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The Eurasian Growth Paradox


  • Anders Åslund

    () (Peterson Institute for International Economics)

  • Nazgul Jenish

    (University of Maryland)


In the first decade of postcommunist transition, multiple growth regressions showed that the more radical and comprehensive market economic reform was, the earlier a country returned to economic growth and the more vigorous its growth, and that Central Europe took the lead. Since 2000, however, the Commonweath of Independent States (CIS) countries have had more than 4 percentage points higher annual growth than the Central European countries. A regression analysis for 20 postcommunist countries shows, with strong significance, that reducing public expenditures has most effectively stimulated economic growth. As expected, oil exports are also positive and significant. The distance from the European Union is also positive and significant: that is, the further from the European Union, the higher the economic growth. The effect of corruption is negative for growth but only marginally significant. Neither the laggard effect nor investment reveals any significant effect. The conclusion is that at least among postcommunist countries more emphasis should be given to reducing public expenditures to boost economic growth.

Suggested Citation

  • Anders Åslund & Nazgul Jenish, 2006. "The Eurasian Growth Paradox," Working Paper Series WP06-5, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp06-5

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    References listed on IDEAS

    1. Jean Pisani-Ferry & André Sapir & Guntram B. Wolff, . "An evaluation of IMF surveillance of the euro area," Blueprints, Bruegel, number 629, August.
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    5. C. Fred Bergsten, 1997. "Open Regionalism," The World Economy, Wiley Blackwell, vol. 20(5), pages 545-565, August.
    6. McKay Julie & Volz Ulrich & Wölfinger Regine, 2011. "Regional Financing Arrangements and the Stability of the International Monetary System," Journal of Globalization and Development, De Gruyter, vol. 2(1), pages 1-33, August.
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    Cited by:

    1. Julija MICHAILOVA, 2009. "Gender, Corruption And Sustainable Growth In Transition Countries," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(3(9)_Fall).
    2. Ekaterina Zhuravskaya, 2007. "Whither Russia? A Review of Andrei Shleifer's A Normal Country," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 127-146, March.

    More about this item


    economic systems; transition; economic growth; public sector economy; oil;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
    • P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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