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Which Membership Matters? External vs. Internal Determinants of Institutional Change in Transition Countries

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Author Info
Thorsten Drautzburg
Inna Melnykovska
Rainer Schweickert
Abstract

This paper analyses potential internal and external determinants of institutional change as measured by the World Bank Governance Indicators (WBGI) based on a panel of 25 transition countries for the period from 1996 to 2005. We show that natural resources and capital inflows exert an insignificant or negative influence and that economic policy allows to break path-dependency. Most importantly, however, we are able to show that incentives provided by NATO membership are important for institutional development and even more robust than variables measuring the integration into the EU. This allows for some optimism about the effectiveness of ENP policies and supports the argument that NATO, offering regional security, may provide significant additional incentives for good governance

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File URL: http://www.ifw-members.ifw-kiel.de/publications/which-membership-matters-external-vs-internal-determinants-of-institutional-change-in-transition-countries/kwp%201421.pdf
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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1421.

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Length: 27 pages
Date of creation: May 2008
Date of revision:
Handle: RePEc:kie:kieliw:1421

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Related research
Keywords: EU NATO Transition Economies Institutional Change Governance

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Find related papers by JEL classification:
F15 - International Economics - - Trade - - - Economic Integration
F20 - International Economics - - International Factor Movements and International Business - - - General
F50 - International Economics - - International Relations and International Political Economy - - - General
P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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    Other versions:
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  7. Arvind Subramanian & Xavier Sala-i-Martin, 2003. "Addressing the Natural Resource Curse: An Illustration from Nigeria," IMF Working Papers 03/139, International Monetary Fund. [Downloadable!]
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  8. Martin Paldam & Erich Gundlach, 2008. "Two Views on Institutions and Development: The Grand Transition vs the Primacy of Institutions," Kyklos, Blackwell Publishing, vol. 61(1), pages 65-100, 02. [Downloadable!] (restricted)
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  14. Stijn Claessens & Danny Cassimon & Bjorn Van Camperhout, 2007. "Empirical Evidence on the New International Aid Architecture," IMF Working Papers 07/277, International Monetary Fund. [Downloadable!]
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  15. Aaron Tornell, 1998. "Reform from Within," NBER Working Papers 6497, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. Raghuram Rajan & Arvind Subramanian, 2007. "Does Aid Affect Governance?," American Economic Review, American Economic Association, vol. 97(2), pages 322-327, May.
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