nep-tra New Economics Papers
on Transition Economics
Issue of 2014‒10‒17
ten papers chosen by
J. David Brown
United States Census Bureau

  1. The Migration Policy and Migration Processes in Russia in 2013 By Lilia Karachurina
  2. Taxation Of R&D: Review Of Practices By Galina A. Kitova
  3. Strengthening Carbon Financing for Grassland Management in the People's Republic of China: Incentive Mechanisms and Implications By Asian Development Bank (ADB); ; ;
  4. How much can foreign multinationals affect the Chinese economy? A dynamic general equilibrium analysis of Japanese FDI By María C. Latorre; Nobuhiro Hosoe
  5. Challenges of Russian economic growth: reconstruction or acceleration? By Vladimir Mau
  6. Monetary policy transmission mechanism in Poland What do we know in 2013? By Tomasz Łyziak; Mariusz Kapuściński; Ewa Stanislawska; Jan Przystupa; Ewa Wrobel; Anna Sznajderska
  7. Exploring Policy Complementarities in Transition Economies: The Case of Kazakhstan By Jibran J Punthakey
  8. The North Caucasus in 2013: the conflicts are escalating By Irina Starodubrovskaya
  9. Innovation performance as a factor of socio-economic development in Kazakhstan By Aizhan Samambayeva; Manuel Fernández Grela
  10. Правосубъектность муниципальных образований Российской Федерации в частных отношениях By Dinara Minnigulova; Minnigulova Dinara

  1. By: Lilia Karachurina (Gaidar Institute for Economic Policy)
    Abstract: In 2013, both sudden growth in public interest in migration issues and explosive increase in the number of statutory acts initiated in that field were observed. A new surge of interest in migration was triggered by the Biryulovo developments in October and the election campaign of the Mayor of Moscow which took place a little earlier. This paper deals with a wide range of migration issues. ?
    Keywords: Russian economy; migration; labor migration; domestic migration
    JEL: J11 J61 J62 F22
    Date: 2014
  2. By: Galina A. Kitova (National Research University Higher School of Economics)
    Abstract: In recent years R&D tax incentives have been characterized by increasing scale and spread on innovation activity. Approaches to integrated R&D tax incentives into "recipes" for long-term growth and competitiveness were developed and tested in many countries. For exam-ple, only 12 OECD members employed R&D tax incentives in 1995, but 27 members do so in 2013 (as well as Brazil, China, India, Russia and other countries). And their share of total government expenditure on R&D (direct and tax) by OECD member countries reached at least a third. These trends have accompanied the development and testing of approaches to estimate the costs of tax support for R&D (including tax expenditures) and its effects and to ensure that they are internationally compatible. As for Russia, there are no officially accepted estimates of the scale and effectiveness of R&D and innovation tax support yet, though efforts to calculate them have been under way since 2010. This paper includes the current state of empirical research of tax support for R&D and in-novation in the Russian Federation, as well as a survey of the demand for its tools from research institutes, universities performing R&D, and manufacturing enterprises, which was conducted in 2012-2013. The results obtained demonstrate the power of empirical analysis and optimization of R&D and innovation tax incentives in the Russian Federation, against the background of the field's best practices and current trends.
    Keywords: R&D, innovation, tax incentives, tax expenditures, demand for R&D and in-novation tax incentives.
    JEL: H21 H22 H25
    Date: 2014
  3. By: Asian Development Bank (ADB); (East Asia Department, ADB); ;
    Abstract: The People’s Republic of China (PRC) is being impacted by climate change. The resulting degradation and desertification of grasslands are projected to lead to decreased productivity and severely affect livestock and ecosystems. Financial incentives are required to improve environmental management of grasslands and reduce greenhouse gas emissions in the grassland sector of the PRC. This publication summarizes the legal and policy framework for incentive programs, assesses the impact of three main incentive programs on soil carbon stocks, and analyzes the implications of these existing incentive mechanisms for the development of grassland carbon finance projects for domestic carbon markets.
    Keywords: China; People’s Republic of China; PRC, mitigation, climate policy, grassland management, livestock management grassland carbon sequestration, carbon offset, carbon market carbon trade, carbon dioxide , greenhouse gas, clean development mechanism; CDM, certified emission reduction; CER, GHG intensity, carbon credit, emissions trading verified carbon standard; VCS, voluntary emission reduction; VER
    Date: 2014–01
  4. By: María C. Latorre (Universidad Complutense de Madrid, Dpto.); Nobuhiro Hosoe (National Graduate Institute for Policy Studies)
    Abstract: We analyze the impacts of a sharp fall Japanese of foreign direct investment (FDI) to China that occurred after the worldwide financial crisis in 2009. The study is conducted by means of a three-region (Japan, China, and the rest of the world (ROW)) recursive dynamic computable general equilibrium (CGE) model with multinational enterprises (MNEs) driven by FDI. Our simulation experiment showed that the FDI fall would cause price rises of Japanese affiliates’ goods and a depreciation of the renminbi. These two forces with the FDI fall would heavily reduce exports and production of Japanese MNE affiliates, while increasing those in Chinese manufacturing. This, however, does not mean that China would be a gainer, because it would experience a contraction in its service sector. Its losses in its service sector would exceed the gains in the manufacturing sectors. Therefore, overall China would lose due to the FDI fall.
