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The effects of privatization on foreign owners, domestic owners and non-state owners are examined, based on experiences during the last fifteen to twenty years in the post-communist economies and China. Its impact on efficiency, profitability, revenues and other indicators are distinguished separately, and studies are differentiated based on their econometric methodology to arrive to more credible results.

The effect of the trends of corporate governance in Central and Eastern Europe on the returns on investments in these regions between 1999 and 2003 is described.

The performance of financial institutions in Eastern Europe following effective economic policies is examined.

The effect of speed of reforms relating to transition from planned economy to market economy on the returns to education is assessed based on data from China, Russia, and Central and Eastern Europe.

The indirect impact of European Union (EU) integration on the Eastern applicant countries by exposing the underlying logic of enlargement and analyzing the implications of that logic for democratic politics is discussed. The findings are linked with the EU democratic deficit and some conclusions regarding future prospects of democracy in and democracy promotion by the enlarged EU are drawn.

The EU accession processes for the countries included in the collection are examined and the distinctive features of the set of referendums, particularly the comparatively high levels of Yes vote and low levels of turnout are discussed. The study provides an analytical framework for the collection and more broadly attempts to explain the results and turnout in these and potentially other referendums.

The impact of trade liberalization on the internal geography of a domestic country is analyzed in a model where both the dispersion and agglomeration of economic activity are driven by endogenous elements. The economic integration was found to foster the location of economic activity in regions having pronounced advantage in terms of access to international markets impact.

The potential new members from Eastern Europe are forced by the European Union to follow the standards regarding the treatment of national minorities. The treatment of the Russian minorities in Latvia and Estonia and in Slovakia is examined.

This paper analyses the importance of developing market-enhancing institutions for restoring economic growth in transition economies during 1991-98. The papers main finding is that the development of an institutional framework has indeed a significant positive impact on growth, but that progress in achieving macroeconomic stabilisation and implementing broad-based economic reforms remain the key determinants of growth in transition economies. Comparative Economic Studies (2003) 45, 2-24. doi:10.1057/palgrave.ces.8100005 Keywords: growth, institutions, transition countries, public policy JEL Classifications: P2, P21, P47, O21, `When I was growing up in Peru, I was told that the farms I visited belonged to farming communities and not to the individual farmers. Yet as I walked from [...]

This paper discusses the implications of agricultural and agricultural policy with the entry in the European Union of Central and Eastern European countries which are undergoing rapid changes and reforms.

This study deals with the extent and content of 'Europeanisation' in the Central and East European (CEE) countries at the level of market making. It argues that Europeanisation at the level of market making was about creating states with strong capacities to preserve and regulate markets and with increased and reconstructed administrative and planning capabilities. The most successful CEE countries with their strong states and weak social and economic actors converged towards a moving target, that is, towards EU countries in the process of supranational market making with dramatically different constellation of powers among key economic actors. The paper discusses the specifics of national level market making in the CEE countries, the factors of divergence within the region, and the 'diverging convergence' between the CEE and the EU countries., MARKET MAKING AND EUROPEANISATION The 1990s was the decade of market making in both parts of Europe. This was the decade of the radical extension of the internal market and [...]

This paper examines some of the Eastern European countries (excluding Russia) that achieved a degree of success in constructing financial architectures after the collapse of the Soviet Union. This paper also describes some of the problems that still persist, especially within the banking and also the declining number of businesses throughout Eastern Europe.

This paper provides sources of research information that analyze the effects of economic change and development that has occurred in the former Soviet Union. The access points were designed for economists interested in economic analysis.

This paper analyzes the impact of economic development after the collapse of the Soviet Union and the impact it had upon employment and production output.

The author points out that successful economic development from the former Soviet Union command structure to a market-oriented economy has had mixed success in the Commonwealth of Independent States. Reasons for these results are described.

This paper describes how countries, especially Eastern European countries and China, can maximize their efforts at reforming their economic structures and insuring that the process is not reversed.

This article examines the monetary policy road of the ten candidate countries from central and eastern Europe (CEE-10) on their way to EU accession and ultimately to adoption of the euro. The authors proceed in three steps. First, they describe the evolution of the monetary regime of the CEE-10 since the demise of the centrally planned economic system. Second, they deal with the currency crises of emerging market economies in the 1990s and develop potential lessons for the CEE-10. Third, they delineate the road map for the candidate countries by looking at both formal requirements and economic challenges that these countries have to meet before they can adopt the euro.

Transition from a centrally planned economy to a market economy has proved to be an enormous challenge. Differences exist between individual countries regarding the scale and efficiency of the reform [...]

An analysis is presented on the response of Eastern European households to labor market restructuring in the postcommunist era. It is shown that many households have created strategies involving economic activities that exist outside of free market relations, which were developed to counteract growing social inequality and uneven employment in the capitalist system.

