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Identifying Structural Reform Gaps in Emerging Europe, the Caucasus, and Central Asia

Author

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  • Mr. Norbert Funke
  • Asel Isakova
  • Maksym Ivanyna

Abstract

Using data from the World Economic Forum’s Global Competitiveness Report as an example, this paper compares structural indicators for 25 countries in Emerging Europe, the Caucasus, and Central Asia with a generic country with similar charactersitics that is 40 percent richer as well as a country with the average EU income. This comparison suggests that improvements will be particularly crucial in the areas of institutions, financial market development, infrastructure, goods and labor market efficiency and areas related to innovation. For the generally more ambitious goal of reaching average EU income, the reform needs are correspondingly larger. The methodology focuses on (approximate) comparisons between countries and does not try to establish the link between structural reforms and growth. While we test for changes in empirical specifications, caveats relate to the quality of structural indicators, possible non-linearities, and reform complementarities. The approach can be applied to other indicators and at a more granular level.

Suggested Citation

  • Mr. Norbert Funke & Asel Isakova & Maksym Ivanyna, 2017. "Identifying Structural Reform Gaps in Emerging Europe, the Caucasus, and Central Asia," IMF Working Papers 2017/082, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2017/082
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    References listed on IDEAS

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    Cited by:

    1. Kuznetsov, Aleksei & Berdigulova, Aigul, 2018. "EDB Macroreview, December 2018. Macroeconomic Stability Tested," Working Papers 2018-4, Eurasian Development Bank, Chief Economist Group.
    2. World Bank, "undated". "Europe and Central Asia Economic Update, Spring 2020," World Bank Publications - Reports 33476, The World Bank Group.

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