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1. Is a bubble inflating on Poland’s housing market?

Author:
Adam Czerniak and Stefan Kawalec
Publication Date:
03-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The year 2019 brought double-digit growth in Polish housing prices, for both new and existing homes. In some cities, real prices for residential real estate have reached the highest levels in history, even higher than at the peak of the boom in 2008. As a result, some are saying that there is a growing price bubble. But thus far no research has been produced that would comprehensively verify this hypothesis on the basis of data from 2006-2019. This work aims to fill that gap. This is exceptionally important, because assessing the likelihood that a housing price bubble is emerging is key for the conduct of monetary and macroprudential policy in Poland. Because if we’re really dealing with growth in macroeconomic imbalances, then taking pre-emptive action to limit further price growth and prepare the economy (including the financial sector) for a potential collapse in housing prices is essential for limiting fluctuations in growth.
Topic:
Markets, Economic Growth, Trade, and Housing
Political Geography:
Eastern Europe and Poland

2. Our Europe: 15 Years of Poland in the European Union

Author:
Jerzy Wilkin, Joanna Konieczna-Sałamatin, Mirosława Marody, Maja Sawicka, Paweł Kaczmarczyk, Jan J. Michałek, Andrzej Halesiak, Stanisława Golinowska, Irena Topińska, Anna Fornalczyk, Richard Woodward, Grzegorz Gorzelak, Andrzej Kwieciński, Katarzyna Zawalińska, Przemysław Kowalski, Anna Malinowska, Wiesława Kozek, Magdalena Kąkol, Maciej Nowicki, Grzegorz Wiśniewski, Andrzej Cylwik, Tomasz Komornicki, Urszula Sztanderska, Jacek Liwiński, Dorota Ilczuk, Anna Karpińska, Przemysław Kowalski, Mateusz Szczurek, Stanisław Gomułka, and Paweł Wojciechowski
Publication Date:
02-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report is the result of the joint work of a number of experts from various fields who have been - for many years – analysing the multidimensional effects of EU institutions and cooperation with Member States pursuant to European values and mechanisms. The authors summarise the benefits of Poland’s membership in the EU based on facts; however, they do not hide their own views and reflections. They also demonstrate the barriers and challenges to further European integration. This report was prepared by CASE, one of the oldest independent think tanks in Central and Eastern Europe, utilising its nearly 30 years of experience in providing objective analyses and recommendations with respect to socioeconomic topics. It is both an expression of concern about Poland’s future in the EU, as well as the authors’ contribution to the debate on further European integration.
Topic:
Climate Change, Demographics, Energy Policy, Labor Issues, Economic Growth, Regional Integration, Social Policy, Fiscal Policy, Innovation, and Trade
Political Geography:
Europe, Eastern Europe, and Poland

3. Guidebook: Direction: An Efficient State

Author:
Gvantsa Ichkiti, Hasmik Grigoryan, Agnieszka Kulesa, Salome Kandelaki, and Stanislav Bieliei
Publication Date:
12-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The Polish Decentralisation Guidebook aims at presenting in a synthetic way the experience of Poland regarding the re-introduction of local government and the decentralisation process since 1989. Its main goal is to provide representatives of central and regional authorities, experts, and representatives of opinion-forming circles in Armenia and Georgia with relevant information and knowledge. The idea of the authors of this Guidebook was to facilitate mutual learning between the countries, the exchange of good practices, and lessons learned. The territorial division of Armenia was established in 1995. Now the country has two levels of administrative division – regions and communities – and the local self-government is exercised only on the level of communities. In the case of Georgia, administrative reform aimed at introducing local government started in 1997. Currently, self-government in Georgia is exercised on just one level – in municipalities (including self-governing cities and self-governing communities). Poland’s experience, in which local government units are established on all three levels of territorial division, might be useful to Armenia and Georgia, if they wish to further reform their territorial administration and pursue decentralisation. This Guidebook is comprised of four main parts. The first part is devoted to the presentation of the Polish experience in five selected areas: Empowerment of local communities Financing of local government units Providing public services Absorption of external funds by local governments Crisis responses The second part is dedicated to the presentation and analysis of needs and main blocking points in decentralisation in Armenia, while the third one concentrates on Georgia. Both of them are structured around the five above-listed areas. The last but very most important section of this Guidebook provides a set of recommendations for Armenia and Georgia based on the Polish experience in introducing local government and decentralisation. The country-specific sections of this Guidebook were prepared mainly on the basis of the results of desk research. This included reviewing the existing literature, relevant state strategies and action plans as well as reports developed by local and international organisations. Key legal acts were also reviewed. In addition, interviews with representatives of local municipalities and other stakeholders were carried out in Armenia and Georgia. This Guidebook was developed as part of the project called ‘Direction: an efficient state. Polish experiences of decentralisation and modernisation, lessons learned for Armenia and Georgia’ co-funded by the Ministry of Foreign Affairs of the Republic of Poland. It is the joint work of three partner institutions: CASE – Center for Social and Economic Research based in Warsaw, the Tbilisi-based Georgian Institute of Politics (GIP), and the Analytical Centre on Globalization and Regional Cooperation (ACGRC) from Yerevan.
Topic:
Demographics, Labor Issues, Governance, Economic Growth, Social Policy, Trade, and Decentralization
Political Geography:
Eastern Europe, Poland, and Armenia

