EBRD Transition Report 2013: Stuck in Transition?
Speaker: Jeromin Zettelmeyer, Deputy Chief Economist and Director of Research at the European Bank for Reconstruction and Development
Reforms in most transition countries have stalled since the mid-2000. Long-term growth projections suggest that unless reforms are revived, living standards in most transition countries will remain below those in mature market economies, or at best converge very slowly. There is no shortage of advice on which reforms transition countries should undertake. The real question is why countries will not necessarily embrace it. What can be done to promote not just growth, but reforms that may lead to growth?
The 2013 Transition Report answers this question by examining the political, institutional and human capital constraints to effective reform. It shows that democracy has been an important enabler of reform. It investigates the drivers of democracy in the transition region, and asks if anything can be done to improve economic institutions even in less democratic political systems. It also explores why in some cases – but not in others – improvements in the political system trigger disproportionate improvements in economic institutions. It undertakes a comprehensive assessment of the quality of human capital in the transition region. Finally, it contains the first-ever attempt to assess the inclusiveness of economic institutions – the extent to which societies provide economic opportunities to its members regardless of circumstances at birth – and compare them with Western European benchmarks.