nep-tra New Economics Papers
on Transition Economics
Issue of 2020‒10‒19
eight papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Science and technology policies and the middle-income trap: lessons from Vietnam By Klingler-Vidra, Robyn; Wade, Robert
  2. Populism Amidst Prosperity: Poland's Growth Model and its Socio-Political Outcomes By Nina Lopez Uroz
  3. Blinder-Oaxaca Approach to Identify Innovation Differences in Transition Countries By Antonella Biscione; Dorothée Boccanfuso; Raul Caruso; Annunziata de Felice
  4. The Role of EU Integration in Accelerating Structural Reforms in the Western Balkans: Evidence, Theory and Policy By Fatmir Besimi; Vassilis Monastiriotis
  5. European identity discourses in the contested neighborhood of Europe and Russia: The case of Ukraine By Minesashvili, Salome
  6. Returns to Education in the Russian Federation: Some New Estimates By Melianova, Ekaterina; Parandekar, Suhas; Patrinos, Harry Anthony; Volgin, Artëm
  7. A Hypothesis on Poverty Change in Albania (2007-2016) By Antonella Biscione; Dorothée Boccanfuso; Raul Caruso
  8. What factors determine unequal suburbanisation? New evidence from Warsaw, Poland By Honorata Bogusz; Szymon Winnicki; Piotr Wójcik

  1. By: Klingler-Vidra, Robyn; Wade, Robert
    Abstract: As Vietnam crossed the World Bank’s threshold from ‘low income’ to ‘lower middle-income’ in 2010 the government and aid donors started to speak about ‘the middle-income trap’ as a central problem; and to frame ‘science and technology (S&T) policy’ as a means of sustaining economic growth and thereby avoiding the trap. They identified China and its S&T policy as a model, and pointed to Intel’s $1 billion facility as evidence of a burgeoning technology hub. Yet in the years that followed, Vietnam’s S&T policy has limped along, with efforts simply to boost the number of Silicon Valley-styled start-ups rather than to pursue a ‘Made in China 2025’-like programme. This paper reveals two main reasons. First, the Ministry of Science and Technology is a weak ministry with little budget, unable to persuade other ministries to cooperate in more ambitious and capital-intensive strategies. Second, excitement around S&T policies was fuelled by an influx of high-tech Vietnamese returning home after the 2008 Global Financial Crisis, lending support for building start-up ecosystems. These mechanisms are reinforced by Western aid agencies’ support for this narrow S&T policy conception. Findings are based on policy documents and interviews conducted with S&T policy-makers, aid donor staff, and start-up investors between 2012 and 2018.
    JEL: N0
    Date: 2020–04–02
  2. By: Nina Lopez Uroz
    Abstract: Poland is an example of both successful economic transition from communism and democratic backsliding. By applying the crucial case study method, this paper explores how the Polish version of the dependent market economy has led to relative deprivation and political instability. The distributional consequences of this growth model are analysed by looking at three indicators, namely wages, income inequality and temporary employment. While it seems at first that the electoral results of the radical-right populist Law and Justice party cannot be explained by socio-economic factors, this paper argues that distributional outcomes have acted as a deeper variable for the party’s success. Growing discontent stemmed from gradually deteriorating economic perspectives for key social blocs. More broadly, in combination with a supply-side analysis of party system change, this paper seeks to identify the socioeconomic conditions under which a populist party can thrive and questions the political viability of the dependent market economy.
    Keywords: growth model, Poland, relative deprivation, labour market segmentation, populism
    Date: 2020–09
  3. By: Antonella Biscione (CESPIC, Catholic University “Our Lady of Good Counsel”); Dorothée Boccanfuso (Faculté de Gouvernance, Sciences Economiques et Sociales, Université Mohammed VI Polytechnique); Raul Caruso (CESPIC, Catholic University “Our Lady of Good Counsel”); Annunziata de Felice (Department of Law, University of Bari Aldo Moro)
    Abstract: By the use of firm-level data coming from the Business Environment and Enterprise Performance Survey (BEEPS V) conducted in 2012–2014, this paper aims to investigate the sources of the possible gender ownership gap in innovativeness in a set of Transition economies. Through the Blinder-Oaxaca decomposition we highlight the factors explaining the differences in the propensity to innovate between female-owned and male-owned firms. We find that the innovation disparity between firms with females among their owners and those having only male owners is mainly due to the differences in endowment effects. Tangible and intangible assets affect the innovation gap between the two groups of firms.
