The transition and the policy reforms in Central, South-East Europe and the Former Soviet Union
The transition and the policy reforms in Central, South-East Europe and the Former Soviet Union

Summary/Abstract: The paper presents evidence and analyses the influence of reform progress on growth in 26 transition economies during 1992-2002. A regression analysis explores the differences in the reforms implementation and growth performance across the transition economies during this period. The paper’s main finding is that policy progress has positive effect on growth performance and the inflow of the foreign direct investment, which will probably become more important engine of growth as time passes. Moreover, the paper tests the dynamics of policies, that is whether or not they operate with lag and tests whether or not the impact of policies differs across three regions. Although the immediate effect of reforms on output can be negative in some regions, accumulated effects and experience in the market economy is positively related to the growth.

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