The
Department
of Economics
Economics 570 Professor
Barry W. Ickes
Development Fall
2008
This is the first half of the Development Economics
sequence. In this part we focus on some aspects of development economics and on
the economics of transition. With regard to development economics we will focus
primarily on macroeconomic aspects of development, and on the role of
institutions and organization in economic development. We will also study some
aspects of stabilization and financial crises in developing countries. We will
then turn to the economics of transition. The balance between the two parts
will be an endogenous variable.
The basic question of development
economics is what accounts for differences in economic performance between rich
and poor countries. You could ask, “what makes some countries rich?”
Alternatively, it may be more fruitful to answer the question, “why are some countries
unable to become rich?” Recently, economists have focused on the role of
institutions in generating these differences. You could call the subject
comparative economic institutions. This focus also means that our concerns are
very close to those of economic history. Indeed, one could view economic
development and economic history as studying the same question, the former from
a cross-section perspective, the latter from a time-series perspective.
Grading
There will be a midterm and a final exam. In place of the final exam, you will be
allowed to submit a term paper. This could be used as the start of a
second-year paper or for anyone interested in working further in the field. The
paper should either present your own empirical work or reviews the literature
on a certain issue. The midterm will
count for 20% of the grade. The paper and/or final will each count for 35% of
your grade. The remainder of your grade
will be determined by class participation and presentations. You should meet with me early in the semester
to discuss your paper.
The
discussion may resemble the following outline. Some papers are available on the
web, and are marked WEB. Materials for this course can be found on my website: http://econ.la.psu.edu/~bickes/
1. Introduction
to Development and Transition Economics
What
is Development Economics about and how does it relate to Transition Economics?
Are the problems of emerging economies from poverty similar to those of
economies emerging from socialism? What does the study of transition teach us
about development? And vice versa? How should we think about this subject.
Ofer,
Gur, “Development
and Transition: Emerging, but Merging?” November 2000, mimeo, WEB.
Ickes, B.W., Lecture Note: Introduction to
Development and Transition. WEB
2. Stylized
Facts of Economic Growth and Explanations of Divergence
The most important stylized fact of
economic growth is the large divergence in output levels since the early 19th
century. One of the most important questions to ask is “what accounts for these
differences?” The answer will come in the second half of the sequence. In this
semester we will, for the most part, take the differences as given, and focus
on the systematic factors that inhibit growth in much of the world?
Maddison, Angus, The World Economy: A Millenial Perspective. Paris, OECD, 2001.
Hall, R.E., and C.I.
Jones, “Why Do Some Countries
Produce So Much More Output Per Worker Than Others?” Ouarterly Journal
of Economics, 114: 83-116, 1999 (also NBER Working Paper, 6564, June
1999).
Klenow, Peter and Andres Rodriguez-Clare, “The Neoclassical Revival in Growth Economics: Has it Gone Too Far?” NBER Macroeconomics Annual, 1997, 73-114.
Caselli,
Francesco, “Accounting for Cross-Country Income Differences,” Handbook of Economic Growth. Volume
1A. Editors, Philippe Aghion and Steven Durlauf, North Holland 2005:
679-742.
Banerjee,
A., and E. Duflo, “Growth Through
the Lens of Development Economics,” Handbook of Economic Growth. Volume 1A. Editors, Philippe Aghion and
Steven Durlauf, North Holland 2005: 473-552.
Ricardo Hausmann, Lant
Pritchett and Dani Rodrick, "Growth
Accelerations," Working Paper, NBER 10566, June 2004.
Burnside,
Craig, and David Dollar, “Aid, Policies, and Growth,”
AER, 90, 4, Sept 2000: 847-68.
Galor,
Oded and Omer Moav, “Natural Selection and the Origin of Economic Growth,” Quarterly Journal of Economics, 117
(November 2002).
Acemoglu,
Daron, Phillipe Aghion, and Fabrizio Zilibotti, “Distance to Frontier,
Selection, and Economic Growth,” June 2002, Web.
Easterly,
W., “Inequality Does Cause
Underdevelopment: New Evidence,” Center for Global Development, Working
Paper, 1, June 2002.
