Commitment devices, opportunity windows, and institution building in Central Asia

Christian Danne

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies the institutional reform process in Central Asia from a choice perspective. We compare institutional reform processes of Central Asian countries from 1995 to 2006 to those conducted in their neighbouring countries in Central and (South) Eastern Europe, Russia, and the Middle East. Firstly, the paper identifies contemporaneous factors responsible for the persistence of poor institutional arrangements. Secondly, we identify factors that can act as commitment devices through which institutional change can be achieved and sustained. Based on the findings, it is argued that deficiencies in the education system and preferences of individuals and politicians are responsible for the persistence of poor institutional arrangements. External factors such as real and financial openness, fixed exchange rates and non-trade related international agreements, however, provide strong commitment devices for policy makers to improve institutional arrangements in Central Asia despite poor initial conditions. Moreover, large external shocks may help to shift preferences towards more reliable institutional settings.

Keywords: Economic Institutions; Reforms; Central Asia (search for similar items in EconPapers)
JEL-codes: H11 O10 P20 (search for similar items in EconPapers)
Date: 2009-08
New Economics Papers: this item is included in nep-cwa and nep-tra
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Related works:
Working Paper: Commitment devices, opportunity windows, and institution building in Central Asia (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:16597

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