Capital flows to Central and Eastern Europe and the Former Soviet Union
The capital flows to Central and Eastern Europe and the Former Soviet Union (CEE/FSU) represent a relatively small, albeit growing share of capital flows to developing countries. Taking all flows together, the total net flows to these 25 countries (Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Macedonia, Moldova, Poland, Romania, Russia, Slovakia, Slovenia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan) were about $44 billion in 1996 or about 1/8 of aggregate net flows to all developing countries. These countries accounted, however, for about 20 and 22 percent respectively of all developing countries Gross Domestic Product (GDP) and exports in 1996. As a fraction of their GDP, total inflows were consequently smaller than for many other developing countries, and averaged about 5.4 percent over the 1990-96 periods. In more recent years, there has been a more rapid inflow of private capital, as reform efforts have consolidated and economic prospects improved and, for some countries, as European Union (EU) integration became a possibility for the near future. For some countries, short-term capital has recently become an important source of external financing. Since most countries have been late comers to the phenomenon of large private capital inflows, they have not experienced much of the overheating phenomena which have affected other developing countries in the past (Latin America) and recently (East Asia). The paper is organized as follows. Section IIbriefly describes the facts on capital flows to these countries. Section III discusses important links and relationships between macroeconomic variables and the capital flows, including some of the basic motivations, and causes for capital flows. Section IV describes and analyzes the policy framework and policy responses in those countries that received the bulk of capital flows. Econometric tests are presented in section V, while section VI discusses the issues which may be arising with capital flows in these countries in the future and provides some conclusions.
|Date of creation:||30 Sep 1998|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Taylor, Mark P & Sarno, Lucio, 1997. "Capital Flows to Developing Countries: Long- and Short-Term Determinants," World Bank Economic Review, World Bank Group, vol. 11(3), pages 451-70, September.
- De Melo, Martha & Denizer, Cevdet, 1997. "Monetary policy during transition : an overview," Policy Research Working Paper Series 1706, The World Bank.
- Leonardo Leiderman & Carmen Reinhart & Guillermo Calvo, 1992.
"Capital Inflows and Real Exchange Rate Appreciation in Latin America; The Role of External Factors,"
IMF Working Papers
92/62, International Monetary Fund.
- Guillermo A. Calvo & Leonardo Leiderman & Carmen M. Reinhart, 1993. "Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors," IMF Staff Papers, Palgrave Macmillan, vol. 40(1), pages 108-151, March.
- Reinhart, Carmen & Calvo, Guillermo & Leiderman, Leonardo, 1993. "“Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors," MPRA Paper 7125, University Library of Munich, Germany.
- de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "Patterns of Transition from Plan to Market," World Bank Economic Review, World Bank Group, vol. 10(3), pages 397-424, September.
- Cohen, Daniel, 1993. "Low Investment and Large LDC Debt in the 1980's," American Economic Review, American Economic Association, vol. 83(3), pages 437-49, June.
- Chuhan, Punam & Claessens, Stijn & Mamingi, Nlandu, 1998. "Equity and bond flows to Latin America and Asia: the role of global and country factors," Journal of Development Economics, Elsevier, vol. 55(2), pages 439-463, April.
- Dorothy M. Sobol, 1996. "Central and Eastern Europe: financial markets and private capital flows," Research Paper 9626, Federal Reserve Bank of New York.
- Easterly, William & da Cunha, Paulo Viera & DEC, 1994. "Financing the storm : macroeconomic crisis in Russia, 1992-93," Policy Research Working Paper Series 1240, The World Bank.
- Reinhart, Carmen & Montiel, Peter, 2001. "The Dynamics of Capital Movements to Emerging Economies During the 1990s," MPRA Paper 7577, University Library of Munich, Germany.
- Selowsky, Marcelo & Martin, Ricardo, 1997. "Policy Performance and Output Growth in the Transition Economies," American Economic Review, American Economic Association, vol. 87(2), pages 349-53, May.
- Stijn Claessens & R. Kyle Peters, 1997. "State enterprise performance and soft budget constraints: The case of Bulgaria," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(2), pages 305-322, November.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1976. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.