Post-Communist Transition as a Path Break: Comparing Legal Institutional Effects on Economic Growth between Path-Breaking and Path-Drifting Institutional Reforms

Larysa Tamilina and Natalya Tamilina

MPRA Paper from University Library of Munich, Germany

Abstract: This article explains the peculiarities of institutional effects on growth rates in post-communist countries. By proposing a certain dependence of the institution-growth nexus on the mode of institutional grafting, the distinction between drift-phase and path-breaking institutional change is introduced. Theoretical juxtapositions show that transition countries’ institutions built through path-breaking institutional reforms differ from those that emerge evolutionarily in the drift phase in a twofold manner in their relationship to growth. Growth rates of their economies are less likely to depend on the quality of legal institutions and are more likely to be a function of the maturity of political institutions. In addition, legal institutional change in the post-communist world is a product of the quality of the political environment to a greater extent than their drift-phase alternatives. These propositions are tested empirically based on a sample of 87 countries derived from the POLITY IV Project's website.

Keywords: Institutional Economics; Formal Institutions; Institutional Change; Post-Communist Transition (search for similar items in EconPapers)
JEL-codes: O11 O17 P51 (search for similar items in EconPapers)
Date: 2016-01-01
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