4. The Impact of the State on the Quality of an Economic System: A Cross-Country Analysis

Author:
Maciej Bałtowski and Piotr Kozarzewski
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
The paper discusses the role of the state in shaping an economic system which is, in line with the welfare economics approach, capable of performing socially important functions and achieving socially desirable results. We describe this system through a set of indexes: the IHDI, the World Happiness Index, and the Satisfaction of Life index. The characteris-tics of the state are analyzed using a set of variables which describe both the quantitative (government size, various types of governmental expenditures, and regulatory burden) and qualitative (institutional setup and property rights protection) aspects of its functioning. The study examines the “old” and “new” member states of the European Union, the post-communist countries of Eastern Europe and Asia, and the economies of Latin America. The main conclusion of the research is that the institutional quality of the state seems to be the most important for creation of a socially effective economic system, while the level of state interventionism plays, at most, a secondary and often negligible role. Geographical differentiation is also discovered, as well as the lack of a direct correlation between the characteristics of an economic system and the subjective feeling of well-being. These re-sults may corroborate the neo-institutionalist hypothesis that noneconomic factors, such as historical, institutional, cultural, and even genetic factors, may play an important role in making the economic system capable to perform its tasks; this remains an area for future research.
Topic:
Demographics, Economy, Economic Growth, State, Economic Policy, Institutions, Trade, and Welfare
Political Geography:
Europe, Eastern Europe, Asia, Latin America, and European Union

5. The Relevance of Financial and Economic Factors for Determining Banking Risk across Europe

Author:
Renata Karkowska
Publication Date:
11-2017
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
The goal of this study is to identify empirically how country-level development, taking into account the financial and macroeconomic environment, affect the risk profiles of the banking sector in Europe. Through a dataset that covers 3,399 European banks spanning the period 1996-2011, and the methodology of panel regression, the empirical findings document the heterogeneity of banking risk determinants. I examine the implications of bank leverage that manifest itself as spreading and growing instability. The study contributes to and combines the different strands of literature and understanding of the importance of the links between the variables. It also contributes to the literature by focusing on a group of countries from Central and Eastern Europe and the Commonwealth of Independent States that have not been studied before. The extended model provides a causal link between risk in the banking sector and the growth of the financial market and macroeconomy. I apply four measures of country-level development that are available in previous studies: share of foreign ownership in the banking sector; the financial freedom index; the real growth rate; and stock market capitalization. Using these measures, I obtain different results which highlight the fact that the effect of macroeconomic and financial development on banking sector risk-taking is ambiguous.
Topic:
Financial Markets, Economic Growth, Banks, Trade Liberalization, Macroeconomics, and Trade
Political Geography:
Europe, Eastern Europe, Central Europe, and European Union

6. How Not to Get Stuck in the Middle Lessons for the Commonwealth of Independent States from Central and Eastern Europe

Author:
Jakub Zowczak and Kamil Pruchnik
Publication Date:
09-2017
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
The aim of this paper is to analyze how different models of transformation in Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) increased or decreased the risk of being stuck in the middle-income trap (MIT). The key finding is that the CEE and CIS countries are, from a definition point of view, not materially at risk of the MIT as out of nine selected MIT definitions, none of the CEE or CIS countries were “stuck” more than three times. At the same time, the CEE countries are more at risk of falling into the MIT than the CIS countries; however this is because the CIS is a poorer region and is not near the lower MIT thresholds. The CEE countries had a better start at the beginning of the transformation and on average implemented a better set of transformation models; however, some CEE countries are now struggling to permanently join the advanced countries and CIS countries are, on average, far behind that. The literature review on transformation models and the analysis of the “jumps” in the World Bank ranking classification suggest that while the MIT is not a concern for CEE or CIS countries, in order to speed up convergence, CIS countries might consider more shocks and consistently following free market related approaches. The study fills a gap in the literature on the MIT which has thoroughly analyzed the Asian and Latin American countries but has provided little analysis of the CEE and CIS countries.
Topic:
Finance, Economic Growth, Economic Policy, and Trade
Political Geography:
Europe, Eastern Europe, and Central Europe

