nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒01‒31
ten papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. The Biggest Problem in Post-Communist Transition: The Privatization of Large Enterprises By Anders Aslund
  2. Checkmate! Losing with Borders, Winning with Centers. The Case of European Integration By Ketevani Kapanadze
  3. A comparative analysis of confidence to the CIS between Ukraine and Russia By Tamilina, Larysa
  4. Air Pollution and Migration: Exploiting a Natural Experiment from the Czech Republic By Stepan Mikula; Mariola Pytlikova
  5. Competitiveness of the Textile and Clothing Industry in Bulgaria after the European Union Accession and in Times of COVID-19 Pandemic By Zhelev, Paskal
  6. The Polish Deal: The economic consequences of the proposed new tax system By Ewa Balcerowicz; Michał Myck; Joanna Tyrowicz; Paweł Wojciechowski; Kajetan Trzciński
  7. Does informal employment improve livelihood in the long-term in Azerbaijan? By Nahmadova, Firuza
  8. Does Self-Assessed Health Reflect the True Health State? By Pavitra Paul; Ulrich Nguemdjo; Natalia Kovtun; Bruno Ventelou
  9. Careful What You Say: The Effect of Manipulative Information on the 2013 Czech Presidential Run-off Election By Guzi, Martin; Mikula, Stepan
  10. Exchange Rate Pass-through and Wheat Prices in Russia By Yugay, Stanislav; Götz, Linde; Svanidze, Miranda

  1. By: Anders Aslund
    Abstract: Thirty years after the collapse of the Soviet Union, it is rather clear what transition policies have worked. Almost all the post-communist countries have become market economies and have achieved macroeconomic stability. Privatization was economically necessary, and its economic outcomes have been very positive. Alas, politically, these successes have often been unsustainable because of strong popular sentiments against the private ownership of big enterprises. Substantial renationalization has occurred. What went wrong? How could privatization be done better, or be defended? What should be done to defend private enterprise in the future? This paper argues that the nature of privatization is far less important than the establishment of good rule of law so that private property rights can be defended.
    Keywords: Eastern Europe, former Soviet Union, post-communist transformation, market economy, privatization
    JEL: P20 P26 P30 P31 K00 K42
    Date: 2021
  2. By: Ketevani Kapanadze
    Abstract: This paper studies two major stages of European integration, the expansion of the European Union (EU) in 2004 and the Schengen Area in 2008, and their impacts on economic performance in subregions of Central and Eastern European (CEE) countries. Using European regional data at the NUTS3 level and disaggregated synthetic control method, I construct counterfactuals for sub-regions of CEE countries. This approach allows me to assess regional treatment effects (RTEs) and to study the heterogeneous effects of European integration. I find that the benefits of EU and Schengen memberships to annual GDP per capita are approximately 10% less in border regions, relative to interior areas. The results expose regional economic disparities, as border regions lose relative to interior regions since European integration. Furthermore, integration facilitators in border regions such as fewer geographical barriers, more service employment, and positive attitudes toward the EU did not reduce economic disparities. The results show that the gap persists, regardless of some complementarities. Thus, the main implication of this paper is that sub-regions of CEE countries are far from being fully converged, and that European integration instead seems to have spurred sub-regional divergence.
    Keywords: CEE countries; European integration; RTEs; borders; dissagregated synthetic controls;
    JEL: F15 F16 F20 R12
    Date: 2021–12
  3. By: Tamilina, Larysa
    Abstract: This study focuses on examining confidence to the Commonwealth of Independent States (CIS) displayed by the Ukrainian and the Russian respondents in 2011. By juxtaposing its patterns of formation, I approximate the individuals’ preference for a common unification shortly before the beginning of a military confrontation between the two countries. Drawn upon the World Values Survey (WVS) data, I demonstrate that the Ukrainian population viewed the CIS as incompatible with building national identity or increasing the importance of democracy as a form of governance in their country. While also linked to democracy, the CIS was primarily a matter of national pride and, to some extent, an issue of economic prosperity in Russia. In both countries, the CIS was similarly seen by the respondents as a supplement to the national government and an alternative to the West.
    Keywords: Commonwealth of Independent States, Confidence to the CIS, Ukraine-Russia Relations, Comparative Analysis, Logistic Regression, WVS.
    JEL: F00 F5 F51 F55
    Date: 2021–12–13
  4. By: Stepan Mikula; Mariola Pytlikova
    Abstract: This paper examines the causal effects of air pollution on migration by exploiting a natural experiment in which desulfurization technologies were rapidly implemented in coal-burning power plants in the Czech Republic in the 1990s. These technologies substantially decreased air pollution levels without per se affecting economic activity. The results based on a difference-in-differences estimator imply that improvements in air quality reduced emigration from previously heavily polluted municipalities by 24%. We find that the effect of air pollution on emigration tended to be larger in municipalities with weaker social capital and fewer man-made amenities. Thus, our results imply that strengthening social capital and investing in better facilities and public services could partially mitigate depopulation responses to air pollution. Finally, we look at heterogeneous migratory responses to air pollution by education and age and find some evidence that the more educated tend to be more sensitive to air pollution in their settlement behavior.