Hsieh,
Chang-Tai, and Peter Klenow, “Relative
Prices and Prosperity,” American Economic Review 97, June 2007, 562-585.
Hsieh,
Chang-Tai, and Peter Klenow, "Misallocation and Manufacturing TFP in
China and India", July 2007.
Parente,
S., and
Howitt,
Peter, “Endogenous
Growth and Cross-Country Income Differences,” AER, 90, 4, Sept 2000: 829-846.
Mokyr,
Joel, “Long-term
Economic Growth and the History of Technology” Handbook of
Economic Growth. Volume
1B. Editors, Philippe Aghion and Steven Durlauf, North Holland 2005:
1113-1180.
Bloom,
David and Jeffrey Williamson, “Demographic
Transitions and Economic Miracles in Emerging Asia” NBER Working Paper,
6268.
Bloom,
David, David Canning, and Jaypee Sevilla, “Economic Growth and the Demographic
Transition,” NBER Working Paper, 8685.
Weil,
David, “Accounting for the Effect of Health on Economic Growth,” QJE, CXXII, 3, August 2007: 1265-1306.
Azariadis,
Costas and John Stachurski, Poverty
Traps, in Handbook of Economic Growth Handbook of Economic Growth.
Volume 1A. Editors, Philippe Aghion
and Steven Durlauf, North Holland 2005:
295-383.
Easterly,
W., “Reliving
the 50s: the Big Push, Poverty Traps, and Takeoffs in Economic Development.”
Cole, H.L., Ohanian,
L.E., Riascos, A., and J.Schmitz Jr., "Latin America in the Rear View
Mirror," JME, 52, 1, January
2005: 69-108.
2.A Resource
Curse
Are abundant natural resources a benefit
or curse when it comes to economic development?
Sachs, J., and A. Warner
2001. “The Curse of Natural Resources,” European
Economic Review 45:827-838.
Hausmann, R., R.,
Rigobon, “An alternative
interpretation of the `resource curse': Theory and policy implications,”
NBER, January 2003.
Wright, G., and J.
Czelusta, "Mineral
Resources and Economic Development," Stanford, October 2003.
3. Institutions,
Organization and Economic Development
What role do institutions, and institutional innovation, play in economic development? We have seen that one explanation for the divergence that is observed across countries is related to institutions. We now turn to more specific mechanisms. How do economic organizations differ in developing and developed countries? The economics of organization explains the development of economic institutions as means of economizing on transactions costs. Are their specific problems faced by developing countries that inhibit the development of economic institutions? How does this impact on economic development? A theory of economic organization is crucial for development economics because of the wide variety of experiences observed. There is even an argument that this should form the basis for a new comparative economics.
Ray, chapters 5, 12.
Basu, chapters 1-2.
Stiglitz,
J. E., "Economic Organization, Information, and Development," Handbook of Development Economics, vol.
1, 1989.
Lin,
J.Y., “Collectivization and
Acemoglu,
Daron, Simon Johnson, and James Robinson, “Reversal of Fortune: Geography and
Institutions in the Making of the Modern World Income Distribution,” NBER
Working Paper, 8460, September 2001. WEB
Easterly,
W., and R. Levine, “Tropics, Germs, and Crops: How Endowments Influence
Economic Development,” Journal of Monetary Economics, 50, 1, January
2003: 3-39 (you can access a draft version here).
Glaeser,
E., R. La Porta, F. Lopez-de-Silanes, and A Shleifer, “Do Institutions Cause Growth?”
NBER Working Paper, 10568.
Engerman,
Stanley L., Kenneth L. Sokoloff, “Factor
Endowments, Inequality, and Paths of Development among New World Economies,”
NBER Working Paper 9259.
Greif,
Avner, "Contract Enforceability and Economic Institutions in Early Trade:
The Maghribi Traders Coalition," American
Economic Review, vol. 83, 3, June 1993.
Greif,
A., P. Milgrom, and B.R. Weingast, “Coordination, Commitment, and Enforcement:
The Case of the Merchant Guild,” Journal
of Political Economy, 102, 4, August 1994.
