and APEC have improved the ability to absorb regional shocks as indicated by the shortened half-life reported over time, especially when the post-Asia crisis era is included.
    Keywords: PPP; RIP; Panel Unit Root Tests; Mean Reversion; Half-life; Financial Integration
    JEL: G15 C33 F36
    Date: 2012–03
  11. By: Alexander Chubrik
    Abstract: In 2011, the Belarusian ruble lost nearly 2/3 of its value. In December, the inflation rate approached 110% yoy. At the same time, the economy grew by 5.3% that year and continued with 3.6% yoy growth in January 2012. Is this a sign of economic recovery? Will it turn into sustainable growth? Or has the country exited from the crisis at all? To address these questions, CASE Fellow and Director of the IPM Research Centre in Minsk Alexander Chubrik looks at the roots of the 2011 crisis and compares them with the features of the long-lasting period of economic growth in Belarus.
    Keywords: Trade, economic integration and globalization, Eastern Europe, Caucasus and Central Asia, Belarus
    Date: 2012–04
  12. By: Kieu-Trang Nguyen (Indiana University Bloomington); Quoc-Anh Do (Singapore Management University); Anh Tran (Indiana University Bloomington)
    Abstract: This paper studies nepotism by government officials in an authoritarian regime. We collect a unique dataset of political promotions of officials in Vietnam and estimate their impact on public infrastructure in their hometowns. We find strong positive effects on several outcomes, some with lags, including roads to villages, marketplaces, clean water access, preschools, irrigation, and local radio broadcasters, as well as the hometown’s propensity to benefit from the State’s “poor commune support program”. Nepotism is not limited to only top-level officials, pervasive even among those without direct authority over hometown budgets, stronger when the hometown chairperson’s and promoted official’s ages are closer, and where provincial leadership has more discretionary power in shaping policies, suggesting that nepotism works through informal channels based on specific political power and environment. Contrary to pork barrel politics in democratic parliaments, members of the Vietnamese legislative body have little influence on infrastructure investments for their hometowns. Given the top-down nature of political promotions, officials arguably do not help their tiny communes in exchange for political support. Consistent with that, officials favor only their home commune and ignore their home district, which could offer larger political support. These findings suggest that nepotism is motivated by officials’ social preferences directed towards their related circles, and signals an additional form of corruption that may prevail in developing countries with low transparency.
    Keywords: nepotism, infrastructure construction, official’s hometown, political connection, political promotion, social preference, directed altruism.
    JEL: O12 H54 H72 D72 D64
    Date: 2012–01
  13. By: Lupu, Dan
    Abstract: The public sector salaries in general, but especially in the civil administration has been and will be a topical issue, highly controversial, and with a permanent presence in the media. This article presents the developments that took place in wages of Eastern European public servants as a result of the international financial crisis.
    Keywords: wages; public sector; private sector
    JEL: J31 J38
    Date: 2012–03–29
  14. By: Potashev, Roman
    Abstract: The article presents the author's model of pricing at the housing market. Economic indicators according to which the analysis should be carried out are defined in this article. The analysis of prices at the housing market of CIS countries on the example of Moscow in the post-Soviet period is made from the standpoint of microeconomics.
    Keywords: price; housing; inflation; currency exchange rate; rent; wage
    JEL: D4 R21 R2 R31
    Date: 2011–08

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