7. Russia’s Crony Capitalism: Stagnant But Stable

Author:
Anders Åslund
Publication Date:
09-2017
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The Russian economy is caught in stagnation, but thanks to a skillful macroeconomic policy, the economy has stabilized. The current economic model is dualistic. On the one hand, the so-called systemic liberals are in charge of macroeconomic policy, which they pursue eminently. On the other, President Vladimir Putin allows state corporations, cronies, and law enforcement agencies to dominate the corporate economy, enriching themselves with little consideration of legality. Anders Aslund's paper discusses the state of the Russian economy and the prospects for reform and growth.
Topic:
Corruption, Economics, Reform, Capitalism, Economic Growth, Putin, Cronyism, and Macroeconomics
Political Geography:
Russia and Eastern Europe

8. Quo vadis, Ukraine? Is there a chance for success?

Author:
Ivan Mikloš
Publication Date:
01-2016
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
"If I were to say just one thing about Ukraine, I think I would have to stress it is the most underperforming country of all the countries I know. Ukraine has had, and indeed still does have, a lot of potential. In the beginning of 1990s, in 1992 to be precise, Deutsche Bank prepared an analysis of the chances for the former Soviet Union states to be reformed and developed successfully, and according to this analysis, Ukraine had the best chance among them all to be successful. We know that in reality the opposite happened, and Ukraine is in a very difficult situation now. The main reason for this situation is that when at the beginning of 1990s communist countries collapsed, the old system in Ukraine was not replaced by a new one, one of functioning market economy. It was eroded, but not exactly replaced the way it happened for example in Poland, Czechoslovakia, Hungary, and the Baltic states. The country was captured by oligarchs, and a very strange, dysfunctional, and corrupted system was created instead."
Topic:
Development, Economies, Finance, Economic Growth, Trade, and Post-Socialist Economies
Political Geography:
Europe, Central Asia, Ukraine, Caucasus, Eastern Europe, and Poland

9. Transfer of know-how to small and mid-size businesses in Georgia – White paper

Author:
Maya Grigolia, Lasha Labadze, Pavol Minarik, Alena Zemplinerova, and Marek Vokoun
Publication Date:
09-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report has been prepared in the framework of the project “Transfer of know-how to small and mid-size businesses” of the International Visegrad Fund (IVF) and USAID. It summarizes the conditions of the SME sector (small and medium size enterprises) in Georgia, identifies the main problems in their development and provides recommendations for further interventions based on the Czech experience, existing literature and a survey implemented among SME stakeholders. Georgia generally receives favorable evaluations of its business environment. It ranks high in indices of economic freedom and is among the top countries with respect to ease of starting and doing business. On the other hand, the SME sector suffers from several problems. The most serious obstacle to SME development seems to be in the area of finance; access to finance is difficult for SMEs and the cost of credit is high. Human capital and innovations are among the weak points of Georgian SMEs as well. The different shortcomings of the environment and markets call for different interventions. The paper is roadmap of concrete activities – it contains a set of recommendations to support SMEs development drawn on three different sources: first, the theoretical foundations of entrepreneurship policy, second, the Czech experience and know-how in the SME sector, and finally, the ideas of local experts and stakeholders generated during interviews and workshops. Activities and recommendations have been divided into “generic,” which relate to a particular determinant of business environment and have an impact across industries and sectors such as access to financing, education, developing skills training, R&D, innovation, export strategy, start-ups, and those which are “sector-specific,” such as banking, health and agriculture. Political stability, the main problem in Georgia, is beyond the scope of possible interventions.
Topic:
Development, Reform, Business, Economic Growth, Institutions, Innovation, and Trade
Political Geography:
Central Asia, Caucasus, Eastern Europe, and Georgia