Between 1990 and 1996, competition laws have been adopted in 22 of the 26 transition economies of eastern Europe and the former Soviet Union. Yet there is very little systematic evidence about implementation experience, and none regarding its impact on intensity of economy-wide competition. The novelty of this paper is twofold. First, it defines a range of competition policy implementation criteria relevant for transition and developing economies along the three main dimensions of enforcement, competition advocacy and institutional effectiveness. These classification criteria go significantly beyond the traditional emphasis on abuse of dominance, agreement and merger cases. Second, it provides an assessment of the effectiveness of competition policy implementation across 18 countries along these criteria, based on data from each country's competition authorities and supplemented with assessments by legal practitioners. The relationship between competition policy and intensity of competition is explored, with the latter captured by a measure of economy-wide enterprise mobility that reflects selection effects. We find a robust positive relationship between effective competition policy implementation and expansion of more efficient private firms.

The privatization process in Eastern Europe is not irreversible. Future governments may want to (partially) expropriate successful private firms in order to subsidize unsuccessful ones. We use a simple median voter model to predict the policy of future governments. It is shown that there will be less expropriation the more shares were distributed for free to the population. Diversified mass privatization is better than insider privatization. Furthermore, people should be discouraged to sell their shares for cash. Finally, we show that some free distribution of shares may induce more investment and increase expected profits and privatization revenues for the government. Keywords: Mass privatization; Transition; Expropriation; Political economy

What is the future for East Europe? Academicians are split on this issue. Some believe in the old syllogism pervasive in these former communist nations which states 'If it had [...]

The discrepancy between China and Central and Eastern European countries' (CEECs) economic development can be attributed to the two region's varying economic goals and objectives. While CEECs pursue market-oriented trading policy and structural reforms, China's trading programs are aimed at promoting over-all growth and sectoral improvement. Further, European countries favor the adoption of open-market economy, while China seeks to capitalize on fostering decentralization and exemption from controls.

This paper reviews the theory and empirical evidence on the main policy issues relating to the pace, credibility and sequencing of structural reforms in less developed countries and post-socialist economies. It highlights areas where there is broad consensus as well as widespread disagreement among policymakers and economists, pointing out along the way areas where more research would be useful. Key words - Latin America, Eastern Europe, stabilization, trade liberalization, financial sector reform

We focus on the role of fiscal policies in macroeconomic stabilization in eastern Europe and assess the sustainability of fiscal policies for the central and eastern European economies in transition. [...]

This Assessment provides an overview of the stylized facts and the underlying economic issues involved in transition, with a focus on the more successful reforming countries. Microeconomic, macroeconomic, and institutional [...]

Monetary policy rarely accomplished stabilization if sound fiscal policy had not already been established. Distinctions between different nominal anchors can be exaggerated. Any credit crunch owed more to micro distortions [...]

The paper analyses the major challenges for macro-economic policies and institutions of Central and East European countries raised by accession. The analysis starts by proposing an interpretation of the economic conditions that the CECs would need to satisfy in order to become members of the European Union. The paper then proceeds to discuss the acquis communautaire in the area of EMU which the new members will have to implement, at least as non-participating countries. It is argued that EMU should not be an immediate target for the majority of the Associated Countries (ACs). The successful conclusion of the transformation calls for a certain degree of flexibility in the conduct of economic policy which the adoption of too strict criteria could actually prevent. This does not mean that the effort to follow sound economic policies should be discontinued. The paper simply concludes that a too short policy horizon should not constrain the ACs' ability to converge or to undertake macro-economic stability-oriented policies in the future. Keywords: European Union; Eastern Europe; Enlargement; Macroeconomic policy; EMU

The North Atlantic Treaty Organization should help its Eastern and Central European neighbors succeed in their economic development efforts as a precondition for long-term peace and stability in the continent. These countries have pursued different paths of economic growth ranging from a gradualist approach to a more drastic one. Whatever their approach, their eventual success would hinge on their openness to trade with the outside world.

Government-led gradualism and wholesale application of bankruptcy are ineffective in dealing with loss-making state-owned enterprises (SOEs) in Eastern Europe. A more efficacious solution would be to create an incentive framework and legal environment to encourage major nongovernment creditors to initiate restructuring. Poland's successful enterprise reform program indicates that a decentralized, nongovernment approach to dealing with loss-making SOEs is a viable method.

The simulated promotion of a key industrial sector in Poland resulted to increased macroeconomic performance proving the effectivity of a temporary industrial policy in facilitating industrial transition in Eastern Europe. It also illustrates that increasing efficiency in key sectors by closing down inefficient enterprises, instead of making new investments, will enable industrial restructuring at a politically acceptable pace. The selection of key sectors should be based on their respective roles in the economy as indicated by linkage analysis., 1. Introduction One of the paradoxes confronting the reformers in Eastern Europe is that unprecedented state action is needed in order to reduce the role of the state in the [...]

The transformation from centrally planned economies to market-based economies appears to be a complicated process. Much attention has been paid to such macroeconomic aspects as price liberalization, stabilization, and privatization. [...]

Introduction The fall of the iron curtain and the drastic changes in the political system of former socialist countries in Eastern Europe has led also to a collapse of the [...]

