Lessons from transition economies.pptx

8/10/2019 Lessons from transition economies.pptx

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TRANSITION

ECONOMIES:PUTTING THE SUCCESS STORIES

THE POST-COMMUNIST WORLD INA BROADER PERSPECTIVE.

SYNTHESIS IS UNDER THE THEME :

GOVERNMENT CAPACITY UNDER TRANSITI


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Order of presentation

Popovs main arguments

Hypothetical optimal trajectory

GDP of some transition economies

The case of China

Lessons for Ghana

Conclusion


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Main arguments of Popo

Seeks to debunk our fixation onParticular economic regimes and

Particular political regimes

as the surest way to economic development. Thbecause;

optimal policies are context dependent,

they depend on each countrys previous histor


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Fixation On Economic Regimes

radical economic liberalization (the stherapy) or

Industrial policy and protectionism

Fixation on Political Regimes

Democratic

Non-democratic


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Hypothetical Optimal Trajectory

Source: Adapted from Popov

2013

East Asia Cuba Communist

Countries

before the

1990s

Optimal

Combination of

State and

Market

Sub-Saharan

Africa

Most countries

in Latin America

South

Market-led ecoState-led economies


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GDP of transition economies in 2006 apercentage of 1989

Source: EBRD (Transition Report, various years) cited in Popov


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Central and Eastern Europe

Removal of subsidies

Strategic role of foreign investors eg banking s

Europeanisation


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Centrally planned and

undemocratic countries

Liberalized

democratic coTurkmenistan Poland

Cuba Latin Ameri

Uzbekistan Georgia

Belarus Kyrgyzstan

Azerbaijan Ukraine

China

Tajikistan

Kazakhstan Russia

Vietnam Moldova

Mongolia

Armenia

Source: Popov (2013)

i GDP it th i


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comparing GDP per capita growth in and Latin America

Source: World Bank(2007) cited in Popov (2009)


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The case of China

It was a Third World Country in the 19

Contributions of Chairman Mao(18931976)

Today it combines free market with

absence of multi-party democracy (HKong riots as an example)

Said to have overtaken the US econo

or will do so in the next few years.


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Lessons for GhanaNkrumahs regime was basically a centrally pla

democracy

After his departure came successive governmthat kowtowed to the dictates of IMF and other

Western Countries by;

implementing radical economic liberalization (shoc

therapy) (e.g. SAP) (IEA, 2006)Need for;

strong institutions (state capacity) as mentioned bPresident Obama

Properly developed human capital


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Developing countries should not embaon market friendly policies/reforms, ev

these reforms proved to be beneficial i

advanced countries because;

optimal policies are context dependendiffer at various stages of developmen

dexterity of a policymaker is to shift th

at the appropriate time Popov, (2013:

Conclusion


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Thank you


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Reference List

Fosu, A.K. (2013): Development Success: Historical Accounts from More Advanced CountrieOxford University Press.

Institute of Economic Affairs (2006). Determinants of Economic Growth in Ghana. Accra, Gha

Popov, Vladimir (2009) : Lessons from the transition economies: Putting the success stories postcommunist world into a broader perspective, Research paper / UNUWIDER, No. 2009.1

92-9230-184-2

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Lessons from transition economies.pptx