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Previous studies on state weakness are reviewed. Criteria and indicators that will capture stateness in the former Soviet region, are suggested. A preliminary ranking of post-Soviet states along national order, political viability, and economic efficiency, is proposed. It is concluded that most states in the region are considered weak, and that they still do not have the desire to modernize.

This paper focuses on the trafficking and smuggling of human beings from and through the former Soviet Union. It explores the reasons for the rise in the illegal movement of people; the groups which facilitate it; the demographics of the people who are moved and the business side, including the profits, the disposition of profits and the use of corruption to facilitate the trade. With the disintegration of state control over national territory, this mass movement of people often violates national laws and the national sovereignty of the countries of the Soviet successor states and the countries where the former Soviet citizens move illegally. The paper concludes that this trade mirrors and contributes to the overall downward development of the post-Soviet economies. In contrast, a comparative look at the respective Chinese developments indicates that trade in human beings tends to facilitate the growth of both the Chinese legitimate and illegitimate economies.

This commentary examines how closely Odling-Smee and Pastor (2002)'s account and their defense of the IMF's role matches the known facts and evidence on the Ruble Zone. This evidence shows that in the 12-24 months following the Soviet collapse, the IMF took the view that the prompt introduction of new currencies in the successor states would be more dangerous and damaging than sacking to the ruble. This article questions the assumptions behind this view, and argues that it was not correct for the IMF to confine itself to advising on the pros and cons of either course. The decisions by Post-Soviet states on the currency issue had a key bearing on whether IMF financial assistance would be forthcoming making, the IMF's `neutrality' as recorded by the authors objectionable in principle. The bias of IMF advice in favor of retaining the Ruble Zone reflected many other interests besides Russia's own. The real aim of this commentary is not point-scoring in long-past debates, but to share an historical understanding. JEL Classification Numbers: E52, F33, F42, P24 Keywords: Monetary policy, ruble area, national currencies, Our role at the IMF is not to wait for all such risks to be eliminated before taking action, but even in chaotic circumstances of history to sit down with [...]

When the fifteen Soviet successor states joined the IMF in 1992, the most pressing monetary question was whether to retain the ruble or to issue national currencies. IMF officials have argued that the IMF's role was to present the arguments for and against alternative arrangements. This is not how policymakers in the new independent countries and other observers perceived the IMF's position. In 1992, the IMF was seen as advocating retention of the ruble zone, although its position changed and in 1993 it supported introduction of new national currencies. This paper analyses why the IMF adopted a position, and discusses some of the consequences. JEL Classification Numbers: E52, F33, F42, P24 Keywords: Monetary policy, ruble area, national currencies, The International Monetary Fund (IMF) has been given a hard time over its policies towards the former Soviet Union. After a brief experience with the region, starting essentially from the [...]

This article uses material which has recently been made available from Russian archives to analyze the causes of repressed inflation in the Soviet consumer market. It finds that retail price subsidies, which increased as a proportion of state budget expenditure from four percent in 1965 to twenty percent in the late 1980s, intensified consumer market disequilibrium. The provision of these subsidies had negative effects on the market by maintaining the purchase power of households for consumer goods and by increasing the budget deficit. The unauthorized purchase of consumer goods by enterprises tended to increase during these years also.

Research is presented concerning the growing popularity of business teaching in the Western world among students from the Confederation of Independent States. The duplication of Western concepts in Eastern economies is discussed.

