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Globalization and Inequality in CIS Countries: Role of Institutions 1
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In this article, the authors investigated the negative effect of globalization and trade opening on incomes in transition countries and concluded that trade policy per se was less important than the ability of governments to enforce it.Abstract:
The process of opening and integration into the world economy in the CIS countries has been part of a more complex process of transition from the planned to market economy. Over the last 10 years most of these countries have liberalized their trade regimes versus non-CIS countries, introduced their own currency, and to some extent liberalized flows of direct and portfolio investment. These and other reforms were accompanied by a pronounced output decline, an increase in poverty rates and inequality indexes. Of course, most of these changes in output and income inequality are attributable to the transition process. However, it is still interesting to know whether globalization and trade opening have enhanced or, on the contrary, decreased the negative effect of transition on incomes in transition countries. Comparison of outcomes in various countries suggests that trade policy per se was less important than the ability of governments to enforce it. Countries, where reforms were implemented slowly, but the government institutions did not collapse, experienced smaller overall output decline, and smaller increase in inequality. Countries with weak governments often performed as “passive globalizers”: the trade-to-GDP ratios in them were quite high, partly accounting for capital flight. In contrast to active globalizers, output in these countries declined, while poverty and inequality increased. However, the worst results were seen in countries cut off from international trade, because of being landlocked or at war or in bad economic relations with the neighboring countries.read more
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References
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Institutions, trade, and growth ☆
David Dollar,Aart Kraay +1 more
TL;DR: This paper investigated the partial effects of institutions and trade on growth and found that institutions with better institutions and countries that trade more tend to trade more, with a smaller role for improvements in institutions.
Journal ArticleDOI
Insecurity and the Pattern of Trade: An Empirical Investigation
TL;DR: In this article, a structural model of import demand in which insecurity acts as a hidden tax on trade is proposed, and the authors find that inadequate institutions constrain trade as much as tariffs do.
Book
Transition and Economics: Politics, Markets, and Firms
TL;DR: The transition from socialism to capitalism in former socialist economies is one of the main economic events of the twentieth century as discussed by the authors, and it is contributing to a shift in emphasis in economics from standard price and monetary theory to contracting and its institutional environment.
Journal ArticleDOI
Growth in Transition: What We Know, What We Don't and What We Should
Nauro F. Campos,Nauro F. Campos,Nauro F. Campos,Fabrizio Coricelli,Fabrizio Coricelli,Fabrizio Coricelli +5 more
TL;DR: The authors surveys macroeconomic issues that marked the transition from centrally planned to market economy in Central and Eastern European and former Soviet Union countries, and discusses various explanations for the initial output fall as well as medium term issues, such as optimal speed of transition, disorganization, institutions and sectoral reallocation as a source of output dynamics.
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Economic Transformation in Eastern Europe and the Distribution of Income
TL;DR: This paper examined the evidence about distribution of income under Communism in Eastern Europe and brought out the differences in experience between countries under Communism: between Central Europe and the former Union; between Czechoslovakia, Hungary and Poland; and between the newly independent states of the former Soviet Union.