    Date: 2014–09
  5. By: Vladimir Mau (Gaidar Institute for Economic Policy)
    Abstract: In 2013 the Russian economy entered a new phase of socio-economic development. The period of tempestuous development, during which the primary trends and objectives had been those of recovery and which had lasted almost twelve years (1999–2012), had come to an end. The crisis of 2009 did not end in a replacement of this growth model; on the contrary it perpetuated its existence, given the need for a return to pre-crisis levels of output. The need for a new model became one of practical necessity, since rates of economic growth fell to a level that was unprecedented, a deceleration that could not be attributed exclusively, or even predominantly, to external factors. Corresponding conclusion was politically executed in the President’s Address of 12 December 2013. The internal factors at work within the Russian economy have to be examined in the context of the continuing global economic crisis. This crisis provides not only the economic but also the socio-economic background to Russian economic development and in particular circumstances it can be a significant factor in the adoption of internal political decisions.?
    Keywords: Russian economy; economic growth;
    JEL: O52 P27
    Date: 2014
  6. By: Tomasz Łyziak (Narodowy Bank Polski / Instytut Ekonomiczny); Mariusz Kapuściński (Narodowy Bank Polski / Instytut Ekonomiczny); Ewa Stanislawska (Narodowy Bank Polski); Jan Przystupa (National Bank of Poland, Institute for Market, Consumption and Business Cycles Research); Ewa Wrobel (National Bank of Poland and University of Warsaw); Anna Sznajderska (National Bank of Poland)
    Abstract: For a central bank knowledge of the monetary policy transmission mechanism is a prerequisite for achieving its final goal, i.e. price stability. Therefore, this area of analyses and research is of key importance for central banks, including Narodowy Bank Polski (NBP). Every two years since 2011, the Research Bureau of the Economic Institute at NBP, prepares a report on the functioning of the transmission mechanism in Poland. Our aim is to gather the results of the most recent studies and to present them in a non-technical manner. Though we remain within the New-Keynesian school, we treat the theoretical achievements – according to Mayer’s (1996) terminology – rather in terms of empirical-science theory than formalistic theory. Therefore, the studies presented in this report share a common empirical character and aim at finding the most complete answer to the question on the role of monetary policy for the main economic variables in Poland. In our analyses we employ a broad set of various modelling tools. Thus, following monetary transmission literature, we use structural vector autoregression models (SVAR) as they are an important tool of inference on stylized facts, main transmission channels and their effectiveness. To examine the strength and delays in the transmission mechanism and ways in which the central bank affects the economy, we use classic structural models, i.e. the new version of the structural monetary transmission model (MMT 2.0) and the model based on the Global Projection Models, adjusted for specific features of the Polish economy, called QMOTR. In contrast to the previously used models, the new ones explicitly treat equilibria of the main macroeconomic categories and allow for a higher degree of forward-lookingness. To assess the impact of the exchange rate on the real sector, we use another structural model, i.e. the natural exchange rate model, NATREX. Finally, to analyse interest rate pass-through we apply error correction models (ECM). As in the previous report (Demchuk et al., 2012), presentation of model results is preceded by an assessment of the structural features of the Polish economy, which are potentially important for the functioning of the monetary policy transmission.
    Date: 2014
  7. By: Jibran J Punthakey
    Abstract: Policy complementarities have often been overlooked in transition economies, leading to the exclusion or partial adoption of reforms. This paper examines the key determinants of successful transition strategies, and concludes that an approach exploiting complementary relationships and interactions between policies is most likely to result in a welfare improvement. Based on nine policy areas from the European Bank for Reconstruction and Development (EBRD) Transition Indicators database, composite indicators measuring reform implementation and complementarity are constructed. Panel data estimates for 30 countries over the period 1989 to 2012 demonstrate a positive association between improvements in reform complementarity and economic growth. Moreover, the effects are found to persist over time for up to two years after the initial policy change, and are robust to the inclusion of a wide range of control variables. Applying these findings to the case of Kazakhstan illustrates that comprehensive reforms to a targeted group of complementary policies generate sustained increases in output growth, whereas a partial reform strategy results in a loss of welfare.
    Keywords: economic growth, transition economies, panel data, structural reforms, Kazakhstan, complementarity, reform indicators
    JEL: C33 O40 P2
    Date: 2014–09–24
  8. By: Irina Starodubrovskaya (Gaidar Institute for Economic Policy)
    Abstract: The most obvious feature of the situation in the North Caucasus during last year was the disturbance of the fragile balance which had apparently begun to form in the preceding period, the escalation of existing conflicts and the emergence of new ones, including those related to resources. What was the cause of this escalation? What are its possible consequences? How does all this affect the economic situation in the region? These are the key questions which the authors aim to answer in this paper.
