Financial policies in socialist countries in transition

One legacy of central planning, says the author, is that the financial systems in the transitional economies are even less developed than in many developing countries. He contends that the main goal of financial reform in these economies should be to make passive financial systems active - to make financial systems participate actively in the economy, as they do in market economies. For this to happen, the transitional economies must develop banking systems that allocate credit efficiently. Commercial banks must screen borrowers and monitor and discipline enterprises. The role of the government or the central bank should be limited to regulation and supervision. Most transitional economies have adopted a gradual approach to reforming their financial systems, maintaining the banking system's passive role. But banking reform in Eastern Europe cannot wait for enterprise restructuring and privatization, because both banks and state enterprises are burdened with inherited bad debts that endanger their solvency and hence that of the economy. The financial restructuring of banks and enterprises should be undertaken simultaneously, says the author, and should start early in the transition. Commercial banks should play an active role in the financial restructuring of enterprises. Governments must take responsibility (through the budget) for the debts of nonviable enterprises in a transparent manner and for the recapitalization of banks after their clean-up. Otherwise the healthy segments of the commercial sectors will have to carry the burden of financial restructuring, which will slow down the transition. Early in the transition, attention must also be paid to improving the system of payments, demonopolizing banking, changing the structure of ownership (including privatization), and introducing market-based financial legislation. The speed of financial reform will depend greatly on the availability of skilled banking professionals, on access to technical assistance from abroad, fiscal constraints, and of course on specific country circumstances. For example, for most countries of the former Soviet Union - except, for the Baltic states - a prerequisite to successful financial restructuring is macroeconomic stabilization and the reduction of high inflation rates. The most important lesson from countries further along in reform is that financial reform should not be delayed but should start as soon as possible. Delays reduce living standards (burdening the healthy parts of the economy with direct taxes or high financial costs), discourage small-scale entrepreneurs, inhibit the entry of new forms, and cause the economy to stagnate further.Financial Intermediation,Municipal Financial Management,Environmental Economics&Policies,Banks&Banking Reform,Financial Crisis Management&Restructuring

Creating partnerships for capacity building in developing countries - the experience of the World Bank

The authors discuss a variety of experiences in a number of transition, and developing countries to build institutional capacity for economics education. A flexible approach met with some success. The approach uses partnerships that combine the often different needs of a number of private donors, with the World Bank on the supply side. Much of the success was due to adopting each effort to the individual country situation. The authors also provide a brief summary of five academic institutions, and four research networks in Europe, Africa, Asia, and Latin America.Public Health Promotion,Health Monitoring&Evaluation,Agricultural Knowledge&Information Systems,Decentralization,ICT Policy and Strategies,ICT Policy and Strategies,Health Monitoring&Evaluation,Agricultural Knowledge&Information Systems,Tertiary Education,Scientific Research&Science Parks

A methodology of fiscal incidence using a Social Accounting Matrix framework and the Harberger model

Thesis (Ph.D.)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, 1983.MICROFICHE COPY AVAILABLE IN ARCHIVES AND ROTCHIncludes bibliographies.by Boris Pleskovic.Ph.D

Capacity building in economics : education and research in transition economies

The development of the institutional capacity to create and evaluate economic policies remains a critical need-and constraint-in most transition economies if they are to complete the successful passage to fully functioning market economies. To take an active role in the transition process, economic policymakers, business leaders, government officials, and others need a thorough grounding in market-based economics. This requires strengthening economics education and providing support for qualified economists to teach economics at all levels and to carry out high-quality research and policy analysis. Although the education systems in a handful of countries have already risen to the challenge, in many other transition countries, the structure of educational and research institutes remains grounded in the Communist model. This paper presents findings from a comprehensive study assessing the state of economics education and research in 24 countries in East-Central Europe and the former Soviet Union. While 20 countries were initially included because preliminary assessments showed that they lacked the capability to offer high-quality economics education, four additional countries-the Czech Republic, Hungary, Russia, and Ukraine-were included to highlight five centers of excellence that they already host. Based on the experience of these successful centers, the study's findings, and information gathered from a series of donor meetings in Berlin, New York, and Washington, D.C., this paper presents an approach to building new indigenous capacity for teaching and research on market-based economics in regions where the need is particularly critical-the Caucasus, Central Asia, and Southeast Europe.Curriculum&Instruction,Decentralization,Agricultural Knowledge&Information Systems,Teaching and Learning,Public Health Promotion,Tertiary Education,Health Monitoring&Evaluation,Agricultural Knowledge&Information Systems,Teaching and Learning,Curriculum&Instruction

Inside Post-Socialist Courts: The Determinants of Adjudicatory Outcomes in Slovenian Commercial Disputes

Despite the judiciary's central role in the capitalist market system, micro-level empirical analyses of courts in post-socialist countries are remarkably rare. This paper draws on a unique hand-collected dataset of commercial claims filed at Slovenian courts to examine the determinants of two salient adjudicatory outcomes: whether a case was resolved via trial or settlement and if the case was tried, whether the plaintiff was awarded the initial claim. Consistent with the divergent expectations theory of litigation, we find that trial-based resolution is more likely when the case is complex and less likely when parties use mediation. Addressing sample selection and endogeneity concerns, we show that defendant's legal representation, plaintiff's profitability, and, importantly, court identity are robust predictors of plaintiff victory at trial. Thus, more than two decades after the start of transition in Slovenia, the judicial system is still a source of legal inconsistency and uncertainty