10. Revisiting the Latvian and Greek Financial Crises: The Benefits of Front-Loading Fiscal Adjustment

Author:
Anders Åslund
Publication Date:
05-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This paper discusses why Greece has done so poorly in comparison with all other European Union countries since the onslaught of the global financial crisis in 2008. To show what was wrong with its fiscal adjustment, this paper compares Greece with the other European Union country that was hit be the most severe fiscal crisis, namely Latvia. The conclusion is that front-loaded fiscal adjustment works much better. Greek economic policy has been a popular topic among opinion writers, notably Nobel Prize winner and New York Times columnist Paul Krugman, who claimed that Greece suffered from austerity. Because of his prominence in the international public debate, I shall scrutinize his arguments on the Greek crisis. The paper also examines what policy the International Monetary Fund has pursued with regard to Greece, and how its views have been influenced by the debate and Greek economic developments. Finally, the paper assesses what lessons can be drawn from the contrasting experiences of Latvia and Greece. The conclusion is that a fiscal adjustment should be sufficient to resolve the crisis to restore confidence and that it should be as front-loaded as is practically and politically possible.
Topic:
Financial Crisis, Finance, Economic Growth, Macroeconomics, Fiscal Policy, and Trade
Political Geography:
Europe, Eastern Europe, Greece, and Latvia

11. Transfer of Know-how for SMEs in Georgia, Moldova and Ukraine. White Paper: Moldova

Author:
Gabor Hunya, Lidis Garbovan, Magdolna Sass, and Oliver Kovacs
Publication Date:
05-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The report focuses on the potential of the development of small and mid-size businesses in Moldova. It provides an economic overview of the country, and then analyzes various best practices and lessons learned from the development of SMEs in the Visegrad countries, especially Hungary. The report provides a description of economic developments, main trade figures, relevant labor developments, migration and the role of remittances and defines the bottlenecks for SME development in the country. The authors built their analysis on available literature and statistics as well as their own survey and interview series. The study highlights six case studies relevant for SME development selected for deeper investigation such as simplified tax schemes, online tax reporting, entrepreneurship education, agriculture and producers’ organizations, the wine industry and issues of measurement of the SME sector. Finally the report draws up potential intervention schemes for Moldovan stakeholders and provides further recommendations for longer term initiatives and actions taken for the support of economic and SME development.
Topic:
Development, Globalization, Business, Economic Growth, Macroeconomics, Innovation, and Trade
Political Geography:
Europe, Ukraine, Caucasus, Moldova, Eastern Europe, and Georgia

12. Transfer of Know-how for Small and Mid-size Businesses in Georgia, Moldova and Ukraine White Paper: Ukraine

Author:
Vladimir Dubrovskiy
Publication Date:
03-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The publication was issued within the project ‘Transfer of Know-How for Small and Mid-size Businesses in Georgia, Moldova and Ukraine’ which aims to assist SMEs in those countries by providing support to stakeholders in their efforts to develop analytical and policy advocacy capabilities and by opening new channels of communication between SMEs and NGOs in the Visegrad Four countries (Czech Republic, Hungary, Poland and Slovakia) and the rest of the European Union. The objective of the study is to deliver the complete findings and outcomes of the project aimed at Ukraine. This White Paper serves as an authoritative document with action plans, budgets, and a tangible way for the beneficiary country stakeholders to move forward with the agenda of small and medium-sized business development. It presents an overview of the collected background information and contains basic data on the countries, including some key macroeconomic comparisons as well as rankings in major competitiveness reports (e.g. Doing Business report by the International Bank for Reconstruction and Development), identifies the project stakeholders and provides an overview of the situation of small and medium-sized enterprises in Ukraine. It also includes the findings of two surveys implemented by the Slovak-Ukrainian team. Based on the findings, the “Discussion and Recommendations” section presents various perspectives on the problems of SMEs in Ukraine using the experience of the accession process of Slovakia, specific examples of key initiatives that led to the resolution of the problems, as well as case studies from various industries. It stresses the involvement of all parties including the EU, local governments, civil society, business associations, and the SMEs themselves. The key outcome of the paper is a road map – a very specific plan of actions including schedules, budgets, and other details within the scope of this project that will help the beneficiary country to cope with problems regarding the agenda of small and middle business development using the expertise and experience of institutions and stakeholders accumulated throughout the Slovak EU accession process. It includes a wide range of activities including a discussion of the project results with various Ukrainian stakeholders, workshops aimed at increasing knowledge about EU markets, legislation and standards, as well as strategic and institutional moves.
Topic:
Development, Business, Economic Growth, Macroeconomics, Innovation, and Trade
Political Geography:
Europe, Ukraine, Caucasus, Moldova, Eastern Europe, and Georgia

