Transition Report 2013 Stuck in transition?

Convergence
at risk

Convergence at risk

Income convergence at risk

Reforms in the transition region have stalled since the mid-2000s, and in some countries reversals have occurred in specific market sectors. Long-term growth projections suggest that unless reforms are revived, living standards in most transition...

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Potential causes of lower long-term growth

It is often argued that the crisis might have damaged long-term growth prospects in transition countries because it may imply permanently lower levels of external financing. Pre-crisis growth in many countries in the transition region was boosted...

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The end of the productivity catch-up

After the recession in the early 1990s most countries in the transition region saw their convergence towards Western income levels accelerate, but in a way that differed fundamentally from that of other fast-growing emerging markets. Physical...

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Reform stagnation

Reform stagnation
In the early 1990s countries in the transition region faced sizeable productivity gaps due to inherited capital and production structures, but also owing to inadequate and ineffective institutions supporting economic activity. Structural reforms,...

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Reform reversals

It is tempting to conclude from the analysis above that transition countries which are stable democracies – the new Member States of the European Union, for example – should have no problem completing their transition and developing market...

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Long-term growth prospects

In order to analyse the long-term growth prospects in transition economies, an empirical analysis was undertaken that relates investment, savings and productivity growth to countries’ institutional quality, levels of human capital, population...

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Conclusion

Economic reform has stagnated across most of the transition region since the mid-2000s, with the marked exception of the Western Balkans (where reform has been supported by the EU approximation process). In less advanced transition economies...

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Box 1.1. 
Forecasting long-term growth in transition economies

The “productivity catch-up” phase associated with opening up to the outside world and international integration has ended in most transition economies. Much work remains to be done to bring their institutions and market structures up to the level...

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References

D. Acemoğlu and J. Robinson (2012)“Why nations fail: the origins of power, prosperity, and poverty”, Crown Business. D. Acemoğlu and S. Johnson (2005)“Unbundling Institutions” Journal of Political Economy, Vol. 113, No 5, pp. 949-995. T....

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