Greif,
A., “Cultural Beliefs and the Organization of Society: A Historical and
Theoretical Reflection on Collectivist and Individual Societies,” Journal of Political Economy, 102, 5,
October 1994.
Kremer,
M., “The O-Ring Theory of Economic Development,” Quarterly Journal of Economics, CVIII, 3, August 1993: 551-575.
Zak,
P., and S. Knack, “Trust and Growth,” Economic
Journal, April 2001.
Murphy,
Kevin, Andrei Shleifer, and Robert Vishny, “The
Allocation of Talent: Implications for Growth,” QJE, vol. 106, 2, May 1991: 503-30.
Caballero,
R., and M. Hammour, “Creative Destruction and Development: Institutions,
Crises, and Restructuring,” World Bank, ABCDE Conference, 2000. Web.
Hausmann,
Ricardo and Dani Rodrik, “ Economic
Development as Self-discovery,” NBER Working Paper 8952, November 2002.
Sachs,
Jeffrey, “ Institutions Don’t Rule:
Direct Effects of Geography on per Capita Income,” NBER Working Paper 9490,
February 2003.
Rodrik,
Dani and Arvind Subramanian, Francesco
Trebbi, “Institutions Rule: the
Primacy of Institutions over Geography and Integration in Economic Development,”
NBER Working Paper, 9305, November 2002.
Djankov,
Simeon , and Edward L. Glaeser, Rafael La Porta, Florencio Lopez-de-Silane,
Andrei Shleifer, “The New
Comparative Economics,” Journal of
Comparative Economics, Vol 31, 4, December 2003.
Pande,
R. and C. Udry, “Institutions
and Development: A View from Below,”
Guiso,
L., Sapienza, P., and L. Zingales, “Does
Culture Affect Economic Outcomes?
Schmitz, "What Determines Productivity?
Lessons from the Dramatic Recovery of the U.S. and Canadian Iron Ore Industries
Following Their Early 1980s Crisis," JPE, 113, 3, June 2005:
582-625.
Hsieh, Chang-Tei and
Peter Klenow, “Misallocation and
Manufacturing TFP in China and India,” July 2007.
4. Political
Economy and Policy Reform
We observe divergence and the
maintenance of policies that seem completely inimical to improved performance.
Why do these policies persist? Policy reform is a key issue for developing
economies. How reforms are implemented is often as important as what reforms
are implemented. This is especially important as it related to corruption. A
critical question for development economics is whether or not corruption is a
deterrent or a spur to growth.
Robinson,
Torvik, “A
Political Economy Theory Of the Soft Budget Constraint,” NBER Working Paper, March 2006.
Shelifer,
A. and R. Vishny, “Corruption,”Quarterly
Journal of Economics, CVIII, 3, August 1993: 5599-617.
Rajan,
R., and L. Zingales, “Creating
Constituencies for Reform”
Mauro, P., “Corruption and Growth,” QJE, CX, 3, August 1995.
Bardhan,
Pranab, “Corruption and Development,” Journal
of Economic Literature, Vol. XXXV, September 1997: 1320-1346.
Robinson, James A., and Ragnar Torvik, “White
elephants,” JPubEcon, 89, 2005:
197-210.
Krusell, Per and Jose-Victor Rios-Rull (1996).
“Vested Interests in a Positive Theory of Stagnation and Growth,” Review of Economic Studies 63, #2,
301-329.
Acemoglu,
Daron, “Why Not a Political Coase
Theorem? Social Conflict, Commitment, and Politics,” Journal of Comparative Economics, vol. 31, 4, December 2003.
Sonin,
K., “Why
the Rich May Favor Poor Protection of Property Rights,” Journal of Comparative Economics, vol.
31, 4, December 2003.
Basu,
Susanto, and David Li, “Corruption and Reform,” Davidson Institute Working Paper, June 1996.
Krueger, Anne O., Political Economy of Policy Reform in
Developing Countries. MIT Press, 1993.
Hausmann, Ricardo, Dani Rodrik, and
Andrés Velasco, 'Growth Diagnostics," March 2005.
Koren,
Miklos and Silvana Tenreyro, “Volatility and
Development,” QJE,
February 2007, Vol. 122, No. 1: 243-287.
