… if not us, then who? With special thanks to Jakub Zowczak for inputs and Monika Swaczyna for...

… if not us, then who?

With special thanks to Jakub Zowczak for inputs and Monika Swaczyna for comments

Transition in CEE – a comparative analysisKamil Pruchnik

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Transition in CEE – a comparative analysis

How changes in the political system and freedom influenced the pace of transition?

How was the level of public spending connected to the rate of transition?

Which was better a shock theraphy or a gradual approach?

Did success in transition trigger succes in relative income?

Did sucess in transition trigger sucess in overall development in the region?

Did sucess in transition result in increase in inequality?

Did success in transition result in increase in happiness?

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QuestionsQuestions

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Transition in the CEE – a comparative analysis

Poland

Hungary

Czechoslovakia

Lithuania

Ukraine

Belarus

Is an example of a country, which implemented a shock theraphy and was well prepared for the implementation of the reforms. Hungary was better prepared for carrying out reforms at the ‘starting point’ and, unlike Poland, it implemented a strategy of gradual reforms (i.e.: Smith 2009, Winiecki 2012)Country that had a much higher level of development than Poland (also had a better macroeconomic situation - see Smith 2009). Its reforms were introduced year after Poland's. It is also an interesting case, because Czechoslovakia ceased to exist in 1993. It has been divided into the Czech Republic and the Slovak Republic. As indicated by Winiecki (2012), Slovakia implemented more populist strategy which significantly hindered the process of transformation.Lithuania is a representative of the Baltic countries, which launched the reforms one year later but maintained a more restrictive fiscal and monetary policy.Ukraine, which in the initial year was as wealthy as Poland, represents the former communist bloc countries that are currently ‘stuck’ in the middle of the transition. The case of the Baltic States and Ukraine is also interesting because those are the countries that have experienced triple (instead of a double) transformation. In addition to changing political and economic system, they had to face the costly process of separation from the Soviet Union. The last country in the analysis is Belarus, which represents the ‘outsiders’ of transformation (i.e.: Turkmenistan and Uzbekistan).

Countries

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How was the level of public spending connected with the rate of transition?






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QuestionsQuestions

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0 1 2 3 4 5 6 7 81.5

2.0

2.5

3.0

3.5

4.0

4.5

Freedom Index

EBO

IR I

ndex

Transition and Freedom


6

0 1 2 3 4 5 6 7 81.5

2.0

2.5

3.0

3.5

4.0

4.5

Freedom Index

EBO

IR I

ndex



7

0 1 2 3 4 5 6 7 81.5

2.0

2.5

3.0

3.5

4.0

4.5

Freedom Index

EBO

IR I

ndex



8

0 1 2 3 4 5 6 7 81.5

2.0

2.5

3.0

3.5

4.0

4.5

Freedom Index

EBO

IR I

ndex

Leaders

Stuck in the middle

Failures Catching Up



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0 1 2 3 4 5 6 7 81.5

2.0

2.5

3.0

3.5

4.0

4.5 ESTONIASLOVAK REPUBLIC

LITHUANIA

CZECH RREPUBLICBULGARIA

CROATIA

ROMANIA

SLOVENIAGEORGIAARMENIA

KYRGYZ REPUBLICRUSSIAN FEDERATION MOLDOVA

UKRAINE

SERBIAKAZAKHSTAN

BOSNIA AND HERZEGOVINA

AZERBAIJAN

TAJIKISTAN

UZBEKISTANBELARUS

TURKMENISTAN

Freedom Index

EBO

IR I

ndex

Leaders

Stuck in the middle

Failures Catching Up

POLAND

HUNGARY



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QuestionsQuestions

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Public expenditure levels and the success rate of transition

