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The Business Environment in the Transition

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  • Wendy Carlin
  • Mark Schaffer

Abstract

Following the collapse of planning, new small and medium-sized firms rapidly emerged in all transition economies. Using firm level data, we investigate the interaction between the widespread opportunities for new business activities such firms faced and their business environment. The business environment includes physical infrastructure, the availability of an educated labour force, provision of administrative and judicial services, the control of corruption and crime, and the stability of the macroeconomic environment. By comparing how different elements of the business environment affected firms in formerly planned economies with those in economies outside transition, we document not only the challenges faced by transition firms but also the effects of the planning legacy.

Suggested Citation

  • Wendy Carlin & Mark Schaffer, 2012. "The Business Environment in the Transition," CESifo Working Paper Series 3934, CESifo.
    • Handle: RePEc:ces:ceswps:_3934
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    References listed on IDEAS

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    1. Carlin, Wendy & Schaffer, Mark & Seabright, Paul, 2013. "Soviet power plus electrification: What is the long-run legacy of communism?," Explorations in Economic History, Elsevier, vol. 50(1), pages 116-147.
    2. Pradeep Mitra & Marcelo Selowsky & Juan Zalduendo, 2010. "Turmoil at Twenty : Recession, Recovery, and Reform in Central and Eastern Europe and the Former Soviet Union," World Bank Publications - Books, The World Bank Group, number 2682, December.
    3. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    4. Gérard Roland, 2004. "Transition and Economics: Politics, Markets, and Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 026268148x, December.
    5. Seabright, Paul & Schaffer, Mark & Carlin, Wendy, 2010. "A Framework for Cross-Country Comparisons of Public Infrastructure Constraints on Firm Growth," CEPR Discussion Papers 7662, C.E.P.R. Discussion Papers.
    6. Jan Svejnar, 2002. "Transition Economies: Performance and Challenges," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 3-28, Winter.
    7. Simon Commander & Zlatko Nikoloski, 2011. "Institutions and Economic Performance: What Can be Explained?," Review of Economics and Institutions, Università di Perugia, vol. 2(2).
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    Cited by:

    1. Carlin, Wendy & Schaffer, Mark, 2012. "Understanding the business environment in South Asia : evidence from firm-level surveys," Policy Research Working Paper Series 6160, The World Bank.

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    More about this item

    Keywords

    infrastructure; human capital; institutions; planned economy; transition; business environment;
    All these keywords.

    JEL classification:

    • D29 - Microeconomics - - Production and Organizations - - - Other
    • H49 - Public Economics - - Publicly Provided Goods - - - Other
    • M29 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Other
    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform

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