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Initial Endowments and Economic Reform in 27 Post-Socialist Countries

Author

Listed:
  • Ariel BenYishay

    (School of Economics, Australian School of Business, the University of New South Wales)

  • Pauline Grosjean

    (School of Economics, Australian School of Business, the University of New South Wales)

Abstract
This study explores how initial endowments at the start of transition have shaped reform outcomes and reform trajectories in 27 former communist countries in Europe andCentral Asia. Countries of the former Russian Empire that had a large resources sector at the start of transition underperformed other countries in terms of the speed and the depth of economic reforms. The effect is particularly strong for privatization, enterprise restructuring and competition policy. Within country, Ottoman or Russian provinces that had a large natural resources sector in 1989 have a lower share of entrepreneurs and of small and medium sized enterprises today and also experience endemic corruption. Our results indicate that the propensity, or ability, of special interest groups to capture the reform process that would erode their rents were facilitated by the quality of institutions whose foundations go back centuries; and that the effects on the local economy are real.

Suggested Citation

  • Ariel BenYishay & Pauline Grosjean, 2014. "Initial Endowments and Economic Reform in 27 Post-Socialist Countries," Discussion Papers 2014-22, School of Economics, The University of New South Wales.
    • Handle: RePEc:swe:wpaper:2014-22
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    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2014-22.pdf
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    Cited by:

    1. Patrick Domingues & Felipe Starosta de Wald, 2015. "Export diversification and the legacy of the Soviet Union," Erudite Working Paper 2015-03, Erudite.
    2. Ichiro Iwasaki & Taku Suzuki, 2016. "Radicalism Versus Gradualism: An Analytical Survey Of The Transition Strategy Debate," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 807-834, September.
    3. Horváth, Roman & Zeynalov, Ayaz, 2016. "Natural resources, manufacturing and institutions in post-Soviet countries," Resources Policy, Elsevier, vol. 50(C), pages 141-148.
    4. Matteo Fiorini & Bernard Hoekman & Clément Malgouyres, 2018. "Services policy reform and manufacturing employment: Evidence from transition economies," The World Economy, Wiley Blackwell, vol. 41(9), pages 2320-2348, September.
    5. Mavisakalyan, Astghik & Minasyan, Anna, 2022. "Mining and Mistrust in Government," GLO Discussion Paper Series 1164, Global Labor Organization (GLO).
    6. Christian-Lambert Nguena, 2022. "On a comparative analysis of the impact of democracy on regulatory reform," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 19(2), pages 195-225, December.
    7. Joanna Tyrowicz & Lucas Velde & Jan Svejnar, 2017. "Effects Of Labor Reallocation On Productivity And Inequality—Insights From Studies On Transition," Journal of Economic Surveys, Wiley Blackwell, vol. 31(3), pages 712-732, July.
    8. Amin, Mohammad & Djankov, Simeon, 2014. "Democratic institutions and regulatory reforms," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 839-854.
    9. Jan Svejnar & Joanna Tyrowicz & Lucas van der Velde, 2015. "Productivity and Inequality Effects of Rapid Labor Reallocation – Insights from a Meta-Analysis of Studies on Transition," Working Papers 2015-11, Faculty of Economic Sciences, University of Warsaw.
    10. Tarabar, Danko, 2017. "Culture, democracy, and market reforms: Evidence from transition countries," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 456-480.
    11. Dombi, Akos & Grigoriadis, Theocharis, 2017. "Ancestry, Diversity & Finance: Evidence from Transition Economies," Discussion Papers 2017/4, Free University Berlin, School of Business & Economics.
    12. Araújo, Inácio Fernandes de & Jackson, Randall W. & Ferreira Neto, Amir B. & Perobelli, Fernando S., 2020. "European union membership and CO2 emissions: A structural decomposition analysis," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 190-203.
    13. Inácio Araúgo & Randall Jackson & Amir B. Ferreira Neto & Fernando Perobelli, 2018. "Environmental Costs of European Union Membership: A Structural Decomposition Analysis," Working Papers Working Paper 2018-04, Regional Research Institute, West Virginia University.
    14. Salmensuu, Olli, 2017. "Macroeconomic Trends and Factors of Production Affecting Potato Producer Price in Developing Countries," MPRA Paper 79163, University Library of Munich, Germany.

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    More about this item

    Keywords

    corruption; initial endowments; natural resources; persistence; transition;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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