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Business Climate in CIS Countries

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  • Vladimir Dubrovskiy
  • Oleg Ustenko

Abstract

The paper examines the quality of the business climate in the group of the Commonwealth of Independent States (CIS) from the prospective of the level of development of entrepreneurship, and individual countries’ attractiveness to the foreign direct investments (FDI). The analysis suggests that the main obstacles for further improvements of the business climate in this group of countries are high level of corruption, inefficiency in the existing system of tax administration and regulation, discretionary implementation of custom and trade regulations, low level of property rights protection, and macroeconomic instability. Some explanations of the historical and institutional causes of these business impediments are provided. Although the net FDI inflow to CIS countries has been substantially increased since the time they gained independence, it’s still well bellow than in Central & Eastern Europe Countries (CEE). The number of private enterprises per capita vastly varies within the CIS countries, with some of them approaching the OECD level, but some else lagging far behind. FDI stocks also unequally distribute within the CIS group. Fuel exporting countries are better off than fuel importing countries, although the individual country’s business climate within two groups does not differ significantly. As a conclusion, paper suggests a number of concrete public policy recommendations aiming to improve business climate in the CIS region.

Suggested Citation

  • Vladimir Dubrovskiy & Oleg Ustenko, 2005. "Business Climate in CIS Countries," CASE Network Studies and Analyses 0307, CASE-Center for Social and Economic Research.
  • Handle: RePEc:sec:cnstan:0307
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    References listed on IDEAS

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    1. Frye, Timothy & Shleifer, Andrei, 1997. "The Invisible Hand and the Grabbing Hand," American Economic Review, American Economic Association, vol. 87(2), pages 354-358, May.
    2. Mr. Clinton R. Shiells, 2003. "FDI and the Investment Climate in the CIS Countries," IMF Policy Discussion Papers 2003/005, International Monetary Fund.
    3. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    4. Marek Dabrowski & Malgorzata Jakubiak, 2003. "The Sources of Economic Growth in Ukraine after 1998 Currency Crisis and the Country's Prospects," CASE Network Reports 0055, CASE-Center for Social and Economic Research.
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    Cited by:

    1. Alexandru STRATAN & Elena ACULAI & Natalia VINOGRADOVA, 2015. "Assessment Of The Business Environment In The Republic Of Moldova: Key Trends And Determining Factors," ECONOMY AND SOCIOLOGY: Theoretical and Scientifical Journal, Socionet;Complexul Editorial "INCE", issue 1, pages 19-30.

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    Keywords

    CIS; business climate; FDI;
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