Jones, Benjamin and Benjamin Olken, “The Anatomy of Start-Stop Growth,” ReStat, 90,3, August 2008: 582-587.
Tornell,
Aaron, “Economic Growth and Decline with Endogenous Property Rights,”
Alesina,
A., and R. Perotti, “Income Distribution, Political Instability, and
Investment,” European Economic Review, 40, 1996: 1203-1228.
Rodrik,
D., “Understanding Economic Policy Reform,” Journal
of Economic Literature, XXXIV, March 1996: 9-41.
Hoff, K., "Beyond Rosenstein-Rodan: The
Modern Theory of Underdevelopment Traps,"
Annual Bank Conference on Development Economics, 2000.
Fernandez, Raquel,
and Dani Rodrik, "Resistance to Reform: Status Quo Bias in the Precence of
Individual-Specific Uncertainty," American Economic Review, December 1991,
81, 5, 1146-1155.
Alesina, Alberto and
Alan Drazen, "Why are Stabilizations Delayed?" American Economic Review, December 1991, 81, 5. 1170-1188.
Mussa, Michael,
“Government Policy and the Adjustment Process, in J. Bhagwati, ed., Import Competition and Response,
University of Chicago Press, 1992.
Mehlum, Halvor, “Speed of adjustment and self-fulfilling failure of
economic reform,” Journal of
International Economics, vol. 53, 1, February 2001: 149-67.
Berglof, Erik, and
Patrick Bolton, “Law
Enforcement, Fiscal Responsibility and Economic Development,” May
2002.
5. Financial
Development and Financial Liberalization
Financial
Development is seen as a key part of the development process. But is this a
causal relationship? What is the mechanism? An important question has been how
applicable are such policies to developing and transition economies. Recently,
concern has shifted to financial instability. Does Financial Liberalization
enhance growth prospects once we take into account potential instability?
Levine, Ross,
“Financial Development and Economic Growth: Views and Agenda,” Journal of Economic Literature, vol.
XXV, June 1997, 688-726.
Acemoglu, Daron and
Fabrizio Zilibotti, “Was Prometheus Unbound by Chance? Risk, Diversification
and Growth,” JPE, vol. 105, 4, August
1997: 709-751.
Rajan, R., and L.
Zingales, “Financial Dependence and Growth,” AER, vol. 88, 3, June 1998: 559-586.
Rajan, R., and L.
Zingales, “The Great
Reversals: The Politics of Financial Development in the Twentieth Century,”
Journal of Financial Economics, forthcoming.
Bekaert, G., C.
Harvey, and C. Lundblad, “Does Financial Liberalization Spur Growth?” NBER Working Paper, 8245, April 2001.
Demirgüç-Kunt, Asli,
and Enrica Detragiache, “Financial
Liberalization and Financial Fragility,” Annual World Bank
Conference on Development Economics, Washington, D.C., April 20–21, 1998.
Prasad, Eswar S.,
Kenneth Rogoff, Shang-Jin Wei, and M. Ayan Kose, “Effects of
Financial Globalization on Developing Countries: Some Empirical Evidence,”
IMF Occasional Paper 220, March 2003.
6. Emerging Market Crises
Financial
liberalization, globalization and capital mobility may enhance growth
prospects, but they also increase the likelihood of financial instability in
emerging market economies. Capital inflows are important to developing
countries, but this also presents risks associated with financial instability.
Emerging market crises often involve both currency and banking crises. Are the
costs of these crises severe enough to offset the gains from liberalization?
Edwards, S., and S.
van Wijnbergen, "Disequilibrium and Structural Adjustment," Handbook of Development Economics, vol
2, 1989.
Khan, Mohsin,
"The Macroeconomic Effects of IMF-Supported Adjustment Programs: An
Empirical Assessment," IMF Staff
Papers, June 1990: 195-231.
Calvo, G., L.
Leiderman, and C.M. Reinhart, “Inflows of Capital to Developing Countries in
the 1990's,” Journal of Economic
Perspectives, 10, 2, Spring 1996: 123-139.
Calvo, G., and E.
Mendoza, “Mexico’s Balance of Payments Crisis: A Chronicle of Death Foretold,” Journal of International Economics, vol. 41,
3-4, November 1996: 235-264.