Byline: Dimitrios A. Giannias (1), O.S. Belokrilova (2), I.V. Shevchenko (3), Y. Chepurko (4), A. Iakovlev (4) Abstract: This paper presents a methodology for analysing inter-regional differences and identifying a suitable combination of policies for a set of regions. The methodology is based on the development of a composite index and is applied to compare (i) the members of the Former Soviet Union (FSU) and (ii) the regions of Russia. All variables considered and incorporated in the relevant index are (1) scaled from 0--100, so that the index is independent of units of measurement, and (2) weighted using survey results. According to the adapted regional development index Lithuania is on the top of the ranking followed by Latvia, Estonia, Ukraine, Belarus, Georgia, Russia, Armenia, Moldova, Azerbaijan, Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan. The FSU countries are positioned on a regional development index -- per capita income mapping to investigate whether emphasis should be placed on regional, environmental or sustainable development policies. Finally, an index that incorporates various socioeconomic components is computed for the regions of Russia which are subsequently classified based on the value of this index. This classification shows that the regions with the best index values are in the Central--Southern part of the country (with the exception of Sackha Republic, which is in the West). The regions with the lower index values are in the Western part of the country and in parts of Central Russia (Mariel republic, Moldovia Republic, Perm region). Author Affiliation: (1) University of Crete, Greece (2) Rostov State University, Russia (3) Kuban State University, Russia (4) Mediterranean Agronomic Institute of Chania, Russia Article History: Registration Date: 08/10/2004

The dismantling of collective farms in Eastern Europe and the former Soviet Union has created advantages and disadvantages for collective members who wish to start their own farms. Advantages include increased income and ownership of property. Disadvantages include the greater productivity of collective farming and a broader spread of risk among collective members.

Western economists studying the impact of former communist countries' transition to free market economy are slowly realizing the multifarious limitations of classical theories when applied to other cultures. People have behavioral facets beyond that of pursuing profits and asset accumulation. They have social ties such as membership in political parties. Also, classical theories do not incorporate corrupt wealth accumulation techniques such as embezzlement and theft which are prevalent in these countries.

Evidence shows that the former Soviet republics have failed to live up to expectations of strong economic growth following their transition to a market economy in 1992. Increased production and income normally associated with capitalism are notably absent in the Russian Federation. A study of the relative economic performance of Russian regions from 1992 to 1995 shows that the economic decline of these nations can be attributed to a disintegration in policy matters as well as differences in economic structure., Five years after Russia embarked upon its transition to the market in January 1992, its economy was still in decline. The year 1996 had been predicted by many as the [...]

Five books discuss the economic trends and reforms of former Soviet republics. Anders Aslund's 'How Russia Became a Market Economy' narrates the efforts of Pres Boris Yeltsin to hasten the marketization of the Russian Republic. Jeffrey Sachs focuses on the economic transformation of Poland in 'Poland's Jump in the Market Economy.' Marshall Goldman's book discusses the alternatives to neoliberal strategy. The comparison of the communist and post-communist economies are presented by J.L. Porket and Luiz Carlos Bresser Pereira et al. in their respective books.

The manner by which former communist countries cope with economic reforms is discussed in relation to extent of reform and impact of initial elections held during the socialism transition. The policies influencing the economic reforms are liberalization and privatization. Several factors such as state of economic condition during the fall of the regime, culture, state institutions and mode of political transition contributed to the economic reforms. The result of the initial election was considered as a predictor of the reform's extent.

'If you think privatization is corrupt, try without it.' --Anonymous official, in response to the Ukrainian parliament's decision to halt the privatization program on the grounds of possible corrupt methods [...]

Better domestic policies have powerful and statistically significant effects on economic growth. Improved policies also have positive effects on investors as indicated by foreign direct investment flows. For both transition countries of the former Soviet Union (FSU) and central Europe, the effect of policies on economic growth are significant. For FSU countries, however, there is a negative effect in the beginning which may indicate more unfavorable conditions.

The economic transformation of the former USSR and other former communist countries from a command economy into a market driven structure is not yet complete. The region remains mired in a state of economic recession, following a decline in production and trade, the influx of too many foreign goods and the death of the defense industry brought about by the end of the Cold War. The incomplete transformation of the region towards a market structure is accompanied by two other incomplete institutional changes which include the development of property rights and competition policies., Even during the 'stagnation' of Brezhnev, Alec Nove was drafting a blueprint for 'transition' out of the Soviet-type political economy. He was one of the clearest exponents of what would [...]

