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The Eurasian Growth Paradox

Author

Listed:
  • Anders Åslund

    (Peterson Institute for International Economics)

  • Nazgul Jenish

    (University of Maryland)

Abstract

In the first decade of postcommunist transition, multiple growth regressions showed that the more radical and comprehensive market economic reform was, the earlier a country returned to economic growth and the more vigorous its growth, and that Central Europe took the lead. Since 2000, however, the Commonweath of Independent States (CIS) countries have had more than 4 percentage points higher annual growth than the Central European countries. A regression analysis for 20 postcommunist countries shows, with strong significance, that reducing public expenditures has most effectively stimulated economic growth. As expected, oil exports are also positive and significant. The distance from the European Union is also positive and significant: that is, the further from the European Union, the higher the economic growth. The effect of corruption is negative for growth but only marginally significant. Neither the laggard effect nor investment reveals any significant effect. The conclusion is that at least among postcommunist countries more emphasis should be given to reducing public expenditures to boost economic growth.

Suggested Citation

  • Anders Åslund & Nazgul Jenish, 2006. "The Eurasian Growth Paradox," Working Paper Series WP06-5, Peterson Institute for International Economics.
    • Handle: RePEc:iie:wpaper:wp06-5
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    File URL: https://www.piie.com/publications/working-papers/eurasian-growth-paradox
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    Citations

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    Cited by:

    1. Halkos, George & Paizanos, Epameinondas, 2015. "Fiscal policy and economic performance: A review of the theoretical and empirical literature," MPRA Paper 67737, University Library of Munich, Germany.
    2. Julija MICHAILOVA, 2009. "Gender, Corruption And Sustainable Growth In Transition Countries," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(3(9)_Fall).
    3. Ekaterina Zhuravskaya, 2007. "Whither Russia? A Review of Andrei Shleifer's A Normal Country," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 127-146, March.
    4. Ella Hugo & David A. Savage & Benno Torgler, 2021. "“Grease” or “Sand” the Wheels of Economic Development: A Meta-Analysis of Corruption," CREMA Working Paper Series 2021-19, Center for Research in Economics, Management and the Arts (CREMA).
    5. Zsolt Darvas, 2011. "Beyond the Crisis: Prospects for Emerging Europe," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 53(2), pages 261-290, June.
    6. Julie Chytilová & Michal Mejstøík, 2007. "European Social Models and Growth: Where are the Eastern European countries heading?," Working Papers IES 2007/24, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2007.
    7. Maryia Akulava, 2015. "Gender and Innovativeness of the Enterprise: the Case of Transition Countries," BEROC Working Paper Series 31, Belarusian Economic Research and Outreach Center (BEROC).
    8. István P. Székely & Max Watson, 2009. "Growth and Economic Policy: Are There Speed Limits to Real Convergence?," Palgrave Macmillan Books, in: Reiner Martin & Adalbert Winkler (ed.), Real Convergence in Central, Eastern and South-Eastern Europe, chapter 5, pages 98-123, Palgrave Macmillan.
    9. Giovanni Andrea Cornia, 2010. "Transition, Structural Divergence, and Performance: Eastern Europe and the former Soviet Union over 2000-2007," WIDER Working Paper Series wp-2010-032, World Institute for Development Economic Research (UNU-WIDER).
    10. Cornia, Giovanni Andrea, 2010. "Transition, Structural Divergence,and Performance: Eastern Europe and the former Soviet Union over 2000-2007," WIDER Working Paper Series 032, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    economic systems; transition; economic growth; public sector economy; oil;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • P35 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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