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Institution Building and Growth in Transition Economies

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  • Laeven, Luc
  • Beck, Thorsten

Abstract

Drawing on the recent literature on economic institutions and the origins of economic development, we offer a political economy explanation of why institution building has varied so much across transition economies. We identify dependence on natural resources and the historical experience of these countries during socialism as major determinants of institution building during transition. Using natural resource reliance and the years under socialism to extract the exogenous component of institution building, we also show the importance of institutions in explaining the variation in economic development and growth across transition economies during the first decade of transition.

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  • Laeven, Luc & Beck, Thorsten, 2006. "Institution Building and Growth in Transition Economies," CEPR Discussion Papers 5718, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:5718
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    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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