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21. A quarter century of economic reforms in Ukraine: too late, too slow, too little

Author:
Oleh Havrylyshyn
Publication Date:
03-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The first aim of this paper is to describe the main developments in the Ukrainian economy since its independence in 1991, focusing on the evolution of output, and the path of economic reforms — that is, to simply show what happened. The bottom line on that is well known: Ukraine’s economy performed very poorly, and its reforms moved quite slowly, lagging behind most of Central Europe and the Baltic, and even behind some FSU (Former Soviet Union) countries. This first task is a relatively easy one, though some measurement issues do need discussion. In comparison, the second aim — explaining why it happened, identifying the explanatory, causal factors — is much more difficult and contentious. Indeed, causation here means two dynamics: the relationship between performance and reform pace, and the underlying determinants of the slow reforms. The paper’s main effort will be to argue and present evidence that the poor economic performance is primarily due to the late and slow start on economic reforms. However, it only begins to point to the explanations for slow reforms and suggest a modeling approach to analyze this econometrically in future work.
Topic:
Development, Markets, Economy, Transitional Justice, Institutions, and Trade Liberalization
Political Geography:
Europe, Ukraine, and Eastern Europe

22. Institutions of the Russian fiscal federalism: 20 years of evolution

Author:
Elena Jarocinska
Publication Date:
06-2014
Content Type:
Policy Brief
Institution:
Center for Social and Economic Research - CASE
Abstract:
In this brief, Elena Jarocinska summarizes the main thrust of Russian federal fiscal institutions and discusses their specific features. She describes the evolution of federal fiscal regulations since the establishment of the Russian federal state. As a conclusion, she offers the following policy recommendations: tax autonomy of subnational governments which is currently very limited should be increased; federal aid should be further formalized and made more transparent; regulations should not be changed from year to year to provide for a more stable environment; and subnational interests should be better protected at the institutional level.
Topic:
Monetary Policy, Reform, Tax Systems, Institutions, Fiscal Policy, Trade, and Post-Socialist Economies
Political Geography:
Russia, Europe, Central Asia, Caucasus, and Eastern Europe

23. Future scenarios for the development of the European labour force

Author:
Anna Ruzik-Sierdzińska
Publication Date:
02-2014
Content Type:
Policy Brief
Institution:
Center for Social and Economic Research - CASE
Abstract:
The future size and quality of the European labour force are important production factors for future economic growth in the region. The performance of many systems such as social security and health depends on the population of future potential tax payers. Older workers are an important and increasing share of the employment in Europe. Due to lower fertility and longer life expectancy, today, a larger than ever share of the population is over 50. Eurostat projections show that the share of people between the ages of 50 and 74 in the population aged 20-74 will increase in the EU27 countries from the current 40 per cent to 47 per cent in 2050. However, countries differ in terms of elderly activity. Existing studies show that this is related to various factors, including labour market institutions. As demographic ageing is expected to continue in the future, it is important to know more about these factors in order to recommend policies that could be efficient for the development of future labour markets and the economy as a whole. The aim of the described part of the project was to assess the impact of ageing on the labour market, especially on the structure of the labour force and labour productivity. We looked at this from various angles. First, we examined it via the determinants of the transition from work to retirement (see: Riedel and Hofer, 2013) with a broader analysis of non-labour market activities at older ages (Styczyńska et al., 2013). Then, we tried to answer the question about how individual productivity changes with age in different countries and if lifelong learning can contribute to higher labour productivity in the future (Ruzik-Sierdzińska et al., 2013). Finally, we looked at the demand for labour in the perspective of ageing societies, i.e. at employers' policies, attitudes and behaviours towards older workers and retirement (van Dalen et al., 2013).
Topic:
Demographics, Markets, Labor Issues, Social Policy, Public Policy, and Aging
Political Geography:
Europe, Central Asia, Caucasus, Eastern Europe, and European Union

