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Market-Oriented Structural Reforms and Human Development: Evidence from Transition Economies

Market based reforms are expected to result in both higher economic growth and development. This paper studies the impact of reform of economic institutions and infrastructure sectors on the economic, educational and health dimension of human well- being among 25 transition economies. We use a panel data for the 1992-2007 periods and the LSDVC technique to analyse the effects of market-driven reforms on the Human Development Index (HDI) and reform packages using EBRD transition indicators. The results show that institutional economic reforms led to positive economic effect and significant impacts on other dimensions of human development. On the other hand, we find limited positive impact from infrastructure sectors reforms. However, not every aspect of reforms appear to generate positive impacts as the transition process is rather complex. For example, large scale privatizations seem to have had negative effects in health and economic outcomes. The results point towards the importance of the interaction among and the combined effect of different reform measures.

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Paper provided by School of Economics, University of Queensland, Australia in its series Discussion Papers Series with number 493.

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Date of creation: 23 Oct 2013
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Handle: RePEc:qld:uq2004:493
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  1. Pollitt, Michael, 2009. "Evaluating the evidence on electricity reform: Lessons for the South East Europe (SEE) market," Utilities Policy, Elsevier, vol. 17(1), pages 13-23, March.
  2. Peter C.B. Phillips & Donggyu Sul, 2004. "Bias in Dynamic Panel Estimation with Fixed Effects, Incidental Trends and Cross Section Dependence," Yale School of Management Working Papers ysm428, Yale School of Management.
  3. Macedo, Jorge Braga de & Martins, Joaquim Oliveira, 2006. "Growth, Reform indicators and Policy complementarities," FEUNL Working Paper Series wp484, Universidade Nova de Lisboa, Faculdade de Economia.
  4. Aghion, Philippe & Schankerman, Mark, 1999. "Competition, Entry, and the Social Returns to Infrastructure in Transition Economies," CEPR Discussion Papers 2052, C.E.P.R. Discussion Papers.
  5. Staehr, Karsten, 2003. "Reforms and economic growth in transition economies: Complementarity, sequencing and speed," BOFIT Discussion Papers 1/2003, Bank of Finland, Institute for Economies in Transition.
  6. Nepal, R. & Jamasb, T., 2011. "Reforming the Power Sector in Transition: Do Institutions Matter?," Cambridge Working Papers in Economics 1125, Faculty of Economics, University of Cambridge.
  7. Oleh Havrylyshyn, 2001. "Recovery and Growth in Transition: A Decade of Evidence," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 4.
  8. Azim Raimbaev, 2011. "The case of transition economies: what institutions matter for growth?," EERI Research Paper Series EERI_RP_2011_16, Economics and Econometrics Research Institute (EERI), Brussels.
  9. Philippe Aghion & Mark Schankerman, 1999. "Competition, entry and the social returns to infrastructure in transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(1), pages 79-101, March.
  10. Flabbi, Luca & Paternostro, Stefano & Tiongson, Erwin R., 2008. "Returns to education in the economic transition: A systematic assessment using comparable data," Economics of Education Review, Elsevier, vol. 27(6), pages 724-740, December.
  11. Giovanni S.F. Bruno, 2005. "Estimation and inference in dynamic unbalanced panel data models with a small number of individuals," KITeS Working Papers 165, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jun 2005.
  12. Braumoeller, Bear F., 2004. "Hypothesis Testing and Multiplicative Interaction Terms," International Organization, Cambridge University Press, vol. 58(04), pages 807-820, October.
  13. William Tompson, 2007. "Healthcare Reform in Russia: Problems and Prospects," OECD Economics Department Working Papers 538, OECD Publishing.
  14. Azim Raimbaev, 2011. "The case of transition economies: what institutions matter for growth?," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 54(2), pages 1-33.
  15. Falcetti, Elisabetta & Lysenko, Tatiana & Sanfey, Peter, 2006. "Reforms and growth in transition: Re-examining the evidence," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 421-445, September.
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