Tiny, Poor, Landlocked, Indebted, but Growing: Lessons for Late Reforming Transition Economies from Laos

Kelly Bird and Hal Hill

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: There are few countries where ‘initial conditions’ are as unfavourable as those of Laos. It is a very poor, least developed country. It is landlocked, sharing its international borders with five neighbours. It has the world’s highest per capita stock of unexploded ordinance, a legacy of the Indo China war. It has yet to recover from the loss of most of its entrepreneurial class and over half of its tertiary educated population in the aftermath of that war. It is heavily indebted, with substantial Soviet era obligations still outstanding. Its institutions are weak and property rights ill defined. Yet, its reform efforts over the past two decades have been largely successful, with accelerating growth and the beginnings of a relatively smooth transition from plan to market. Our examination of the Lao reform program and the subsequent outcomes suggests that, contrary to some of the prevailing pessimism, late-comers can engage with the international economy, providing their reforms are reasonably effective and credible. Neighbourhood effects have obviously been supportive in the Lao case, but their importance should not be over-stated.

Keywords: Laos; latecomers; economic reform; plan to market; transition economies; landlocked states (search for similar items in EconPapers)
JEL-codes: O53 P30 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2010
New Economics Papers: this item is included in nep-dev and nep-tra
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Journal Article: Tiny, Poor, Land-locked, Indebted, but Growing: Lessons for Late Reforming Transition Economies from Laos (2010)
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