    Keywords: North Caucasus, Dagestan Republic
    JEL: R10 R11 R12 R13 R14
    Date: 2014
  9. By: Aizhan Samambayeva; Manuel Fernández Grela
    Abstract: Relationship between innovation performance and economic development is well-recognised all over the world (Mairesse, Lotti, & Mairesse, 2009, Grossman & Helpman, 1990, Hall, 2001). There are numerous of studies confirming that innovation development leads to economic growth, better productivity and increase in sustainable competitiveness. The assessment contributes to theoretical analysis on innovation and significantly broadens knowledge of innovation performance in developing countries. But the most considerable contribution is made to innovation system of Kazakhstan, which is very poor researched and published. Results of the study provide strengths and weaknesses of innovation performance in Kazakhstan and its position in the global landscape, which can be useful information for future policy making to improve social and economic development of the region. Besides The European Innovation Scoreboard, the most prominent innovation measurement indices are: 1. OECD Science, Technology, and Industry Scoreboard 2013 2. The World Bank’s Knowledge Assessment Methodology (KAM) 2012 3. The World Economic Forum’s Global Competitiveness Report 2013-2014 Taking into account data availability and level of innovation development, European Innovation Scoreboard is most appropriate tool to measure innovation performance in Kazakhstan. For example, The World Economic Forum’s Global Competitiveness Report is difficult to implement due to comprehensive nature of data required that is not publicly available. Moreover, some innovation indicators used in scoreboard are elaborated particularly for developed and sophisticated innovation system. Therefore they include variables that have interpretation value only in case of developed countries. European Innovation Scoreboard is not optimal choice to measure innovation performance in Kazakhstan. However, perfect fitting to Kazakhstan’s economy innovation measurement is unlikely will be comparable for other countries as well. Our goal was to find innovation measurement (scoreboard) that can satisfy our targets to elaborate innovation indicators that can be easily interpreted, providing exhaustive analysis of innovation situation in Kazakhstan; and to be able benchmark the country with similar economies (catching-up countries). According to Archibugi, Denni, & Filippetti (2009), European Innovation Scoreboard shoud be considered as measure of innovation performance rather than others. Because it takes into account new forms of innovation. Others mostly represent current endowment of country to develop its competitiveness and growth through technological innovations. The methodology includes 29 indicators, grouped over 7 different innovation dimensions and 3 major groups of dimensions. The group of “Enablers” captures the main drivers of innovation that are external to the firm and it is divided into two dimensions: “Human resources” and “Finance and support”, capturing in total 9 indicators. Some indicators are subject to national context. Therefore, more detailed information about issues regarding the calculation of the indicators is presented in the whole version of the paper. The results of study revealed relative competitiveness of the region in supply of human capital. However, the rapid pace of economic development requires highly skilled workforce, especially technical and engineering specialist, in order to support innovation performance in the country. Besides the importance of participation in long-life learning for on-going technical development and innovation, this number is extremely low in Kazakhstan. The main factors hampering innovation performance are insufficient R&D investments (public and private), poor infrastructure, weal linkages between main stakeholders of innovation process. This everything is a result of inefficient public policy on innovation and historical and cultural circumstances. The study has found that generally the innovation performance of the region is similar to that of the country. The indicator of the country and region are slightly different. Unsurprisingly, the indicators have shown that the region is placed at the bottom of catching-up countries. The current research was limited to evaluate factors related to qualitative characteristics of the indicator. Moreover, measuring regional innovation performance showed that more progress is needed on the availability and quality of innovation data at regional level. In general, research showed that innovation level of the country is very low even in comparison with catching-up countries. It can be explained by economic model where output is mainly driven by increased used of labour and capital. As a result a low demand for knowledge and weak linkages between key actors. “Knowledge producing and processing sectors and actors so far remain largely isolated from one another, and their activities are structurally mismatched. This may be explained by the lack of incentives in the business sector to innovate, as innovation is often not seen as necessary to maintain or develop competitive advantages. In addition, the commercial orientation of public R&D capacities (knowledge supply) remains limited. This vicious cycle seems to have locked the national innovation system into a suboptimal, low knowledge intensity equilibrium (Innovation performance review of Kazakhstan, 2012)” See above See above
    Keywords: Kazakhstan, Socio-economic development, Socio-economic development
    Date: 2014–10–01
  10. By: Dinara Minnigulova; Minnigulova Dinara
    Abstract: To determine legal limits of municipality's power in private relationsanalysis of legislationOn one hand Municipalities are entities of public law and take part in various types of relations, on the other hand municipalities act as a quasi-legal entity and enter into private legal relations , where they lost the essential public character, which leads to conflict of their legal regulation and creates problems for legal practice. This situation affects the jurisprudence, which causes a change in the current legislation in the direction of defining the limits of municipalities's public power in private legal relations area .
    Keywords: Russian Federation, Other issues, Other issues
    Date: 2014–10–01

This nep-tra issue is ©2014 by J. David Brown. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.