Economist Steven Rosefielde's argument that Stalinist economic development caused widespread misery in the former Soviet Union is an overstatement and an oversimplification. On the basis of household consumption, many Russians actually moved up during the five-year plans. Government consumption also indirectly benefitted consumers in the form of health services, education and housing. Government investments in capital formation contributed to future consumption possibilities and led to job creation., As one of the very few not subjected to criticism by Steven Rosefielde in his 1996 article in this journal (indeed I am cited with approval, if only in his [...]

Research has been undertaken into the development of free economic zones (FEZs) in the former Soviet Union (FSU). Particular attention was given to expectations and initial results. Plans to create FEZs in a particular area have generally been initiated in provincial regions where there have been serious economic difficulties. In contrast, central governments have been attempting to stem the flow of applications for FEZ status. There have been very mixed views about the initial achievements of FEZs already in operation.

Transition from a planned command economy to a market economy means tearing down a socio-economic setting where everybody follows orders and nobody bears individual responsibility for anything. The absence of personal responsibility does not promote ethical behavior in any walk of life. Today, the malnourished business ethics in the former Soviet Union creates a critical obstacle to economic development. The paucity of new official rules governing the conduct of business makes the transition process painful and difficult to people habituated to numberless rules and regulations. The first part of this paper surveys the most visible unethical business practices that have been reported by the Western media and those that are causing the largest number of complaints by the local governments and businessmen. The second part of the paper looks at ethical problems that have been under-reported.

The inability of households to convert their financial assets into purchasing power is the root cause of the ruble overhang that plagued the Soviet Union during its final days and the ruble shortages suffered by its successor states during their tenure. These shortages eventually led to the demise of the ruble monetary zone. Forced savings served as a buffer to a ruble overhang for years, until potential demand for goods and services outstripped supply. Like the ruble overhang, the ruble shortage was also an overhang in purchasing power, exhibited in the desire to liquidate bank deposits in return for currency.

The world's largest mineral industry in the former USSR presents immense prospects together with inherent risks for foreign investment. The interest of overseas firms in exploiting the gold resources has impelled all former Soviet Republics to sanction legislation permitting joint ventures in precious metals such as the gold joint ventures in Tajikistan. However, the region presents risks to investors in the forms of economic recession, corruption, crime, ethnic unrest and nationalism. Poor physical infrastructure and wavering policies also act as bottlenecks.

The pace of economic reforms in the post-Soviet republics is hardly uniform but the countries can be divided into four basic groups on the basis of consistency of reforms and total time periods. The Baltic states conducted radical reforms with increased GDP. Armenia, Georgia, Moldova and Kyrgyzstan have followed slower economic reforms to attain a semblance of growth and stability. Inconsistent reforms, inflation and decreased GDP are evident in Russia, Kazakhstan, Uzbekistan and Azerbaijan, while Ukraine, Belarus, Turkmenistan and Tajikistan have undertaken very little reforms.

Statistical data from 26 transition economies in the former Soviet Union and Eastern Europe are examined to determine the variables that affect economic development in said countries. The factors used in the model include official foreign aid, structural reforms and macroeconomic policy. Results show that the variables help the economy recover from transitional recession. Moreover, it also indicated the importance of the time used by the government to implement a stabilization program.

The economic reforms experienced by the former Soviet Union and Eastern European countries are characterized by four basic reform measures. These include structural adjustment, financial stabilization, systemic transformation and the development of a framework to foster economic development. Almost all of the countries in the Eastern bloc experienced financial crisis and political problems in implementing said reforms due to the industrialized nature of their economy.

The cash shortage in the Former Soviet Union (FSU) in 1992 was caused by limited supply of rubles which can only be produced by the Russian Federation. The asymmetric monetary condition resulted in higher interest rates, low consumption and capital losses particularly for other member states. Although the cash shortage prevented inflation in the FSU from reaching hyperinflation levels, it also destabilized the monetary union in the region during the period.