24. Conceptual Framework of the Active Ageing Policies in Employment in the Czech Republic

Author:
Lucie Vidovićová
Publication Date:
03-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
In this paper the author presents a general assessment of the labour market situation of older workers in the Czech Republic, starting with a more general overview of the demographic situation and emphasizing the generational differences among the young-old and older cohorts, underlying a number of different problems as well as solutions. Further in the paper she addresses the impact of the recent economic situation on employment levels, showing that the recovery in terms of employment has not yet begun and that the impact on older workers is (at least) two-fold: firstly, for older workers it is very difficult to find a new job once unemployed; secondly, if employed, the pressure on workability and the increasing demands of workplaces may be harder to bear for the older the worker. She describes a National Action Plan Supporting Positive Ageing (2013-2017) and other examples of good and transferable praxes which address some of the active ageing issues in an innovative way. The second part of this report examines the issues of employability, workability and age-management as perceived by some of the key actors. The report goes into greater detail on the topic of paid work after retirement, which is considered an important part of the Czech economy, despite the fact that the employment of sizable groups of older workers after retirement is undeclared. Self-entrepreneurship and independent work in later life are another realm of employment that is increasing in importance in the Czech economy; however, as consulted experts argue, it is not to be taken as an unproblematic solution to late-life careers. In the last chapter the author turns her attention to the lifelong learning of older workers and to their up-skilling/retraining. In the concluding remarks, she reemphasizes the need to address the heterogeneity of the older workforce, in the sense of age/generational affiliation, health, socio-economic and other characteristics.
Topic:
Demographics, Employment, Social Policy, Aging, Social Services, and Labor Market
Political Geography:
Europe, Eastern Europe, and Czech Republic

25. Macroeconomic and fiscal challenges faced by the Southern and Eastern Mediterranean region

Author:
Marek Dabrowski
Publication Date:
04-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The current fiscal imbalances and fragilities in the Southern and Eastern Mediterranean countries (SEMC) are the result of decades of instability, but have become more visible since 2008, when a combination of adverse economic and political shocks (the global and European financial crises, Arab Spring) hit the region. In an environment of slower growth and higher public expenditure pressures, fiscal deficits and public debts have increased rapidly. This has led to the deterioration of current accounts, a depletion of official reserves, the depreciation of some currencies and higher inflationary pressure. To avoid the danger of public debt and a balance-of-payment crisis, comprehensive economic reforms, including fiscal adjustment, are urgently needed. These reforms should involve eliminating energy and food subsidies and replacing them with targeted social assistance, reducing the oversized public administration and privatizing public sector enterprises, improving the business climate, increasing trade and investment openness, and sector diversification. The SEMC may also benefit from a peace dividend if the numerous internal and regional conflicts are resolved. However, the success of economic reforms will depend on the results of the political transition, i.e., the ability to build stable democratic regimes which can resist populist temptations and rally political support for more rational economic policies.
Topic:
Financial Crisis, Arab Spring, Macroeconomics, Fiscal Policy, and Instability
Political Geography:
Eastern Europe, Mediterranean, and Southern Europe

26. Forecasting Financial Stress and the Economic Sensitivity in CEE Countries

Author:
Grzegorz Poniatowski and Maciej Krzak
Publication Date:
07-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This paper presents forecasts for the Financial Stress Index (FSI) and the Economic Sensitivity Index (ESI) for the period 2015-2015 for six countries in the region, namely the Czech Republic, Estonia, Hungary, Latvia, Lithuania and Poland. It is a continuation of the endeavor to construct synthetic indices measuring financial stress and economic sensitivity for twelve Central and East European countries using the Principal Component Analysis. In order to obtain forecasts of the FSI, we estimated Vector Autoregression (VAR) models on monthly data for the period 2001-2012 separately for all the countries. Using quarterly historical values of ESI and FSI, we estimated Dynamic Panel Data Model for the complete sample of countries. Parameters of the model were later used for forecasting the ESI. Obtained results suggest that the FSI will start to rise in 2014 in the Czech Republic, Lithuania, and Estonia. For Latvia and Hungary, we observed a conversion in the trend, i.e. at the beginning of 2015, when the index should start to fall. According to our forecasts, the ESI will be rising in the next two years, except for Hungary, where we predict a continuous decrease in economic sensitivity.
Topic:
Economics, Financial Crisis, and Macroeconomics
Political Geography:
Europe, Central Asia, Caucasus, Eastern Europe, Poland, Lithuania, Estonia, Hungary, Latvia, and Czech Republic