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30

40

45

50

35

1,0

5,0

1,5

2,0

2,5

3,0

4,0

3,5

4,5

GDP growth (average annual), 1989-2014

Aver

age

annu

al p

ublic

spe

ndin

g (%

GD

P), 1

989-

2014


12


55

30

40

45

50

35

1,0

5,0

1,5

2,0

2,5

3,0

4,0

3,5

4,5


Aver

age

annu

al p

ublic

spe

ndin

g (%

GD

P), 1

989-

2014


13


55

30

40

45

50

35

1,0

5,0

1,5

2,0

2,5

3,0

4,0

3,5

4,5


Aver

age

annu

al p

ublic

spe

ndin

g (%

GD

P), 1

989-

2014


14


55

30

40

45

50

35

1,0

5,0

1,5

2,0

2,5

3,0

4,0

3,5

4,5


Aver

age

annu

al p

ublic

spe

ndin

g (%

GD

P), 1

989-

2014


Lax public finance

Strict public finance

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55

30

40

45

50

35

1,0

5,0

1,5

2,0

2,5

3,0

4,0

3,5

4,5


Aver

age

annu

al p

ublic

spe

ndin

g (%

GD

P), 1

989-

2014

Bosna & Herzegovi

na

Hungary

Slovenia

Croatia

Serbia

Bulgaria

Romania

Estonia

Latvia

Lithuania

Slovakia


Lax public finance


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55

30

40

45

50

35

1,0

5,0

1,5

2,0

2,5

3,0

4,0

3,5

4,5


Aver

age

annu

al p

ublic

spe

ndin

g (%

GD

P), 1

989-

2014

Bosna & Herzegovi

na

Hungary

Slovenia

Croatia

Serbia

Bulgaria

Romania

Estonia

Latvia

Lithuania

Slovakia


Lax public finance


Poland

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QuestionsQuestions

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Gradual reforms or shock theraphy?


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Gradual reforms or shock theraphy?


PolandHunga

ryCzech Rep.

Slovakia

Lithuania

Ukraine

Belarus

The year of strongest recession

1991 1993 1992 1992 1994 1998 1995

The dept of recession (1989=100)

82.2 81.9 84.6 84.5 53.3 36.6 73.6

No. of years of recession

2 4 3 3 5 10 4

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Which was better a shock theraphy oraz gradual approach?





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QuestionsQuestions

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Transition and change in relative income


0.6 5000.6 10000.6 15000.6 20000.6 25000.6 30000.6 35000.61.5

2

2.5

3

3.5

4

4.5

GDP per capita PPP ($, 2014)

EBD

R I

ndex

22



0.6 5000.6 10000.6 15000.6 20000.6 25000.6 30000.6 35000.61.5

2

2.5

3

3.5

4

4.5


EBD

R I

ndex

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0.6 5000.6 10000.6 15000.6 20000.6 25000.6 30000.6 35000.61.5

2

2.5

3

3.5

4

4.5


EBD

R I

ndex

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0.6 5000.6 10000.6 15000.6 20000.6 25000.6 30000.6 35000.61.5

2

2.5

3

3.5

4

4.5

ARMENIA

AZERBAIJAN

BELARUS


BULGARIA

CROATIA

ESTONIA

GEORGIA

HUNGARY

KAZAKHSTAN

KYRGYZ REPUBLICLATVIA

LITHUANIA

MOLDOVA

POLAND

ROMANIA

RUSSIAN FEDERATIONSERBIA

SLOVAK REPUBLIC

SLOVENIA

TAJIKISTAN

TURKMENISTAN

UKRAINE

UZBEKISTAN


EBD

R I

ndex

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2

3

4

5

6

7

QuestionsQuestions

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Transition and HDI


21 41 61 81 101 121 1411.5

2

2.5

3

3.5

4

4.5

HDI rank in 2013

EBD

R I

ndex

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Transition and HDI


21 41 61 81 101 121 1411.5

2

2.5

3

3.5

4

4.5

HDI rank in 2013

EBD

R I

ndex

28

Transition and HDI


21 41 61 81 101 121 1411.5

2

2.5

3

3.5

4

4.5

HDI rank in 2013

EBD

R I

ndex

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Transition and HDI


21 41 61 81 101 121 1411.5

2

2.5

3

3.5

4

4.5

ARMENIA

AZERBAIJAN

BELARUS


BULGARIA

CROATIA

ESTONIA

GEORGIA

HUNGARY

KAZAKHSTAN

KYRGYZ REPUBLIC

LATVIA

LITHUANIA

MOLDOVA

POLANDROMANIA


SLOVAK REPUBLIC

SLOVENIA

TAJIKISTAN

TURKMENISTAN

UKRAINE

UZBEKISTAN

HDI rank in 2013

EBD

R I

ndex

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Transition and Inequality


25 27 29 31 33 35 37 39 411.5

2

2.5

3

3.5

4

4.5

GINI 2015 (or latest)

