Saturday, 19 March 2011: 17:00
In this paper, the author reviews the evidence on output, employment, total factor productivity, and investment for Central East European and Baltic states (CEB) and Commonwealth of Independent States (CIS) after transition since 1990 to 2009. Transition in these countries led to a U-shaped response to output, that is, a sharp decline in output followed by recovery. In an analytical model of transition, reallocation and restructuring are two important factors. The results of this study highlight the importance of good management, corporate governance, access to world markets, and the presence of a functioning legal and institutional framework. The most important policy implication of this study is that transition per se does not guarantee improved performance, at least not in the short-run to medium term.