Agenor, P-R., and P.
Montiel, Development Macroeconomics,
Princeton, New Jersey, Princeton University Press, 1996: chapters 8, 10, 14,
16.
Radelet, S. and J.
Sachs, “The East Asian Financial Crisis: Diagnosis, Remedies, Prospects,” Brookings Papers on Economic Activity,
1, 1998: 1-74.
Chang, R., and
A.Velasco, “Financial Crises in Emerging Markets: A Canonical Model,” NBER
Working Paper, #6606, June 1998. WEB: http://www.nber.org/new.html#latest.
Burnside, C., M.
Eichenbaum and S. Rebelo 2001, "Prospective Deficits and the Asian
Currency Crisis", Journal of
Political Economy, December 2001.
Burnside, C., M.
Eichenbaum and S. Rebelo, “Government Guarantees and Self-fulfilling
Speculative Attacks,” Journal of Economic
Theory 119 (2004) 31-63.
Glick, R., Xueyan
Guo, and Michael Hutchison, “Currency Crises, Capital Account Liberalization, and
Selection Bias,” San Francisco Federal Reserve Bank, 2004.
Arrelano, Christina,
“Default Risk, the Real Exchange Rate, and Income
Fluctuations in Emerging Economies,” AER, 98, 3, June 2008: 690-712.
Caballero, R., and
A. Krishnamurthy, “Smoothing Sudden Stops,” NBER Working Paper 8427, August
2001. WEB
Ranciere, Romain ,
Aaron Tornell, and Frank Westermann, “Systemic Crises and Growth,” QJE, CXXIII, 1, February 2008: 359-406.
Aghion, Philippe ,
and Philippe Bacchetta and Abhijit Banerjee, “Financial
Development and the Instability of Open Economies,” Harvard,
December 2003.
6. Transition
The
transition from central planning to a market economy creates questions of
special importance to development economics. Transition economies are
underdeveloped, but in ways different from LDC’s. They have industry and they
have already undergone the rural-urban transition that is part of development,
but they lack the institutions of markets. How important are these
institutional gaps?
This
section is divided into subsections, as it comprises a subject in and of
itself. The first section provides background into the system from which the
transition starts.
A recent
report by the World Bank documents 10 years of transition and is a useful
source of information. It is available at:
http://lnweb18.worldbank.org/ECA/eca.nsf/Attachments/Transition1/$File/complete.pdf
1. Background
Ericson, Richard, "The Classical Soviet-Type Economy:
Nature of the System and Implications for Reform," Journal of Economic Perspectives, Fall, 1991.
GR,
chapter 1.
Ickes, Barry W., “Dimensions of Transition in Russia” in The Russian Economy in the 1990's, B.
Granville and P. Oppenheimer, eds., Oxford University Press, 2001. WEB:
http://econ.la.psu.edu/~bickes/granv.pdf
Hewett,
Ed A., Reforming the Soviet Economy:
Equity and Efficiency, Brookings, 1990.
Ofer,
Gur, "Soviet Economic Growth: 1928-1985," Journal of Economic Literature, December 1987.
Murrell, Peter "Evolution in Economics and in the
Economic Reform of the Centrally Planned Economies." in Clague, Christopher and Gordon C. Rausser,
eds. Emergence of Market Economies in
Eastern Europe, Blackwell Publishers, 1992.
Litwack, John, "Legality and Market Reform in Soviet
Type Economies," Journal of Economic
Perspectives, Fall, 1991.
Kornai, J.
"The Hungarian Reform Process:
Visions, Hopes, and Reality," Journal
of Economic Literature, Dec., 1986: 1687-1737.
Murphy, Kevin, Andrei Shleifer, and Robert Vishny,
"The Transition to a Market Economy: Pitfalls of Partial Reform," Quarterly Journal of Economics, August
1992.
Campos, Nauro F., and Fabrizio Coricelli, “Growth in
Transition: What We Know, What We Don’t, and What We Should,” JEL, XL, Sept 2002: 793-836.