    Keywords: Blinder-Oaxaca decomposition; non-linear model; gender ownership; innovation gap; Transition Countries
    JEL: O32 J12 P23
    Date: 2020–10
  4. By: Fatmir Besimi; Vassilis Monastiriotis
    Abstract: Integration with the European Union has been an important driver of economic, political and social transformation in the Western Balkans. In recent years, however, the pace of structural reforms in the region has decelerated and the trend of economic catch-up seen in the 2000s has not resumed after the slowdown of the global economic crisis. This has coincided – at least temporally, if not causally – with a ‘temporary freeze’ in the EU’s enlargement towards the region. Against this backdrop, this paper seeks to investigate the role of EU conditionality on economic reforms and convergence in the Western Balkans. To do so, it provides original, albeit descriptive, empirical evidence showing a strong link between EU-related structural reforms (towards the Copenhagen Criteria) and economic growth; and subsequently presents an analytical model demonstrating the mechanisms of policy decisions for reforms under EU conditionality. The model assumes away sectoral interests, policy uncertainty and coordination problems, allowing the analysis to focus specifically on the tension between two objectives: the pursuit of EU accession, through the implementation of jointly agreed reforms, and the accommodation of domestic policy concerns (maintaining policy stability and public support). Our results unveil a policy dilemma for the EU, having to choose between maximising the reform effort and minimising non-compliance. Drawing on this model, we discuss extensively the policy options that the EU faces in trying to enhance the reform performance, growth trajectories and, ultimately, European perspective of the countries in the region.
    Keywords: Structural reforms, European integration, Political Economy, Economic convergence
    Date: 2019–01
  5. By: Minesashvili, Salome
    Abstract: Since the 1990s, the notion of belonging to Europe has been embedded in a number of the former Soviet states' domestic discourses. These European identity discourses are highly contested, both domestically and internationally, and operate beyond the European Union community, giving the European identity concept its peculiar character. At the same time, these states have been through turbulent times and numerous crises since the collapse of the Soviet Union. However, due to a lack of comparative and longitudinal studies on these discourses, not much is known whether and how these reconstructed images of the European Self have been changing. This paper examines the development of European identity discourse based on the case of Ukraine. The posed question is empirically explored by a study of Ukrainian mass media discourse on European identity for the period of 2004-2017. Changes in the discourse are examined in the context of domestic and foreign political developments in order to uncover the conditions that instigate change in identity notions and contesation around them. The paper finds that while the contestation persists over time, it can fluctuate depending on the event. During the given time period, the Orange Revolution and the war with Russia have resulted in the most significant changes when the contestation changes in favor of the pro-European discourse, which becomes dominant at the expense of the anti-European one.
    Keywords: European identity,Ukraine,color revolution,Russo-Ukrainian war
    Date: 2020
  6. By: Melianova, Ekaterina; Parandekar, Suhas; Patrinos, Harry Anthony; Volgin, Artëm
    Abstract: This paper presents new estimates of the returns to education in the Russian Federation using data from 1994 to 2018. Although the returns to schooling increased for a time, they are now much lower than the global average. Private returns to education are three times greater for higher education compared with vocational education, and the returns to education for females are higher than for males. Returns for females show an inverse U-shaped curve over the past two decades. Female education is a policy priority and there is a need to investigate the labor market relevance of vocational education. Higher education may have reached an expansion limit, and it may be necessary to investigate options for increasing the productivity of schooling.
    Keywords: Returns to Education,Russian Federation
    JEL: I26 I28 J16
    Date: 2020
  7. By: Antonella Biscione (CESPIC, Catholic University “Our Lady of Good Counsel”); Dorothée Boccanfuso (Faculté de Gouvernance, Sciences Economiques et Sociales, Université Mohammed VI Polytechnique); Raul Caruso (CESPIC, Catholic University “Our Lady of Good Counsel”)
    Abstract: The aim of this paper is to investigate the poverty changes in Albania using data coming from the Household Budget Surveys conducted in 2007-2016 by the Albanian National Statistics Institute (INSTAT). In particular, we employ the static and dynamic approaches to evaluate the effect of growth and inequality on poverty variation both at national and macro-region level. To better understand the effect of economic growth on poverty change, we also perform two simulations that account for two scenarios of economic growth. The results show that: (i) the increase in poor population is due to the lack of growth in consumption; (ii) the improvement in the distribution of consumption has stopped further increases in poverty level. Finally, the findings of the two economic growth simulations show that an economic growth without an increase in inequality could reduce poverty in all its dimensions.
    Keywords: FGT class index, poverty, poverty decomposition, elasticity of poverty, Albania.
    Date: 2020–10
  8. By: Honorata Bogusz (Faculty of Economic Sciences, University of Warsaw and Labfam); Szymon Winnicki (Faculty of Economic Sciences, University of Warsaw); Piotr Wójcik (Faculty of Economic Sciences, Data Science Lab WNE UW, University of Warsaw)
    Abstract: This article investigates the causes of spatially uneven migration from Warsaw to its suburban boroughs. The method is based on the gravity model of migration extended by additional measures of possible pulling factors. We report a novel approach to modelling suburbanisation: several linear and non-linear predictive models are estimated and explainable AI methods are used to interpret the shape of relationships between the dependent variable and the most important regressors. It is confirmed that migrants choose boroughs of better amenities and of smaller distance to Warsaw city center.
    Keywords: suburbanisation, gravity model of migration, machine learning models, explainable artificial intelligence
    JEL: R23 P25 C14 C51 C52
    Date: 2020

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