Introduction The implementation of the Polish stabilization programme in 1990 accompanied by radical system-transforming reforms was followed by an unexpectedly considerable output decline. This slump which originally was defined as [...]

Introduction The process of economic reform began in most Eastern European countries with all or most of the central planning system still in place. Most of these reforms were piecemeal [...]

This paper presents an analysis of reforms using a simple general equilibrium model with production. The model illustrates some of the distortions remaining in the eastern European countries as they adopt market-oriented policies, and it shows that price reforms should take priority if simultaneous reform is not possible. Specifically, we examine reforms of relative prices of output goods and liberalization of the capital market. The model is solved numerically, showing that restrictions on capital mobility should be retained until after price distortions have been removed.

The economic restructuring in Eastern European countries and the former Soviet Union requires monetary policies to stabilize the currency and decrease inflation. Currency management techniques must include the maintenance of a flexible exchange rate supported by strong local monetary institutions and goals. The International Monetary Fund plays an important role in helping countries manage their currency regime.

Privatization is proceeding slowly in many Eastern European countries. This is largely because the insiders, who currently have control but not property rights to the firms, oppose outsider privatization. Privatization would proceed faster if governments decided to go the insider privatization route. There would seem to be two strong efficiency arguments for doing so. First, insider privatization aligns control and property rights. This gives the right incentives to insiders. Second, if for some reason, insiders cannot do the job themselves, they will have the right incentives to sell the firms to those outsiders who can. Our paper focuses on this second argument. We conclude that it is not as obvious as it seems. There is a wedge between the value of the firm to insiders and the value of the firm to outsiders. Depending on the details of insider privatization, and on the details of the resale process, this wedge may prevent resale, and thus prevent desirable restructuring. Keywords: Privatization; Transition; Restructuring; Ownership; Eastern Europe

The process of economic transition in Eastern Europe has brought to the fore the essential bond between stabilization and growth. The experience of most transition economies validate the assumption that for growth prospects to be realized, annual inflation should not exceed 50 percent. Since 1989, the East European transition economies have witnessed substantial reduction in inflation rates as fiscal deficits have been effectively contained. A pegged exchange rate, together with structural reforms further aid disinflation and the revival of growth through stabilized economic processes.

The experiences of transformed economies show that increasing privatization is generally accompanied by an absence of transition to private ownership of productive assets. While the focus on mass privatization in transition economies overlooks such variables as effective resource allocation and corporate governance, less than complete privatization has often been known to function equally efficiently in such economies. In transitional societies, therefore, the shift from socialism to capitalism involves the functional co-existence of private businesses with state enterprises.

Transition from communism has progressed at a phenomenal rate judging by the overall achievements of East European economies since 1989. The indexes of liberalization and deficit reduction demonstrate that policy transition has been evenly realized in most states. However, structural progression across a broad spectrum such as levels of inflation, and per capita income shows a marked variation in economic performance. As local conditions dictate policy outcomes, reforming economies need to focus on structural transformation in order to overcome serious instances of transitional recession.

The liberalization and privatization policies improve the performance of the telecommunication sector in Central/Eastern Europe and the Soviet Union. The success is mainly due to tariff restructuring, market size and expected growth rate, investor risk perception, policymakers' uncertaintyand wider external benefits' perceived importance. The strategy of reforms for the short to medium term shows the current conditions and political realities along with the needs of customers.

Poor countries must specialize in standardized, labor-intensive commodities. Middle-income countries may have a richer menu of options if their labor force is reasonably well educated and skilled. The multiplicity of equilibria is due to a coordination problem inherent in activities that require specialized inputs. If no intermediate inputs are presently produced, there may be little incentive for any single firm to do so on its own. The economy may get stuck in a low-wage, low-tech equilibrium. An investment subsidy or a minimum-wage policy can enhance welfare by moving the economy to a superior equilibrium. Key words: Wage policy; Trade strategy

The economics of transition is the study of the economic transformation from one economic system - central planning - to another, a market system. This paper discusses a number of issues in reform strategy and experiences with reform of Eastern Europe. It is argued that the economics of transition has a wider significance that transcends specific issues of reform strategy and individual country experience. That significance lies in two areas; as a 'living test' of the neoclassical model which underpins the reform strategy and as an ultimate challenge to the economics discipline.

The economic reform programs proposed by the IMF and World Bank for Eastern Europe should have considered the nature and characteristics of Soviet-type economies before the stabilization and reform programs were applied. The characteristics include excess inventories, enterprise behavior and structural deformations. Cognizance of these characteristics would have minimized the costs of transition and the public could have been prepared for the consequences of the reform programs.

Coal mining and consumption pollutes the environment and should thus be minimized by imposing taxes on coal production and consumption. However, governments in several Western European countries subsidize coal production while most Eastern European countries subsidize coal consumption. Neoclassical political economic theory can explain how governments could adopt such inappropriate behavior. Political pressures have caused the dismantling of some coal subsidies. Such pressures combined with commercial diplomatic pressures can help bring about the end of coal subsidies.