2. Sequencing
McKinnon, R., The
Order of Economic Liberalization: Financial Control in the Transition to a
Market Economy, Johns Hopkins Press, 1991, chapter 2.
GR, chapters 2-3.
Dewatripont, M., and G. Roland, “Transition as a Process
of Large-Scale Institutional Change,” Economics
of Transition, 4, 1, 1996: 1-30.
Dewatripont, M. and G. Roland, “The Design of Reform
Packages under Uncertainty,” American
Economic Review, 85,5, December 1995.
Dewatripoint, M. and Roland, G. “The Virtues of Gradualism and Legitimacy in
the transition to a Market Economy,” Economic
Policy, March 1992.
McMillan, John, “Markets in Transition,” in D. Kreps and
K. Wallis, eds., Advances in Economics
And Econometrics: Theory and Applications. Cambridge University Press,
1996.
Ofer, Gur, "Stabilizing and Restructuring the Soviet
Economy: Big Bang or Gradual Sequencing?" in M. Keren, and G. Ofer, eds., Trials of Transition: Economic Reform in the
Former Communist Bloc. Boulder, CO; Westview Press, 1992.
Aghion, Phillipe and Olivier Blanchard, “On the Speed of
Transition in Central Europe,” NBER
Macroeconomics Annual. Cambridge, MA, 1994: 283-320.
Alexeev, Michael and Michael Kaganovich, “Dynamics of
Privatization Under a Subsistence Constraint,” Journal of Comparative Economics, 29, 2000: 417-447.
3. The
Output Fall and Stabilization
Blanchard, O., and M. Kremer, “Disorganization,” Quarterly Journal of Economics, CXII, 4,
November 1997.
Calvo, G., and F. Coricelli, “Output Collapse in Eastern
Europe: The Role of Credit,”
International Monetary Fund Staff Papers, 40, 1, March 1993.
Cochrane, J.H., and B.W. Ickes, "Macroeconomics in
Russia," in E. Lazear, ed., Economic
Transition in Eastern Europe and Russia: Realities of Reform. Hoover Institution Press, 1995.
Ericson, Richard E., “The Structural Barrier to Transition
Hidden in Input-Output Tables of Centrally Planned Economies,” Economic Systems, V.23, 3, September
1999, pp. 199-224.
Ickes, B.W., and Randi Ryterman, "The Interenterprise
Arrears Crisis in Russia," Post-Soviet
Affairs (formerly Soviet Economy), 8: 4, October-December, 1992: 331-61.
Ickes, B.W., and Randi Ryterman, "Roadblock to
Economic Reform: The Interenterprise Arrears Crisis in Russia," Post-Soviet Affairs (formerly Soviet
Economy), 9, 3, July-September, 1993.
Ickes, B.W., and Randi Ryterman, "Financial Underdevelopment and
Macroeconomic Stabilization in Russia," in G. Caprio, D. Folkerts-Landau,
and T. Lane, eds., Building Sound Finance
in Emerging Market Economies, World Bank-IMF, 1994.
Fischer, Stanley, Ratna Sahay, and Carlos Vegh,
“Stabilization and Growth in Transition Economies: Early Experience.” Journal of Economic Perspectives, Spring
1996.
Ickes, Barry W., Peter Murrell and Randi Ryterman, “End of
the Tunnel? The Effects of Financial Stabilization in Russia,” Post-Soviet Affairs (formerly Soviet
Economy), vol. 13, 2, April-June, 1997.
Fischer, Stanley, and Ratna Sahay, “The Transition
Economies After Ten Years,” IMF Working Paper, February 2000.
GR,
chapter 7.
4. Privatization
Boycko, M., A. Shleifer and R.W. Vishny, "Privatizing
Russia," Brookings Papers on
Economic Activity, 2:1993: 139-181.
GR,
chapters 4, 10.
Ickes, B.W., and Randi Ryterman, "From Enterprise to
Firm: Notes For a Theory of the Enterprise in Transition," in R.W.
Campbell ed., The Postcommunist Economic
Transformation: Essays in Honor of Gregory Grossman, Westview Press, 1994:
83-104.
Katz, B., and J. Owen, “Privatization: Choosing the
Optimal Time Path,” Journal of
Comparative Economics, 17: 715-736.
