Abstract
Process of transition is most simply defined as a process which includes moving from centrally planned to market oriented economy. There is no uniqueness about which countries are transitional ones, as their geographical, cultural, economic and overall social context disables forming of one unique sample that would fit in every analysis. The main aspects of transition process are liberalization, macroeconomic stabilization, privatization and legal and institutional reforms. Our definition of institutions assumes Douglass North’s concept of institutions which defines institutions as the rules or regulations (humanly devised constraints) that structure political, economic and social interaction while institutional environment comprises institutions (formal and informal ones) and an enforcement mechanism. The quality of institutions in this chapter is measured by World Governance Indicators. The subject of this chapter is the analysis of quality of institutions and institutional environment in five Western Balkan countries and analysis of implications of institutional environment on overall standard of living and competitiveness of these countries. Our results indicate that Western Balkan countries lag significantly behind Central European countries in terms of institutional quality. The widening gap between the standard of living in Western Balkan countries and Central European countries in last 10 years indicates that the crucial problem in Western Balkan countries is the speed of reforms.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Even if analyzed by many authors as an example of unique transitional country, progress in transition is not assessed in China by Transition Reports, as it would require individual analysis due to its size and special path of reforms.
- 2.
Douglas North, the Nobel laureate who defined institutions and institutional change, referred to the role of institutions and their importance for transition economies in his annual lecture for UNU/WIDER (North, 1997).
- 3.
PPP stands for Purchasing Power Parity.
- 4.
- 5.
- 6.
References
Acemoglu, D., Johnson, S., & Robinson, J. (2004). Institutions as the fundamentals cause of long-run growth (NBER Working Paper 10481). Cambridge.
Acemoglu, D., & Robinson, J. (2010). The role of institutions in growth and development. Review of Economics and Institutions, 1(2). doi:10.5202/rei.v1i2.1, ISSN:2038-1379.
Beck, T., & Laeven, L. (2005). Institution building and growth in transition economies (World Bank Policy Research Working Paper 3657).
Bevan, A., & Estrin, S. (2004). The determinants of foreign direct investment into European transition economies. Journal of Comparative Economics, 32, 775–787.
Campos, N. (2000). Context is everything: Measuring institutional change in transition economies (Policy Research Working Paper 2269). World Bank.
Dana, L. P., & Dana, T. (2003). Management and enterprise development in post-communist economies. International Journal of Management and Enterprise Development, 1(I), 45–54.
Dollar, D., & Kraay, A. (2003). Institutions, trade, and growth (Policy Research Working Paper). The World Bank Development Research Group.
EBRD. (2013). Transition report 2013, stuck in transition. London: European Bank for Reconstruction and Development.
Efendic, A., Pugh, G., & Adnett, N. (2010). Institutions and economic performance: System GMM modelling of institutional effects in transition. On-line publication: AAB-RIINVEST University in Pristina, Kosovo. Available at: http://www.riinvestinstitute.org/pdf/Efendic_et_al.pdf
Eicher, T., & Leukert, A. (2009). Institutions and economic performance: Endogeneity and parameter heterogeneity. Journal of Money, Credit and Banking, 41(1), 197–219. doi:10.1111/j.1538-4616.2008.00193.x.
Estrin, S., Hanousek, J., Kocenda, E., & Svejnar, J. (2009). Effects of privatization and ownership in transition economies (Working Paper 4881). The World Bank Development Economics Department.
Fischer, S., & Gelb, A. (1991). The process of socialist economic transformation. Journal of Economic Perspectives, 5(4), 91–105.
Fischer, S., & Sahay, R. (2004). Transition economies: The role of institutions and initial conditions. IMF. Preliminary Draft.
Hall, R., & Jones, C. (1998). Why do some countries produce so much more output per worker than others (NBER Working Paper 6564). Cambridge.
Havrylyshyn, O., & Wolf, T. (1999). Determinants of growth in transition countries. IMF Finance and Development, 36(2), 12–15.
International Monetary Fund. (2000). Transition economies: An IMF perspective on progress and prospects (Issue Briefs 00/08).
Kaufman, D., Kraay, A., & Mastruzzi, M. (2010). The worldwide governance indicators methodology and analytical issues (Policy Research Working Papers 5430). World Bank.
Knack, S., & Keefer, P. (1995). Institutions and economic performance: Cross country test using alternative institutional measures. Economics and Politics, 7(3), 208–227.
Kolodko, G. W. (1999). Transition to a market economy and sustained growth. Implications for the post-Washington consensus. Communist and Post-Communist Studies, 32, 233–261.
