Table Of ContentTransition and Beyond
Essays in Honor of Mario Nuti
Edited by
Saul Estrin, Grzegorz W. Kolodko and
Milica Uvalic
StudiesinEconomicTransition
GeneralEditors:JensHölscher,ReaderinEconomics,UniversityofBrighton;andHorst
Tomann,ProfessorofEconomics,FreeUniversityBerlin
Thisserieshasbeenestablishedinresponsetoagrowingdemandforagreaterunder-
standing of the transformation of economic systems. It brings together theoretical
andempiricalstudiesoneconomictransitionandeconomicdevelopment.Thepost-
communist transition from planned to market economies is one of the main areas
of applied theory because in this field the most dramatic examples of change and
economicdynamicscanbefound.Theseriesaimstocontributetotheunderstanding
of specific major economic changes as well as to advance the theory of economic
development.Theimplicationsofeconomicpolicywillbeamajorpointoffocus.
Titlesinclude:
LucianCernat
EUROPEANIZATION,VARIETIESOFCAPITALISMANDECONOMICPERFORMANCE
INCENTRALANDEASTERNEUROPE
IrwinCollier,HerwigRoggemann,OliverScholzandHorstTomann(editors)
WELFARESTATESINTRANSITION
EastandWest
BrunoDallagoandIchiroIwasaki(editors)
CORPORATERESTRUCTURINGANDGOVERNANCEINTRANSITIONECONOMIES
BrunoDallago(editor)
TRANSFORMATIONANDEUROPEANINTEGRATION
TheLocalDimension
HellaEngerer
PRIVATIZATIONANDITSLIMITSINCENTRALANDEASTERNEUROPE
PropertyRightsinTransition
SaulEstrin,GrzegorzW.KolodkoandMilicaUvalic(editors)
TRANSITIONANDBEYOND
HubertGabrischandRüdigerPohl(editors)
EUENLARGEMENTANDITSMACROECONOMICEFFECTSINEASTERNEUROPE
Currencies,Prices,InvestmentandCompetitiveness
OlehHavrylyshyn
DIVERGENTPATHSINPOST-COMMUNISTTRANSFORMATION
CapitalismforAllorCapitalismfortheFew?
JensHölscher(editor)
FINANCIALTURBULENCEANDCAPITALMARKETSINTRANSITIONCOUNTRIES
JensHölscherandAnjaHochberg(editors)
EASTGERMANY’SECONOMICDEVELOPMENTSINCEUNIFICATION
DomesticandGlobalAspects
MihaelaKelemenandMonikaKostera(editors)
CRITICALMANAGEMENTRESEARCHINEASTERNEUROPE
ManagingtheTransition
EmilJ.Kirchner(editor)
DECENTRALIZATIONANDTRANSITIONINTHEVISEGRAD
Poland,Hungary,theCzechRepublicandSlovakia
DavidLaneandMartinMyant(editors)
VARIETIESOFCAPITALISMINPOST-COMMUNISTCOUNTRIES
TomaszMickiewicz(editor)
CORPORATEGOVERNANCEANDFINANCEINPOLANDANDRUSSIA
TomaszMickiewicz
ECONOMIC TRANSITION IN CENTRAL EUROPE AND THE COMMONWEALTH OF
INDEPENDENTSTATES
MilanNikolic
MONETARYPOLICYINTRANSITION
InflationNexusMoneySupplyinPostcommunistRussia
JuliePellegrin
THEPOLITICALECONOMYOFCOMPETITIVENESSANDENLARGEDEUROPE
StanislavPoloucek(editor)
REFORMINGTHEFINANCIALSECTORINCENTRALEUROPEANCOUNTRIES
GreggS.Robins
BANKINGINTRANSITION
EastGermanyafterUnification
JohannesStephan
ECONOMICTRANSITIONINHUNGARYANDEASTGERMANY
GradualismandShockTherapyinCatch-upDevelopment
JohannesStephan(editor)
TECHNOLOGY TRANSFER VIA FOREIGN DIRECT INVESTMENT IN CENTRAL AND
EASTERNEUROPE
HansvanZon
THEPOLITICALECONOMYOFINDEPENDENTUKRAINE
AdalbertWinkler(editor)
BANKINGANDMONETARYPOLICYINEASTERNEUROPE
TheFirstTenYears
StudiesinEconomicTransition
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Transition and Beyond
Essays in Honor of Mario Nuti
Editedby
Saul Estrin
LondonSchoolofEconomics,UK
Grzegorz W. Kolodko
KozminskiBusinessSchool,TIGER,Warsaw,Poland
Milica Uvalic
UniversityofPerugia,Italy
Selectionandeditorialmatter©SaulEstrin,GrzegorzW.Kolodko
andMilicaUvalic2007
Individualchapters©Contributors2007
Softcover reprint of the hardcover 1st edition 2007 978-0-230-54697-4
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Transitionandbeyond:essaysinhonourofMarioNuti/editedbySaulEstrin,
GrzegorzW.Kolodko,MilicaUvalic.
p. cm.“(Studiesineconomictransition)
Includesbibliographicalreferencesandindex.