Laban, Raul and Holger Wolf, "Large-Scale
Privatization in Transition Economies," American Economic Review, 83, 5, December 1993.
Murrell, P., and Y. Wang, “When Privatization Should be
Delayed: The Effect of Communist Legacies on Organizational and Institutional
Reforms,” Journal of Comparative
Economics, 17: 385-406.
Roland, G. and T. Verdier, “Privatization in Eastern
Europe: Irreversibility and Critical Mass Effects,” Journal of Public Economics, 54, 1994: 161-183.
Rutland, Peter, "Privatization in Russia: One Step
Forward: Two Steps Back?" Europe-Asia
Studies (formerly Soviet Studies), 46, 7, 1994: 1109-1132.
Shleifer, A., and R. Vishny, “Politicians and Firms,” Quarterly Journal of Economics, CIX, 4,
November 1994: 995-1025.
5. Empirical Studies
Megginson and Netter, From State to Market: A Survey of
Empirical Studies on Privatization, Journal
of Economic Literature, Vol. 39, No. 2, June 2001.
Djankov, Simeon D. and Peter Murrell, “Enterprise
Restructuring in Transition: A Quantitative Survey” mimeo, WEB.
Berg, Andrew ; Borensztein, Eduardo R ; Sahay, Ratna, and
Jeromin Zettelmeyer, “The Evolution of Output in Transition Economies -
Explaining the Differences,” IMF Working Paper,
No. 99/73, January 1999, WEB.
Campos, Nauro F., and F. Coricelli, “Growth in Transition:
What We Know, What We Don’t, and What We Should” Global Development Network,
November 2000, WEB.
Guriev, Sergei, and Barry W. Ickes, “Microeconomic Aspects
of Economic Growth in Eastern Europe and the Former Soviet Union, 1950-2000,” Global Development
Network, September 2001, WEB.
Frydman, R., Gray, Cheryl, Marek Hessel, and Andrzej
Rapaczynski (1999). “When Does Privatization WorkThe Impact of Private
Ownership on Corporate Performance in Transition Economies,” Quarterly Journal of Economics, 114(4).
Jones, D., “The Economic Effects of Privatization:
Evidence from a Russian Panel,” CES,
XXXX, 2, Summer 1998: 75-102.
Linz, S., and G. Krueger, “Enterprise Restructuring in
Russia’s Transition Economy: Formal and Informal Mechanisms,” CES, XXXX, 2, Summer 1998: 5-52.
Zettelmeyer, Jeromin (1998). “The Uzbek Growth Puzzle,” IMF Working Paper 98.
6. Corporate
Governance and Corruption
Shleifer,
A. and R. Vishny, “A Survey of Corporate Governance,” Journal of Finance, 52, June 1997:737-783.
Braguinsky,
Sergei and Roger Myerson, “Oligarchic Property
Rights and Investment,” September 2004.
Aoki,
M., “Controlling Insider Control: Issues of Corporate Governance in Transition
Economies,” in M. Aoki and H Kim, eds., Corporate
Governance in Transitional Economies. The World Bank, 1995.
Claessens,
S., “Corporate Governance and Equity Prices: Evidence from the Czech and
Frydman,
R., C. Gray, and A. Rapaczynski, eds., Corporate
Governance in Central Europe and
GR, chapter 8.
Brada,
J., “Corporate Governance in
Hellman,
J., G. Jones, and D. Kaufmann, “Seize the State, Seize the Day” State Capture, Corruption,
and Influence in Transition,” World Bank Discussion Policy Research Working
Paper, 2444, September 2000. WEB
Wei,
Shang-Jin, and Yi Wu, “Negative Alchemy? Corruption, Composition of Capital
Flows, and Currency Crises,” Brookings, February 2001, WEB.
Johnson,
S., D. Kaufmann, and A. Shleifer, “The Unofficial Economy in Transition,” Brookings Papers on Economic Activity,
2, 1997.
Kaufmann,
Daniel and Aart Kraay, “Growth Without Governance,” World Bank Policy Research
Working Paper, 2928, November 2002.