Kornai, J. (1999). Reforming the welfare state in postsocialist economies. In A. Brown (Ed.), When is transition over? (pp. 99–114). Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
La Porta, R., de Silanes, F. L., Schleifer, A., & Vishny, R. (1998). The quality of government (NBER Working Paper 6727). Cambridge.
Lavigne, M. (1999). What is still missing? In A. Brown (Ed.), When is transition over? (pp. 13–38). Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
Murrell, P. (1996). How far has the transition progressed? Journal of Economic Perspectives, 10, 25–44.
Murrell, P. (2003). Institutions and firms in transition economies. Draft prepared as a chapter of the Handbook of new institutional economics.
North, D. (1990). Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.
North, D. (1997, March). The contribution of the new institutional economics to an understanding of the transition problem. In 1st Annual lecture UNU WIDER.
Petković, S., & Berberović, S. (2013). Ekonomika i upravljanje malim i srednjim preduzećima. Banja Luka: Ekonomski fakultet.
Popov, V. (2007). Shock therapy versus gradualism reconsidered: Lessons from transition economies after 15 years of reforms. Comparative Economic Studies, 49, 1–31.
Ramadani, V., & Dana, L. P. (2013). The state of entrepreneurship in the Balkans: Evidence from selected countries. In V. Ramadani & R. C. Schneider (Eds.), Entrepreneurship in the Balkans. Berlin: Springer.
Rodrik, D., Subramanian, A., & Trebbi, F. (2002). Institutions rule: The primacy of institutions over geography and integration in economic development (NBER Working Paper 9305). Cambridge.
Roland, G. (2000). Transition and economics: Politics, markets, and firms. Cambridge, MA: MIT Press.
Roland, G. (2002). The political economy of transition. Journal of Economic Perspectives, 16(1), 29–50.
Roland, G., & Verdier, T. (1999). Law enforcement and transition (Working Paper No. 262). William Davidson Institute.
Sachs, J. (2012, March) What I did in Russia, Personal website. http://jeffsachs.org/2012/03/what-i-did-in-russia/
Stiglitz, J. (1999). Whiter reform, ten years of the transition. Key note address. In World Bank annual conference on development economics.
Streeten, P. (1996). Governance. In M. G. Quibria & J. M. Dowling (Eds.), Current issues in economic development. An Asian perspective (pp. 27–66). Oxford: Oxford University Press.
Svejnar, J. (2002). Transition economies: Performance and challenges. The Journal of Economic Perspectives, 16(1), 3–28.
Tešić, J. (2010). Institutional environment and foreign direct investment in the Western Balkans. In S. Milford & I. Tarosy (Eds.), The Western Balkans—Lessons from the past and future prospects: A view from the Danube Region. Institute for the Danube Region and Central Europe and IDResearch Ltd.
Tomaš, R. (2013). Causes of slow and inefficient transition of economy of Bosnia and Herzegovina and possibilities for its improvement. Poslovna izvrsnost, god. VII, br. I. Ekonomski fakultet Zagreb, pp. 99–119.
World Bank. (1994). Governance. The World Bank’s experience. Washington, DC.
World Bank. (1998). Beyond the Washington consensus: Institutions matter. Washington, DC.
World Bank. (2002). Transition the first ten years analysis and lessons for Eastern Europe and the former Soviet Union. Washington, DC.
Žarković, V. (2012). Privatizacija u Centralnoj i Istocnoj Evropi. Banja Luka: Ekonomski fakultet.
The Global Competitiveness Index Data Platform. http://www.weforum.org/issues/competitiveness-0/gci2012-data-platform/
World Governance Indicators Database, February 2014. Official web page http://info.worldbank.org/governance/wgi/index.aspx#home
World Economic Outlook Database, International Monetary Fund. http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx
Keefer, P., & Knack, S. (2005). Social capital, social norms and the new institutional economics. In C. Ménard & M. Shirley (Eds.), The handbook of the new institutional economics (pp. 701–726). Dordecht, The Netherlands: Springer.
Kołodko, G. W. (2002). Globalization and catching-up in transition economies. Rochester: University of Rochester Press.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Appendices
Appendices
Rights and permissions
Copyright information
© 2015 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Trivić, J., Petković, S. (2015). Different Features of Transition Economies: Institutions Matter. In: Dana, LP., Ramadani, V. (eds) Family Businesses in Transition Economies. Springer, Cham. https://doi.org/10.1007/978-3-319-14209-8_4
Download citation
DOI: https://doi.org/10.1007/978-3-319-14209-8_4
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-14208-1
Online ISBN: 978-3-319-14209-8
eBook Packages: Business and EconomicsBusiness and Management (R0)