This paper analyses the interaction between the political and economic reforms undertaken in post-communist countries since the early 1990s. The empirical investigation uses panel data from 27 transition countries for the period 1991 to 2005. Democratisation has led to market economic reforms, while the extent of economic reforms has not had any discernable effect on political developments. Macroeconomic performance has had little or no effect on political and economic reforms, while wars and civil strife have held back both kinds of reforms. Initial conditions have played an important role regarding the outcome of the transition: large macroeconomic distortions and a low development level have produced less democratisation and fewer market economic reforms. The prospect of EU membership has reinforced democratisation but has slowed economic reforms in the applicant countries.

Keywords: transition, economic reform, political reform

JEL classification: O52, P24

In this paper we review econometric efforts aiming to identify whether employee participation adds to productivity growth. The overall picture is mixed. Participation may lead to significant but not substantial higher productivity. The theoretical predictions, pointing to the importance of institutional setting and a need to establish quality cooperation and long-term commitment from both management and workers, seem to be supported by the empirical results. An emerging hypothesis is that both the intensity of involvement and a combination of involvement, economic rewards and participation in decisions significantly influence productivity.

Keywords: productivity, cooperation, participation
JEL classification: J5, L23

This paper uses an economywide model to study the impact of trade policy reform on male and female labor in Mozambique. The model disaggregates factor markets by skill and gender, and incorporates links between trade reform, product prices and wages by gender. The model also includes a detailed treatment of production technology and import protection, and is linked to a top-down microsimulation model of households. We find that trade policy has only a modest effect on gender wage differentials, and conclude that policy concerns with gender imbalances should focus on skill upgrading and sectoral mobility rather than on trade policy.

JEL codes: D58, O24, O55

This study is about the growth and development performance of non-industrialized regions in the latter part of the 20th century. We find that sustained per capita GDP growth was accompanied by structural change in terms of output and labor share shifts as well as productivity growth with (in some cases) strong reallocation effects due to movements of labor from low to high productivity sectors. Regions that did not enjoy per capita growth showed little structural evolution apart from a rising employment/population ratio in service sectors. On the demand side, we examine shifts in net borrowing by the private sector, government, and rest of the world. Mutually offsetting co-movements of government and foreign net borrowing occurred sporadically at most. In other words, the widely accepted “twin deficits” view of macro adjustment does not seem to apply. Macroeconomic flexibility, on the other hand, may be very important. The policy background for these findings is sketched out along with a critique of justifications provided by the World Bank. Proposals are advanced for policy changes.</

In this essay I argue that to develop institutions that promote economic development societies must be equitable in fundamental ways. I particularly emphasize how important an equitable distribution of political power in society is to have well functioning institutions that support market activities. I show these ideas are consistent with broad patterns in the cross-national data and country case studies.</

People around the world do not have the same chances to live, learn, work, and participate in society’s activities, because these opportunities are greatly influenced by circumstances beyond their control, including their country of birth. Global equity is worth pursuing for its own sake and for greater global prosperity. Concrete changes in global policies and global governance are needed to bring about greater equity: better aid to help poor countries make up for limited endowments, more space for legal migration of unskilled workers, more open trade (particularly for agricultural goods), less restrictive protection of intellectual property rights, and reforms in global governance.

JEL Classification Number: D30, F02, O19