Greif,
Avner, and Eugene Kandel, “Contract Enforcement Institutions: Historical
Perspective and Current Status in Russia, in Edward Lazear, ed., Economic Transition in Eastern Europe and
Russia, Hoover Institution Press, 1995.
Mehlum,
Halvor, Karl Moene, and Ragnar Torvik, “ Predator or Prey? Parasitic
Enterprises in Economic Development,” European
Economic Review, 47, 2003: 275-294.
7. Soft-Budget
Constraints
Schaffer,
Mark , “Do firms in Transition Have Soft Budget Constraints? A Reconsideration of
Concepts and Evidence,” J. Comp. Econ. 26:1, 1998: 80-103.
Dewatripont,
Mathias and Eric Maskin, “Credit and Efficiency in Centralized and
Decentralized Economies,” The Review of
Economic Studies 62:4, 1995: 541-55.
Kornai,
Janos, Eric Maskin, and Gerard Roland, “Understanding the Soft Budget
Constraint,” mimeo, Journal of Economic
Literature, LXI, 4, December 2003.
Segal,
Ilya R., “Monopoly and Soft Budget Constraint,” Rand Journal of Economics 29:3, 1998: 596-609.
Roland, chapter 8.
Deviatov, Alexei, and Barry W.
Ickes, “Reputation and the
Soft-Budget Constraint,” April 2004.
8. Restructuring
Aghion,
P., and O. Blanchard, “On the Speed of Transition in
The World Bank, From
Transition to Development: A Country Economic Memorandum for the Russian
Federation, draft, April 2004.
Ericson,
Richard E., "Cost Tradeoffs in Activity Shutdowns: A Note on Economic
Restructuring During the Transition,"
in Robert Campbell ed., The Postcommunist Economic Transformation:
Essays in Honor of Gregory Grossman, Westview Press, 1994
Ericson,
R., “Restructuring Investment in Transition: A Model of the
Blanchard,
O., The Economics of Post-Communist Transition.
Pinto,
Brian, Marek Belka and Stefan Krajewski, "Transforming State Enterprises
in
GR, chapter 5.
Gaddy,
Clifford and Barry W. Ickes, “To Restructure or Not to Restructure: Informal
Activities and
Ericson,
R.E., and Barry W. Ickes, “A Model of Russia’s Virtual Economy,” Review of Economic Design, vol. 6, 2,
September 2001.
Guriev,
Sergei and Barry W. Ickes, “Barter in
8.5 Federalism
and Governance
Blanchard,
Olivier, and Andrei Shleifer, “Federalism With
and Without Political Centralization,” October 2000.
Ickes,
Barry W., and Gur Ofer, “The
Political Economy of Structural Change in Russia,” November 2003.
Gaddy,
Clifford, and Barry W. Ickes, The Economics of
Market-Impeding Federalism,” November 2003.
9.
McMillan,
John, and Barry Naughton, “How to Reform a Communist Economy: Lessons from
Sachs,
Jeffrey and Wing T. Woo, “Structural Factors in the Economic Reforms of
Qian, Yingyi, “How Reform Worked in
Lau,
L., Y. Qian, and G. Roland, “Reform without Losers: An Interpretation of
China’s Dual-Track Approach to Reforms,” JPE,
vol. 108, 1, 2000: 120-163.
Li, Wei, “A Tale of
Two Reforms,” Rand Journal of
Economics, 30, 1999.
GR, chapter 6.
Young,
Alwyn, “Gold into Base Metals: Productivity Growth in the People’s Republic of
Young,
Alwyn, “The Razor’s Edge: Distortions and Incremental Reform in the People’s
Republic of
10. The
Transition Process
Roland,
Gerard, “The Political Economy of Transition,” William Davidson Working Paper
Number 413, December 2001 WEB.
Berglof,
Erik, and Patrick Bolton, “The Great Divide and Beyond: Financial Architecture
in Transition,” William Davidson Working Paper Number 414, December 2001 WEB.
Ickes,
Barry W., “Evolution and Transition,” in
GR, chapter 13.
Stiglitz, Joseph, “Whither Reform?
Ten Years of the Transition,” ABCDE Conference, 1999. WEB
Here is a link to last year’s final exam.