The Eurasian Growth Paradox

Anders Aslund () and Nazgul Jenish
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Nazgul Jenish: University of Maryland

No WP06-5, Working Paper Series from Peterson Institute for International Economics

Abstract: In the first decade of postcommunist transition, multiple growth regressions showed that the more radical and comprehensive market economic reform was, the earlier a country returned to economic growth and the more vigorous its growth, and that Central Europe took the lead. Since 2000, however, the Commonweath of Independent States (CIS) countries have had more than 4 percentage points higher annual growth than the Central European countries. A regression analysis for 20 postcommunist countries shows, with strong significance, that reducing public expenditures has most effectively stimulated economic growth. As expected, oil exports are also positive and significant. The distance from the European Union is also positive and significant: that is, the further from the European Union, the higher the economic growth. The effect of corruption is negative for growth but only marginally significant. Neither the laggard effect nor investment reveals any significant effect. The conclusion is that at least among postcommunist countries more emphasis should be given to reducing public expenditures to boost economic growth.

Keywords: economic systems; transition; economic growth; public sector economy; oil (search for similar items in EconPapers)
JEL-codes: E62 H30 O23 P27 P35 Q43 (search for similar items in EconPapers)
Date: 2006-06
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-tra
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Citations: View citations in EconPapers (11)

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