A modified transition model is used to evaluate the monetary and financial factors that affect economic transitions. Data on countries belong to the former Soviet Union show that successful transition is negatively affected by the absence of effective tax systems and financial intermediaries and reliance on seigniorage. Although strict monetary policy and selective taxation can help control high inflation and induce effective transition, its unreasonable speed can also lead to its failure.

Five years after the collapse of state socialism in Central and Eastern Europe and the consequent dissolution of the Soviet Union, democracy and free enterprise are spreading sporadically throughout the [...]

An economic development model with mutual positive externalities is derived. The concepts of binding, nonbinding and actual externalities are discussed while extremal algebra is used to analyze the model. The model was then used to study the economic development in the former Soviet Union where externalities had a major impact on the underdevelopment of markets and the imperfection of the price mechanism.

Bachman, R. D. (1991). Romania: A country study. Washington, DC: U.S. Library of Congress, Federal Research Division. Blanchard, O., Dornbusch, R., Krugman, P., Layard, R., & Summers, L. (1992). Reform [...]

This paper examines migration in Russia during the period that preceded the breakup of the former Soviet Union (FSU) and during the current transition period. An unusually rich dataset is used to conceptualize the impact that the political and economic collapse of a world superpower has on a migration system. A regional case study of migration in Yaroslavl' Oblast from 1989 through 1992 is used to examine the relevance of expected outcomes given standard theories of migration, empirical regularities found in capitalist economies, and past trends in the FSU. The data clearly show a migration system undergoing political and economic shocks. A significant decline of the volume of flows and a relative increase in the importance of interrepublic movement indicate disruptions. Increased relative mobility for those in the later years of the working-age population and increased importance of urban-to-rural migration flows are also important changes evident in this migration system undergoing shock. Key Words: migration, Russia, USSR, economic shocks.

The final decision about the full-scale privatization of state enterprises on the territory of the Russian Federation came in 1992[1]. First, there was an ukase 66 of January 1992, signed [...]

This paper examines the black market for foreign exchange in the former Soviet Union, using this analysis as a window on household behavior in asset markets under central planning. I argue that government restrictions on household behavior in goods and asset markets, combined with an absence of government control over the monetary situation, induced households to demand foreign currency in the black market for its value as an asset. I develop a model of the foreign currency black market which explicitly takes into account the institutional peculiarities of central planning. This approach clarifies the impact of high levels of government intervention in capital and foreign exchange markets. It also brings to light important areas of continuity between the pre-reform and reform eras in eastern and central Europe.

Western countries have pursued a short-sighted and misguided course regarding Russia by supporting personalities rather than reform and democracy. This shortchanges stability as an important element of Russia's future. Cooperation among elites and sane, non-disruptive economic reforms are crucial to Russia's short-term stability, though the creation of a firmly democratic nation-state is more important in the long run.

Lessons from the first four years of the post-socialist transition in Eastern Europe and the former USSR are discussed. Orthodox policy during the first years of the transition combined with the socialist institutional inheritance led to massive productivity and income losses and increasingly inertial inflations throughout the region. Overcoming such macroeconomic imbalances requires some degree of state intervention. Viable public enterprises should also be supported. Capital market reform should target insider financial control of production by players who accept self-restraining rules of the game. Reform should also involve social institutions and the state.

Lessons of the first four years of economic transition in Eastern Europe and the former USSR are discussed. An important lesson is that a transition to capitalism is possible, as in the case of Poland. Since inflation is the dominant problem facing post-socialist economies, efforts must be made to bring inflation under control. Likewise, macroeconomic stability must be a top priority for countries in the region.