EBD

R I

ndex

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25 27 29 31 33 35 37 39 411.5

2

2.5

3

3.5

4

4.5


EBD

R I

ndex

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25 27 29 31 33 35 37 39 411.5

2

2.5

3

3.5

4

4.5


EBD

R I

ndex

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25 27 29 31 33 35 37 39 411.5

2

2.5

3

3.5

4

4.5

ARMENIA

AZERBAIJAN

BELARUS


BULGARIACROATIA

ESTONIA

GEORGIA

HUNGARY

KAZAKHSTAN

KYRGYZ REPUBLIC

LATVIALITHUANIA

MOLDOVA

POLANDROMANIA


SLOVAK REPUBLIC

SLOVENIA

TAJIKISTAN

TURKMENISTAN

UZBEKISTAN


EBD

R I

ndex

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Transition and Education


0.62 0.67 0.72 0.77 0.82 0.87 0.921.5

2

2.5

3

3.5

4

4.5

ARMENIA

AZERBAIJAN

BELARUS


BULGARIA

CROATIAESTONIA

GEORGIA

HUNGARY

KAZAKHSTAN

KYRGYZ REPUBLIC LATVIALITHUANIA

MOLDOVA

POLANDROMANIA


SLOVAK REPUBLIC

SLOVENIA

TAJIKISTAN

TURKMENISTAN

UKRAINE

UZBEKISTAN

HDI Education Index (2013)

EBD

R I

ndex

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0.62 0.67 0.72 0.77 0.82 0.87 0.921.5

2

2.5

3

3.5

4

4.5


EBD

R I

ndex

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0.62 0.67 0.72 0.77 0.82 0.87 0.921.5

2

2.5

3

3.5

4

4.5


EBD

R I

ndex

38



0.62 0.67 0.72 0.77 0.82 0.87 0.921.5

2

2.5

3

3.5

4

4.5

ARMENIA

AZERBAIJAN

BELARUS


BULGARIA

CROATIA ESTONIA

GEORGIA

HUNGARY

KAZAKHSTAN

KYRGYZ REPUBLICLATVIA

LITHUANIA

MOLDOVA

POLANDROMANIA


SLOVAK REPUBLIC

SLOVENIA

TAJIKISTAN

TURKMENISTAN

UKRAINE

UZBEKISTAN


EBD

R I

ndex

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Transition and Happiness


4.00 4.50 5.00 5.50 6.001.5

2

2.5

3

3.5

4

4.5

World Happines Index Score

EBD

R I

ndex

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4.00 4.50 5.00 5.50 6.001.5

2

2.5

3

3.5

4

4.5


EBD

R I

ndex

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4.00 4.50 5.00 5.50 6.001.5

2

2.5

3

3.5

4

4.5


EBD

R I

ndex

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4.00 4.50 5.00 5.50 6.001.5

2

2.5

3

3.5

4

4.5

ARMENIA

AZERBAIJAN

BELARUS


BULGARIA CROATIA

ESTONIA

GEORGIA

HUNGARY

KAZAKHSTAN

KYRGYZ REPUBLIC

LATVIA LITHUANIA

MOLDOVA

POLAND

ROMANIA


SLOVAK REPUBLIC

SLOVENIA

TAJIKISTAN

TURKMENISTAN

UKRAINE

UZBEKISTAN


EBD

R I

ndex

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Sources:European Bank for Restructuring and Development (2013), Transition Report 2013 (EBRD Index)United Nations Development Programme (2015), International Human Development Indicators (HDI)

World Bank (2015), World Development Indicators (GINI, GDP)

Heritage Foundation (2015), Freedom House Index (Freedom Index)

Sustainable Development Solutions Network (2105), World Happiness Report 2015 (Happines Index)

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Thank you for your attention!


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… if not us, then who? With special thanks to Jakub Zowczak for inputs and Monika Swaczyna for...

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