1. Europe,Eastern“Economicpolicy“1989(cid:3) 2. Europe,Eastern“
Economicconditions“1989(cid:3) 3. Post-communism“Europe,Eastern.
4. Privatization“Europe,Eastern. 5. Capitalism“Europe,Eastern.
I. Estrin,Saul. II.Kolodko,GrzegorzW. III. Uvalic,Milica.
HC244.T6986352007
330.947“dc22 2007022297
10 9 8 7 6 5 4 3 2 1
16 15 14 13 12 11 10 09 08 07
Dedicated to D. Mario Nuti
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Contents
ListofTables ix
ListofFigures xi
Acknowledgments xii
NotesontheContributors xiii
Introduction 1
Saul Estrin, Grzegorz W. Kolodko, and Milica Uvalic
PartI TheSocialistLegacy
1 TheRiseandFallofSocialistPlanning 17
Michael Ellman
2 Life Cycle of the Centrally Planned Economy: Why Soviet
GrowthRatesPeakedinthe1950s 35
Vladimir Popov
3 AreTransitionEconomiesNormalDevelopingCountries?The
BurdenoftheSocialistPast 58
Michael Keren and Gur Ofer
PartII Transition:FromSocialismtoCapitalism
4 Growth,InitialConditions,LawandSpeedofPrivatizationin
TransitionCountries:11YearsLater 89
Sergio Godoy and Joseph E. Stiglitz
5 SkillsandtheTransition 118
Simon Commander
6 FinancialTransitioninCentralandEasternEurope.ANote 133
Marcello de Cecco
7 Investment, Wages and Corporate Governance during the
Transition:EvidencefromSlovenianFirms 149
Janez Prašnikar and Jan Svejnar
8 HowDifferentIsSerbia? 174
Milica Uvalic
vii
viii Contents
9 TheSearchforIdentity:WhereIsRussiaHeading? 191
Padma Desai
10 TheEffectsofPrivatizationonCompanyPerformanceinBelarus 214
Saul Estrin, Marina Bakanova, Igor Pelipas, and Sergei Pukovich
PartIII BeyondTransition
11 ComplexityandSystemicFailure 229
Vito Tanzi
12 RiskManagementandSystemicRisk 247
John Eatwell
13 OptimalTransitionTrajectories? 263
László Csaba
14 TheGreatPost-CommunistChangeandUncertainFutureof
theWorld 278
Grzegorz W. Kolodko
Index 298
List of Tables
2.1 GrowthintheUSSRandAsianeconomies,Westerndata,
1928–87(averageannualpercent) 37
2.2 AgecharacteristicsofequipmentinSovietindustry 40
2A1 Marketeconomyafterthe‘bigpush’(withinvestment
to replace retirement equal to actual physical
retirement of capital stock plus another 10% of gross
investment),% 50
2A2 CPE after the ‘big push’ (with investment to replace
retirementequalto5%ofgrossinvestment),% 53
3.1 Governmenteffectiveness–1996 66
3.2 Governmenteffectiveness–2004 67
3.3 Governmenteffectiveness–2004andHDI–2003 68
3.4 Controlofcorruption–1996 70
3.5 Controlofcorruption–2004and‘governmenteffectiveness’ 70
3.6 Corruptionperceptionindex–2005 71
3.7 TheestimatesoftheFSUandnewEUdummyvariables 72
3.8 Growthand‘governmenteffectiveness’ 73
3.9 Russia:governanceindicatorsandresiduals 76
3.10 Russia:thesixgovernanceindicators,1996and2004 76
4.1 Datadescription 97
4.2 Principalcomponentanalysis 99
4.3 OLSregressions(Dependentvariableisthe1990–2001GDP
growthrate) 100
4.4 TSLSregressions(Dependentvariableisthe1990–2001GDP
growthrate) 102
4A1 Regressionsdata 106
4A2 Institutionalinitialconditions 107
4A3 Instruments 108
4B1 THSLSregressions 108
5.1 Directmeasuresofskillsinrecentsurveysofliteracyand
relatedproficiencies 120
5.2 Employmentratiosofthepopulationaged25–62bylevelof
educationalattainmentin1998 121
5.3 Changesinskillshares,1999–2002 124
ix
