As the Estonian experience with local taxes has turned out in the last decade small rural municipalities have not been able to profit from the right to collect local taxes. Tax collecting and administrative costs have been too high. Therefore the local administrative system did not succeed and developed into a grants-in-aid system during the transition process. But from an allocational point of view such a development is not satisfactory. Incentives for local governments to save taxpayers' money and to seek new industrial establishments intensively are lacking. Only an administrative system characterised by institutional competition can solve these problems. In this article the advantages of institutional competition between local jurisdictions in Estonia are discussed. Additionally, a concrete system of competing enlarged counties is recommended.

Southeast Asia is of highest geostrategic interest for China as a rising Great Power as well as for the U.S. and its ally Japan. Since the “Pivot to East Asia” of the Obama administration in Washington in 2011 observers are discussing a “New Great Game” in the region. But has China already established a “backyard” by its economic activities in Southeast Asia and in particular in ASEAN countries? What is the spatial pattern of China’s activities? As an analysis of FDI stocks as well as trade related data show ASEAN countries can be divided into several groups. (1) China’s small neighbour Laos dominated by Chinese FDI. (2) Countries like Cambodia and Myanmar partly dominated by Chinese FDI. (3) Countries with different trade ties to China but mostly strong military or diplomatic ties to the U.S. like Singapore, the Philippines, Vietnam, Thailand, Malaysia, Indonesia, and (4) the independent Brunei Darussalam. Therefore, Southeast Asia and in particular ASEAN cannot be called a Chinese “backyard” yet. But if U.S. president Trump withdraws the U.S. attention from the region China could be able to achieve a hegemonic position in the region soon.

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The transformation of former socialist economies in Central and Eastern Europe is a still continuing long-term process. Since explanations and political recommendations by mainstream economics have not been sufficient, research on methodology and theory of transformation is necessary still today. In this paper an evolutionary approach will be introduced to explain the phenomenon of “transformation” as borderline case of long-term institutional evolution. In concrete it will be described as adaptive-imitative step within institutional competition caused by “exit” and “voice” in the Hirschman sense, initiated by political entrepreneurs, channelled by cultural restriction and path dependency and - as consequence of the evolutionary approach - independent of scientific valuation.

No abstract