Transition Report 2013 Stuck in transition?

CH3 180sq

Facts at a glance

years after the start of the transition process, economic institutions in the transition region are, on average, still weaker than in other countries with comparable levels of income.

0.5 The correlation between measures of democracy and regulatory quality in a global sample of countries.

Cover 180sqV2


-year period prior to accession saw a peak in terms of institutional improvements in EU accession countries.

of Kyrgyz SMEs say that unofficial payments are required in everyday business.

Economic institutions

Annex 3.2. Sources and definitions of variables for cross-country regressions

Variable Source Description
WGI average World Bank, 2012 Average of four Worldwide Governance Indicators: rule of law, government effectiveness, control of corruption and regulatory quality. Each index is on a scale of -2.5 (lowest rank) to 2.5 (highest rank).
Distance to the frontier World Bank, 2013 This measures an economy's distance to the frontier on a scale of 0 to 100, where 0 represents the lowest performance and 100 denotes the frontier (that is to say, the most business-friendly regulations) in the Doing Business report.
Transition indicator average EBRD, 2013 Average of six country-level transition indicators (large-scale privatisation, small-scale privatisation, enterprise restructuring, price liberalisation, reform of the trade and foreign exchange system, and competition policy). The measurement scale for the indicators ranges from 1 to 4.33, where 1 represents little or no change relative to a rigid centrally planned economy and 4.33 represents the standards of an industrialised market economy.
Polity2 Polity IV, 2013 The "Polity score" captures a regime's level of democratisation on a 21-point scale ranging from -10 to +10, where +10 denotes the highest score for democratisation.
Natural resources EBRD calculations, based on WTO data Mining as a percentage of exports.
Trade openness EBRD calculations Trade openness is structurally adjusted following the adjusted trade intensity approach used by Pritchett (1996). Values in the sample range from -1.2 to 3.4.
Financial openness Chinn-Ito index Index measuring a country's degree of capital account openness. The index ranges from -1.86 to 2.44.
Income Penn World Tables 8.0 Log of GDP per capita in 2005 US dollars at purchasing power parity.
Ethnic fractionalisation Wacziarg et al., 2012 Measures the probability that two randomly selected individuals in a given community belong to different ethnic groups.
Distance from the equator CEPII Absolute latitude.
Landlocked CEPII Dummy variable.
Ruggedness Nunn and Puga, 2012 This index quantifies topographic heterogeneity (small-scale irregularities) in a country. Values in the sample range from 0 to 6.2.
State antiquity index Chanda and Putterman, 2007 The state antiquity index (version 3) measures the extent of each country's experience with nationhood and is based on the following criteria for each country: (1) the existence of a government at the tribal level; (2) whether the government is local or foreign-based; (3) how much of the territory of the modern country was ruled by this government.
Majoritarian system Comparative Political Dataset II Discrete variable that takes the following values: 0 - proportional representation; 1 - parallel system (the chamber is elected using both majoritarian and proportional representation systems, and each is allocated a fixed number of seats); 1 - compensatory system; 2 - modified proportional representation; 2 - majoritarian system.
Presidential system Comparative Political Dataset II Discrete variable that takes the following values: 0 - parliamentary system; 1 - semi-presidential system, dominated by parliament; 2 - semi-presidential system, dominated by president; 3 - presidential system; 4 - other system.
Polarisation index Frye, 2010 Political polarisation is defined on the basis of the number of seats in parliament held by the largest opposition party.