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Institution Building and Growth in Transition Economies

  • Beck, Thorsten
  • Laeven, Luc

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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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5718.

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Date of creation: Jun 2006
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Handle: RePEc:cpr:ceprdp:5718
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