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Institutional effects on economic performance in post-socialist transition: A dynamic panel analysis

Author

Listed:
  • Adnan Efendic

    (University of Sarajevo, School of Economics and Business)

  • Geoff Pugh

    (Centre for Applied Business Research, Faculty of Business , Education and Law, Staffordshire University, United Kingdom)

Abstract

This article uses dynamic panel analysis to investigate the relationship between institutional improvement and economic performance in 29 transition countries. The contribution of this paper is two-fold. First, we find that per capita GDP is determined by the entire history of institutional reform under transition and that, conditional on this history, per capita GDP adjusts to recent institutional changes. Moreover, we find that the time-horizon over which we measure institutional change matters, with five-year changes showing the clearest effects on current levels of per capita GDP. Secondly, we address the pronounced methodological heterogeneity of this literature. To compensate for incomplete theoretical guidance from the institutional literature, we draw upon an institutional meta-regression analysis to inform our model specification. Our analysis covers the period 1992–2007.

Suggested Citation

  • Adnan Efendic & Geoff Pugh, 2015. "Institutional effects on economic performance in post-socialist transition: A dynamic panel analysis," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 65(4), pages 503-523, December.
    • Handle: RePEc:aka:aoecon:v:65:y:2015:i:4:p:503-523
    Note: The authors acknowledge a particular debt to Nick Adnett. We also thank the two anonymous referees for additional improvements. Any shortcomings remaining are the responsibility of the authors.
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    Citations

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    Cited by:

    1. Adnan Efendic, 2016. "Emigration intentions in a post-conflict environment: evidence from Bosnia and Herzegovina," Post-Communist Economies, Taylor & Francis Journals, vol. 28(3), pages 335-352, July.
    2. Hillary Chijindu Ezeaku & Ifeoma C. Nwakoby & Obiamaka P. Egbo & Josaphat U. J. Onwumere, 2019. "On the Dynamic Effect of Bilateral Concessional Debts on Living Standards in Sub-Saharan Africa," SAGE Open, , vol. 9(3), pages 21582440198, September.
    3. Siljak Dzenita, 2018. "Beta Convergence among Former Socialist Countries," South East European Journal of Economics and Business, Sciendo, vol. 13(2), pages 72-83, December.
    4. Kovač Rijad & Verbič Miroslav, 2023. "Wealth Inequality and Institutional Development: Macroeconometric Evidence from a Global Sample," South East European Journal of Economics and Business, Sciendo, vol. 18(1), pages 100-114, June.
    5. Kryeziu Liridon & Coşkun Recai, 2018. "Political and Economic Institutions and Economic Performance: Evidence from Kosovo," South East European Journal of Economics and Business, Sciendo, vol. 13(2), pages 84-99, December.
    6. Aleksandar B. Todorov, 2023. "Rule of Law and Large Firms Concentration in Southeast Europe," Bulgarian Economic Papers bep-2023-06, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski, revised Oct 2023.
    7. Efendic Nirha & Pasovic Edin & Efendic Adnan S., 2018. "Understanding the Informal Economy in Practice – Evidence from Bosnia and Herzegovina," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 14(4), pages 77-89, December.
    8. Nick Williams & Adnan Efendic, 2019. "Internal displacement and external migration in a post-conflict economy: Perceptions of institutions among migrant entrepreneurs," Journal of International Entrepreneurship, Springer, vol. 17(4), pages 558-585, December.
    9. Sarela Enriquez-Perales & Conrado Diego García-Gómez & José María Díez-Esteban & Edmundo R. Lizarzaburu Bolaños, 2023. "Formal institutions, ICSID arbitration and firm performance: evidence from Latin America," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(2), pages 429-464, June.
    10. Ziberi Besime & Alili Merita Zulfiu, 2021. "Economic Growth in the Western Balkans: A Panel Analysis," South East European Journal of Economics and Business, Sciendo, vol. 16(2), pages 68-81, December.
    11. Pasovic Edin & Efendic Adnan S., 2018. "Informal Economy in Bosnia and Herzegovina – An Empirical Investigation," South East European Journal of Economics and Business, Sciendo, vol. 13(2), pages 112-125, December.
    12. Aralica Zoran & Svilokos Tonci & Bacic Katarina, 2018. "Institutions and Firms’ Performance in Transition Countries: The Case of Selected Cesee Countries," South East European Journal of Economics and Business, Sciendo, vol. 13(1), pages 68-80, June.
    13. Gazmend Amaxhekaj & Driton Qehaja & Atdhetar Gara, 2024. "The Role of Institutions in Energy Transition and Economic Growth in West Balkan Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 18-45.

    More about this item

    Keywords

    institutions; economic performance; transition countries; dynamic panel analysis; extreme bounds analysis;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General
    • P39 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Other

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