A Note on Initial Conditions and Liberalization during Transition

Krueger, Gary; Ciolko, Marek

doi:10.1006/jcec.1998.1554

Cited by 56 publications

(33 citation statements)

References 9 publications

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“…Many authors (Heybey, Murrel, 1999;Kruger, Ciolko, 1998;Godoy, Stiglitz, 2004) have pointed out to the endogeneity of liberalization variable: not only performance is explained by the speed of liberalization, but also liberalization itself is a function of performance (if performance is poor, it is more difficult for the government to push market reforms further). Krueger and Ciolko (1998) demonstrated through constructing the instrumental variable (by linking liberalization to initial conditions specified only as the pretransition share of exports in GDP) that the hypothesis of the endogeneity of the liberalization variable cannot be rejected.…”

Section: Dealing With the Endogeneitymentioning

confidence: 99%

Shock Therapy versus Gradualism Reconsidered: Lessons from Transition Economies after 15 Years of Reforms

Popov

2007

Comp Econ Stud

114

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Section: Dealing With the Endogeneitymentioning

confidence: 99%

Shock Therapy versus Gradualism Reconsidered: Lessons from Transition Economies after 15 Years of Reforms

Popov

2007

Comp Econ Stud

114

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“…The discussion was spurred by the finding of De Melo et al (1996) of a strong positive relationship in a cross section of 26 countries, with data covering the early 1990s. The defining characteristic of the ensuing debate was a general lack of consensus on the true nature of this relationship (see, for example, De Melo, Denizer and Gelb, 1996;Havrylyshyn, Izvorski and van Rooden, 1998;Krueger and Ciolko, 1998;Heybey and Murrell, 1999;Berg et al, 1999;Wolf, 1999;Fischer and Sahay, 2000;Popov, 2000; and surveys by Coricelli, 2002, andBabetskii andCampos, 2006). While several studies replicated the finding of a positive impact of reform policies on growth, others found a weak or insignificant relationship.…”

Section: Introductionmentioning

confidence: 99%

Mind the break! Accounting for changing patterns of growth during transition

Fidrmuc

Tichit

2009

Economic Systems

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We argue that econometric analyses of growth in post-communist countries are vulnerable to structural breaks across time and/or countries. We demonstrate this by identifying structural breaks in growth for 25 countries and over 18 years. The method we use allows identification of structural breaks at a-priori unknown points in space or time. The only prior assumption is that breaks occur in relation to progress in implementing market-oriented reforms. We find robust evidence that the pattern of growth in transition has changed at least three times, yielding four different models of growth associated with different stages of reform. The speed with which individual countries progress through these stages differs considerably.

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“…A number of recent studies (De Melo, Denizer, Gelb and Tenev, 1997, p. 25;Kruger and Ciolko, 1998;Campos, 1999;Heybey, Murrel, 1999;Popov, 2000) found no evidence that the flow of reforms affects output change in transition economies. But income change may well be affected, since only successful reformers are able to attract substantial amounts of foreign capital: Estonia, for instance, in the second half of the 1990s had deficits on current account equivalent to about 10% of GDP, whereas Russia had to earn a surplus of about the same size to finance the capital flight.…”

Section: Preliminary Conclusionmentioning

confidence: 99%

A comparative assessment of the economic development of regions: Methodological issues

Криничанский¹,

Лаврентьев²

2017

RETP

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The goal of the paper is to examine the major non-policy and policy factors that account for the varying patterns of change of output and incomes in Russia's regions. It is found that initial conditions (resource advantages) and the strength of the institutions (the ability of the authorities to contain investment risk and shadow economy and to promote business climate favourable for the emergence of small businesses) have considerable impact on output and investment. But there is no evidence that economic reforms in the regions (deregulation of prices, small privatisation) pay off in a sense that they lead to better output and investment dynamics.In contrast, for interpreting regional differences in per capita income change, reform progress is an important explanatory variable. It turns out that the major impact of reforms was not to boost output and investment, but to redirect incomes into the pro-reform regions (also the regions with larger shadow economy, lower investment risk and better business climate for small enterprises, liberal-minded electorate and lower increases in crime rates). This "anti Robin Hood" redistribution effect of reforms could be explained by interregional transfers of business incomes by large companies (with head offices in pro-reform "liberal and shadow safe heavens"), trading companies and banks. Moscow is the most obvious example of such a region, but this effect is observed even after controlling for the capital city phenomena through the Moscow dummy variable. The intergovernmental financial flows were directed generally to poorer and worse performing regions, but they were not enough to counterweight the business transfer effect.--

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A Note on Initial Conditions and Liberalization during Transition

Cited by 56 publications

References 9 publications

Shock Therapy versus Gradualism Reconsidered: Lessons from Transition Economies after 15 Years of Reforms

Shock Therapy versus Gradualism Reconsidered: Lessons from Transition Economies after 15 Years of Reforms

Mind the break! Accounting for changing patterns of growth during transition

A comparative assessment of the economic development of regions: Methodological issues

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