    Keywords: air pollution; migration; natural experiment;
    JEL: Q53 J61 O15
    Date: 2021–11
  5. By: Zhelev, Paskal
    Abstract: The purpose of this paper is to analyse the changes in Bulgaria’s competitiveness in the textile and clothing (T&C) industry after the European Union accession and in times of the coronavirus pandemic covering the period 2007-2020. In methodological terms the study uses various indicators including production value, employment, labour productivity, relative trade balance, revealed comparative advantage index, among others. Wherever possible the analysis is done in a comparative perspective benchmarking the performance of the sector in Bulgaria with that in Romania. The results show that the Bulgarian T&C industry has undergone a significant transformation in the last two decades increasing its productivity but being subject to significant jobs downsizing. While still competitive on the European market, with rising wages and production costs, the comparative advantages of the industry are gradually eroding. The coronavirus pandemic has hit the apparel subsector very hard while some textile producers which managed to shift their production to personal protective equipment items managed it successfully. However, this is a temporary solution. The T&C industry in Bulgaria is confronted with significant long-term challenges such as the green and the digital transformation, and the how it deals with them will determine the prospects of the sector.
    Keywords: textiles and apparel industry, comparative advantages, trade balance, Bulgaria, Romania
    JEL: F1 F23 L6 O52
    Date: 2021
  6. By: Ewa Balcerowicz; Michał Myck; Joanna Tyrowicz; Paweł Wojciechowski; Kajetan Trzciński
    Abstract: In this publication, which was created based on the 170th mBank-CASE Seminar, we analyze one of its parts: the far-reaching proposals for changes in the tax system. The analysis we present here isn’t comprehensive, which would require a broad report, but partial: it covers potential economic effects, in selected areas. One of the goals of the Polish Deal is “the fastest possible return to the path of economic growth,” but the document contains no analysis of whether and how the changes in taxes will affect medium- and long-term growth. Nor are there any estimates of how they will affect the labor market, the propensity to invest (leaving aside the question of special tax relief for investors and the plan for huge government investment in infrastructure).
    Keywords: Polish Deal, tax, tax reform, pension, retirees, investments, Poland
    JEL: H2 K34 J14 J26 D25 E2
    Date: 2021–10–19
  7. By: Nahmadova, Firuza
    Abstract: Much of the research on income inequality, and livelihood rely on government labor and wages statistics. In emerging economies, the lack of reliable data and the prevalence of informal employment is often mentioned as the main limitation to the credibility of these studies’ results. Azerbaijan is one such case where it is quasi-impossible to estimate an actual average income as informal employment is over half of the entire economy due to, among others, undeclared revenue, low-level bribery, and low formal income. This paper investigates whether informal employment and the undeclared (informal) income that citizens perceive from the related activities improve their livelihoods in the long-term. The relationship between income inequality and informal employment will be discussed based on a comparative analysis of three developing countries from three different regions, namely Africa, Central America, and South-East Asia. Evidence from these developing economies suggests that informal income does not positively impact their livelihoods. The paper ends with a discussion of the impact of informal employment in Azerbaijan using household income per capita statistics for 2020. The discussion suggests that the prevalence of informal employment does not improve the livelihood of the average household.
    Keywords: informal employment, Azerbaijan, poverty, income inequality, wages
    JEL: E2 E26
    Date: 2021–11
  8. By: Pavitra Paul (CNRS, UMIFRE 20 CSH, CNRS-MAE - Partenaires INRAE, Yerevan State Medical University); Ulrich Nguemdjo (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université, LPED - Laboratoire Population-Environnement-Développement - IRD - Institut de Recherche pour le Développement - AMU - Aix Marseille Université); Natalia Kovtun (Taras Shevchenko National University of Kyiv); Bruno Ventelou (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université)
    Abstract: Self-assessed health (SAH) is a widely used tool to estimate population health. However, the debate continues as to what exactly this ubiquitous measure of social science research means for policy conclusions. This study is aimed at understanding the tenability of the construct of SAH by simultaneously modelling SAH and clinical morbidity. Using data from 17 waves (2001–2017) of the Russian Longitudinal Monitoring Survey, which captures repeated response for SAH and frequently updates information on clinical morbidity, we operationalise a recursive semi-ordered probit model. Our approach allows for the estimation of the distributional effect of clinical morbidity on perceived health. This study establishes the superiority of inferences from the recursive model. We illustrated the model use for examining the endogeneity problem of perceived health for SAH, contributing to population health research and public policy development, in particular, towards the organisation of health systems.
    Keywords: clinical morbidity,endogeneity,perceived health,recursive,semi-ordered,Russia
    Date: 2021–11
  9. By: Guzi, Martin (Masaryk University); Mikula, Stepan (Masaryk University)
    Abstract: We exploit a quasi-natural experiment that emerged during the Czech presidential run-off election to identify the impact of inaccurate and misleading information on electoral outcomes. A political campaign associated a vote for one of the candidates with a legally and politically unfounded risk relevant to people owning houses confiscated from ethnic Germans after the Second World War. Using municipalitylevel data in a difference-in-differences framework, our analysis suggests that the manipulative campaign affected the electoral outcomes and increased voter turnout in municipalities with a higher share of voters at risk of the unproven threat to housing ownership.
    Keywords: Sudetenland, voting, manipulative information, 2013 Czech presidential election
    JEL: D72 P16 P14
    Date: 2021–11
  10. By: Yugay, Stanislav; Götz, Linde; Svanidze, Miranda
    Keywords: International Relations/Trade, Food Security and Poverty
    Date: 2020–09–18

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