Employment Protection Legislation and Labor Markets in Transition: Assessing the Effects of the Labor Code in Armenia

The effects of employment protection legislation (EPL) on a country's labor market are clear in theory but empirical evidence is only starting to catch up. In particular, EPL is not robust as an indicator of overall unemployment, but previous panel data analyses have shown it affects the flow of workers into and out of employment. Examining monthly and quarterly data from Armenia, I find that the country's package of EPL has this same effect, and worker flows have slowed under the country's new Labor Code. The paradox of where Armenia's workforce is going still remains but can be hypothesized as entering the informal sector.employment protection legislation, labor markets, transition

Old wine and new bottles: A critical appraisal of the middle-income trap in BRICS countries

The idea of a middle-income trap is now over a decade old and continues to be applied to growth paths which have not been self-sustaining. With the bulk of emerging markets now approaching middle-income status, and given the reality of slower growth for many countries (and the policy recommendations that currently exist for overcoming this problem), is the middle-income trap still a relevant framework? Using reference to the BRICS countries, the key finding of this analysis is that the middle-income trap conceptualization is of little value-added, as fundamentals still matter, especially in relation to macroeconomic stability. Similarly, we note that “quality” institutions are necessary, both political and economic, including (smaller) size of government and property rights. The “trap” as currently formulated is thus nothing new or particularly relevant, as it repackages some familiar structural issues while avoiding other crucial ones

The institutional basis of efficiency in resource-rich countries

The “resource curse” is a familiar and recurring theme in development economics. But does resource abundance also lead to resource inefficiency? And if so, what can contribute to better usage of a country's resources for development? This paper examines 130 countries from 1970 to 2011, both resource-abundant and resource-scarce, and concludes that, on average, resource-abundant countries utilize resources less efficiently. Examining the institutional factors that may explain this disparity in usage, we find that several key institutions are necessary for increasing resource use efficiency, with private property showing the largest economic and statistical significance. By improving basic institutions, resource-rich countries can thus see more environmentally sustainable growth

Improving competitiveness in the member states of the Eurasian Economic Union: a blueprint for the next decade

The Eurasian Economic Union (EAEU) has made incredible strides in becoming an integrated body over the past 10 years, and is becoming part of a broader global process of economic regionalism that is shaping economic competitiveness. This paper applies a SWOT analysis to current and projected EAEU member states, and identifies where the difficulties and opportunities for the EAEU’s member countries will be in improving competitiveness in the coming years. The key conclusions are that the EAEU’s own institutional arrangements may foster competitiveness if it is able to remove some of the barriers to innovation that currently exist in the bloc’s member states

Identity and the Evolution of Institutions: Evidence from Partition and Interwar Poland

This paper advances a logical, if possibly controversial, thesis: institutional design is inherently a product of identity, at both the individual and group level. Building on recent advances in identity economics and new institutional economics, this research shows how identity can be used to explain institutional genesis and the persistence of “inefficient” institutions. Applying this model to Poland in the ninnettenth and early twentieth centuries, it is evident that the identity-based institutional building which had served individuals so well under occupation in Poland resulted in “inefficient” institutions, unsuited for the changing external environment. Only taking an identity lens to the Polish experience can we see a satisfactory explanation for the failure of institutions in interwar Poland

Baudrillard Goes to Kyiv: Institutional Simulacra in Transition.

The transition process in Central and Eastern Europe and the former Soviet Union from 1989 onward has been focused on the reform of institutions in order to re-orient the economy. However, throughout the former Soviet space, “transition” has been merely a label for many countries, covering the reality of a fundamental lack of change in either political or economic institutions. Using the idea of simulacra and simulation, first posited by philosopher Jean Baudrillard in 1981, I show how institutional change in transition for some prominent “transition economies” has proceeded through stages in simulation. In particular, using examples from Central Asia and Ukraine, I examine how crucial institutions have changed from a perversion of reality into symbols that are divorced from any reality. Current events in Ukraine show that institutional simulacra can exposed when an exogenous reality forces its way through

The "Hierarchy of Institutions" reconsidered: Monetary policy and its effect on the rule of law in interwar Poland

Traditional wisdom in economics holds that institutional change runs from political institutions to economic ones, with the distribution of political power affecting the creation of property rights and rule of law. This hierarchy of institutions has been observed in macroeconomic policy, where it has long been understood that there are political incentives for economic mismanagement, namely the creation of inflation. But are there longer-term effects of currency manipulation on the rule of law in a country? That is, does the hierarchy not always hold? This paper answers this question by focusing on a specific case of monetary instability, the newly-independent Second Polish Republic of 1918 to 1939. Using appropriate econometric techniques on a new database of historical data, I find that monetary profligacy correlates strongly with significantly lower levels of the rule of law. This result is robust to several tests and most specifications, including the use of a new variable for measuring access to the political system. The results suggest that monetary instability is a threat to political institutions in its own right, eroding the rule of law in addition to creating macroeconomic difficulties

Quantifying nontariff barriers in Ukraine: a comprehensive trade cost approach

Great strides have been made recently in the theoretical approach to quantifying nontariff barriers. Modifying an approach proposed by Novy (2013), this article attempts to understand the extent of nontariff barriers between Ukraine and its major trading partners in goods by fashioning a new approach to trade in services as well. I provide the first comprehensive estimates of ad valorem equivalents of the nontariff measures that exist in Ukraine