27. EU cooperation with non-member neighboring countries: the principle of variable geometry

Author:
Marek Dabrowski
Publication Date:
09-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
In this study the author analyzes the experience of the European Union in cooperation with non-member neighboring countries, to which the EU’s integration process and institutions are both available. On the one hand, several non-member countries are interested in close cooperation or integration with the organization because of their future membership aspirations or simply because they consider the EU an important economic and political partner. On the other hand, the EU itself is also interested in building such close relations, for economic but often also for geopolitical and security reasons.
Topic:
Globalization, European Union, Trade, and Economic Integration
Political Geography:
Europe, Central Asia, Caucasus, and Eastern Europe

28. True and false remedies for long time unemployment in Visegrad countries

Author:
Ágota Scharle
Publication Date:
10-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
Two in ten working age adults have been out of work for over a year in Visegrad economies and long term joblessness is especially high among the uneducated. The employment disadvantage of uneducated workers tends to be larger than in Western European countries, and is especially grievous in Hungary, where a relatively large share of the labour force has only completed primary school. The build-up of long term joblessnes may take its toll both on the individual and the economy. Beside the loss of human capital and potentially harmful effects on health and mental health, the lower job search intensity of the long term unemployed may lead to weaker wage adjustment and slower economic recovery. Long term non-employment also increases poverty and social exclusion, which may further constrain economic growth. Reducing long term unemployment by activating the unemployed, increasing the education level or preventing early retirement could potentially increase the total employment rateby 2-3 % points in the Visegrad countries.
Topic:
Social Policy, Human Capital, Unemployment, Social Services, and Labor Market
Political Geography:
Eastern Europe and Hungary

29. Measuring financial stress and economic sensitivity in CEE countries

Author:
Grzegorz Poniatowski, Katarzyna Waşik, and Maciej Krzak
Publication Date:
01-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report presents the methodology for the construction of the Financial Stress Index (FSI) and the Economic Sensitivity Index (ESI) and investigates the economic situation in twelve Central and East European Countries (CEECs) between 2001 and 2012. The objective of this paper was to capture key features of financial and economic vulnerability and examine the co-movement of economic turmoil and financial disturbances that strongly affected the CEECs in the last decade. The main finding is that the FSI can be used as a leading indicator and can be used to recognize changing trends in the index. A shift in the value of the index proves that EU accession has a positive, but minor influence on financial stability in the CEECs. On the other hand, the impact of the introduction of the euro in Estonia, Slovakia and Slovenia is ambiguous. For most of the countries in our sample, the FSI started to grow rapidly in 2007, reaching its peak around the third quarter of 2008. Consequently, financial stress remained high for a few quarters and started to fall gradually. For a number of countries, we observe higher financial stress in the latest period of our analysis, i.e. 2010-2012. However, the value of the FSI was significantly lower than three years earlier. The results show that indices might be helpful in predicting future recessions. Consequently, the model will be expanded by adding a forecasting module, the launch of which is planned for April 2014.
Topic:
Economics, Finance, Macroeconomics, and Trade
Political Geography:
Europe and Eastern Europe

30. Cost and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries

Author:
Luca Barbone and Matthias Luecke
Publication Date:
10-2013
Content Type:
Policy Brief
Institution:
Center for Social and Economic Research - CASE
Abstract:
Migration from Eastern Partnership (EaP) countries has only become a large and important phenomenon over the last twenty years. At its heart, labour migration reflects entrepreneurial decisions by individuals and families looking to improve their lives while facing complex challenges and opportunities. In the past, the language of "migration management" was sometimes used to suggest that migrants and migration needed to be “managed” to achieve government objectives. By contrast, in adopting a migrant-centered perspective, our project aimed to understand, first, EaP migrants’ incentives and the effects of migration on migrants and their families, on non-migrants in the country of origin, and on residents of the destination country. Second, we investigated how labour migration is shaped by and interacts with a wide range of government policies and which policy interventions can enhance the benefits of migration for the affected groups.
Topic:
Demographics, Markets, Migration, Labor Issues, Social Policy, Innovation, and Social Services
Political Geography:
Europe, Central Asia, Caucasus, Eastern Europe, and European Union