Developments in petroleum extraction in the former Soviet Union will help the countries recover from their present economic difficulties. Kazakhstan, Azerbaijan, Turkmenistan and Uzbekistan are the biggest producers of petroleum among the new states, with Kazakhstan also producing natural gas. A large project, involving a group of western companies, has been undertaken in Kazakhstan to exploit petroleum reserves in the offshore Caspian. The situation depends on negotiations with foreign companies that involve large projects.

The economic and political implications of the decision to depart from the ruble zone by Russia and other Former Soviet Union (FSU) countries is examined. It is shown that such a decision will generate large income and output contractions for Baltic states, while minimal effects will be experienced by Kazakhstan and Turkmenistan. Short-term cost and benefit analysis indicates a likely return to the zone by the former countries, while the latter will establish new currencies.

China's economic success, in contrast to that of the Soviet Union, is due to profoundly different economic and political strategies. China has emphasized areas where limited government investments would produce [...]

Statistical data on former Soviet republics, pertaining to the period between 1970 to 1992, revealed bias and inconsistencies. The former USSR Goskomtat attempted a change over from gross figures to net figures. The Goskomtat was unable to cover non-state economic activity during the Gorbachev years. Most figures on production, consumption and trade are underestimated, and the success of the Goskomtat's efforts to streamline methodology may improve the situation.

An analysis of the economic development of former Soviet Republics reveals a general fall in national income and production after two years of independence. Rapid inflation has caused a drop in living standards. The task of building national integration and unity has relegated economic change to the background. Non-Russian states have attempted to redefine relations with Russia.

Reforms geared toward establishing market economy in the former Soviet Union will fail or yield rewards after several years in the absence of a stable currency, despite the package of Western aid. The US can facilitate the generation of a stable currency in new democracies by purchasing Russian military and aerospace technologies.

Independent currencies, free trade, full currency convertibility, free capital movements and market dictated exchange rates can form part of the Eurodollar approach for global transactions as an answer to the currency crisis in the former Soviet republics and the newly independent Eastern European republics. Consumers and entrepreneurs can allocate consumers for internationally traded goods based on the information on interest rates and world prices that Eurodollars will offer.

The advantages of disinflation, a commitment to stabilizing external and internal money values are greater than the disadvantages of a currency board in the former Soviet Union such as those related to the budget and the government's inability to function as a leader as last resort. The limitations of a fixed exchange rate system and the lack of uniformity in determining normal wages and the exchange rate are other areas of concern.

Economic reformers in the former Soviet Union should employ the currency board system and introduce a stable convertible currency if it desires a modern market economy in the transition from socialism to capitalism. A stable currency is a good medium of exchange and a good unit of account. A currency board will possess unrestricted convertibility and sufficient resource and can provide for a local issue of currency.

Analysis of a strategy to link the ruble to a foreign agency or to form an official gold standard confirms the benefits of the gold option in stabilizing the ruble in the former Soviet Union. Gold convertibility ensures that those having rubles can monitor the officials' ability to fulfill the obligation to exchange their notes for gold coin or bullion. Monetary mismanagement by the foreign nation will not affect Russia as it would in case of the currency.

A gold price target for the monetary policy in the former Soviet Union is preferable to an inflexible connection to the gold market or any other commodity market because it is adequately flexible to guarantee the error tolerance required by the economy. This policy will allow the authorities to acquire the seignorage revenues implied in the promises of monetary services to the economy.

Suggestions regarding a currency board for monetary reform in the republics of the former Soviet Union and the Commonwealth of Independent States overlook the fact that no government is ready to sacrifice its right over currency supply. Competition in the supply of inside or bank money, even bank notes, redeemable in base money, is preferable to corruption in the supply of outside or base money.

Those vested with the responsibility of arresting inflation in the former Soviet Union should liberalize foreign trade to develop a competitive environment. They should lower government spending to erase the budget deficit. They must privatize state property, streamline the taxation system and ensure stringent regulation of credit and monetary release. They should encourage and aid entrepreneurship.