13. Post-privatisation Corporate Performance in Poland. Evidence from Companies Privatized in 2008-2011

Author:
Barbara Błaszczyk and Wiktor Patena
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
The study concerns the effects of Polish privatisation program conducted in the years 2008-2011. After drawing a broad picture of this process we investigate the performance of 59 privatised companies, and finally focus on a deeper analysis of three companies, which is the core part of our study. We test the hypotheses that privatisation increases a company's profitability, labour productivity, capital investment spending, plow-back ratio and leverage. In case studies, we additionally explore the effect of privatization on each company’s value. The outcomes concerning the larger group of companies are partly ambiguous (with four hypotheses confirmed and four rejected). Profitability has been not visibly improved, although a number of positive initiatives and improvements in performance occurred. By contrast, the three case studies showed a significant improvement of profitability and all other performance indicators observed, as well as a considerable increase of company value. Our results show that privatisation works, though its full effects need time to occur.
Topic:
Privatization, Financial Markets, Economy, Economic Growth, State, Innovation, and Trade
Political Geography:
Europe, Central Asia, Caucasus, Eastern Europe, and Poland

14. Corporate debt securities market in Poland: state of art, problems, and prospects for development

Author:
Agnieszka Gontarek, Piotr Kowalski, and Tomasz Gałka
Publication Date:
09-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The development of the Polish corporate bonds market resulted from changes on the supply side. When the Lehman Brothers went bankrupt, Polish entrepreneurs realized that financing their companies’ operations only with the use of credit, even if contracted from different sources, might not be the best idea. Consequently, Polish business turned to debt instruments – said Piotr Kowalski, one of the keynote speakers during the mBank - CASE Seminar no. 136. In the publication, which is an extended and authorized version of presentations delivered during the abovementioned seminar, the authors discuss various aspects of the corporate debt securities market in Poland. Piotr Kowalski gives a synthetic presentation of the subject of the analysis, Agieszka Gontarek presents selected domestic regulations and factors, and Tomasz Gałka writes about selected consequences of excessive burdens.
Topic:
Debt, Business, Economic Growth, Banks, and Trade
Political Geography:
Europe, Central Asia, Caucasus, Eastern Europe, and Poland

15. An assessment of direct and indirect liabilities of Polish banks AD 2015

Author:
Marek Radzikowski and Mieczysław Groszek
Publication Date:
08-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The present document is an attempt at a comprehensive analysis of direct and indirect burdens imposed upon banks in 2015. The idea to present such factors — which are often extremely varied in nature — in a single study was born out of the fact that these factors are often considered separately, on the basis of various criteria, which causes them to be split into different groups. This approach results in a fairly common tendency for fragmentary assessment of their impact and, more importantly, in the adoption of piecemeal regulations which fail to take into account the full impact of the actions taken in different areas. This applies in equal measures to supervisory authorities, regulators, analysts, policymakers and the media, which means that, in a somewhat oversimplified sense, the above statement is applicable to the public at large. This situation can be most succinctly characterised in the manner presented below. In the aftermath of the crisis, banks require a new set of instruments to regulate the functioning thereof. This is because they are to become more stable, safe, less risk-prone and more customer-friendly. Each of these areas requires a separate set of regulatory instruments, along with the respective subgroups thereof. Oftentimes they are not synchronised with each other and are usually aimed at the implementation of a specific, particular goal to an excessive extent. In addition, there are also “special tasks” such as the reform of the Credit and Saving Unions (SKOK).
Topic:
Finance, Economic Growth, Banks, and Trade
Political Geography:
Europe, Central Asia, Caucasus, Eastern Europe, Poland, and European Union

16. The new old choice for economic policymakers in Belarus

Author:
Alexander Chubrik
Publication Date:
04-2012
Content Type:
Policy Brief
Institution:
Center for Social and Economic Research - CASE
Abstract:
In 2011, the Belarusian ruble lost nearly 2/3 of its value. In December, the inflation rate approached 110% yoy. At the same time, the economy grew by 5.3% that year and continued with 3.6% yoy growth in January 2012. Is this a sign of economic recovery? Will it turn into sustainable growth? Or has the country exited from the crisis at all? To address these questions, CASE Fellow and Director of the IPM Research Centre in Minsk Alexander Chubrik looks at the roots of the 2011 crisis and compares them with the features of the long-lasting period of economic growth in Belarus.
Topic:
Globalization, Economic Growth, Inflation, Trade, and Economic Integration
Political Geography:
Eastern Europe and Belarus