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Institutions, Human Development and Economic Growth in Transition Economies

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  • Pasquale Tridico

Abstract

The aim of this paper is to discuss whether human development was concurrent with economic growth during the transition towards a market economy in Central Eastern Europe and the former Soviet Union. The main hypothesis is that economic growth is not always concurrent with human development. Using an OLS model, human development variables were correlated with GDP per capita. The results suggest that in transition economies human development is a sufficient but not a necessary condition for economic growth. A Granger causality test confirms this finding. Therefore, investing in human development is crucial for obtaining GDP growth. However, since human development is strictly correlated with institutions, appropriate institutional policies are crucial to a development process. Dans cet article, on se demande si le développement humain va de pair avec la croissance économique dans la période de transition en Europe de l'Est et Centrale et dans l'ex-URSS. L'hypothèse principale est que la croissance économique ne contribue pas toujours au développement humain. L'utilisation d'un modèle MCO (moindres carrés ordinaires) montre que les variables de développement humain étaient corrélées avec le niveau de PIB par tête. Le résultat suggère que dans les pays en transition, le niveau de développement humain est une condition suffisante mais pas nécessaire pour la croissance économique. Un test de causalité de Granger confirme une telle relation. Il devient dès lors crucial de s'intéresser au développement humain dans une perspective de croissance économique. Cependant, si le développement humain est strictement corrélé avec les institutions, les politiques institutionnelles sont déterminantes pour le processus de développement.

Suggested Citation

  • Pasquale Tridico, 2007. "Institutions, Human Development and Economic Growth in Transition Economies," The European Journal of Development Research, Taylor and Francis Journals, vol. 19(4), pages 569-593.
  • Handle: RePEc:taf:eurjdr:v:19:y:2007:i:4:p:569-593
    DOI: 10.1080/09578810701667607
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    Cited by:

    1. Pasquale Tridico, "undated". "The Enlargement Of The European Union To Eastern Europe: Ten Years After," Working Papers 0011, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.
    2. Pasquale Tridico, 2011. "Varieties of capitalism and responses to the Financial Crisis: the European social Model versus the US Model," Departmental Working Papers of Economics - University 'Roma Tre' 0129, Department of Economics - University Roma Tre.
    3. Mariusz Próchniak & Bartosz Witkowski, 2013. "The analysis of the impact of regulatory environment on the pace of economic growth of the world countries according to the Bayesian Model Averaging," NBP Working Papers 165, Narodowy Bank Polski.
    4. Stanislav Holubec & Béla Tomka, 2023. "Human Development Index: Changes in East Central Europe, 1913-2010," Politická ekonomie, Prague University of Economics and Business, vol. 2023(2), pages 130-152.
    5. Tridico, Pasquale, 2013. "The stage of development among former communist economies: Social capital, the middle class and democracy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 47-58.
    6. Pasquale Tridico & Maria Lissowska, 2010. "Approaches, Hopes and Reality in Transition Economies," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, December.
    7. Egert Juuse & Rainer Kattel, 2014. "Financialisation and the Financial and Economic Crises: The Case of Estonia," FESSUD studies fstudy20, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    8. Audi, Marc & Poulin, Marc & Ali, Amjad, 2023. "Determinants of Human Wellbeing and its Prospect Under the Role of Financial Inclusion in South Asian Countries," MPRA Paper 120119, University Library of Munich, Germany.
    9. Pasquale Tridico, 2012. "Varieties of Capitalism and Development in Transition Economies Since the Fall of the Berlin Wall," Challenge, Taylor & Francis Journals, vol. 55(3), pages 90-128.
    10. Satoshi Mizobata & Norio Horie, 2019. "Path-Dependency of Economic Transition: An Analytical Review," KIER Working Papers 1014, Kyoto University, Institute of Economic Research.
    11. Daria Zvirgzde & Daniel Schiller & Javier Revilla Diez, 2013. "Location choices of multinational companies in Ukraine," ERSA conference papers ersa13p219, European Regional Science Association.
    12. Natalie Kauf, 2021. "Exploring the Effects of Weak Institutions on Economic Insecurity in Kosovo," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(6), pages 2063-2083, December.
    13. Egert Juuse & Rainer Kattel, 2015. "Implications of the Transformation of the State-Owned Banking System into System of Foreign-Owned Banks in New Member States for Macroeconomic and Financial Stability," Working papers wpaper103, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    14. Małachowski Aleksander & Dąbski Maciej & Wilk Waldemar, 2020. "Accessibility of public services in districts of Warsaw: a comparative study," Miscellanea Geographica. Regional Studies on Development, Sciendo, vol. 24(3), pages 176-182, July.

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