Mr. Norbert Funke, Asel Isakova, and Maksym Ivanyna
Using data from the World Economic Forum’s Global Competitiveness Report as an example, this paper compares structural indicators for 25 countries in Emerging Europe, the Caucasus, and Central Asia with a generic country with similar charactersitics that is 40 percent richer as well as a country with the average EU income. This comparison suggests that improvements will be particularly crucial in the areas of institutions, financial market development, infrastructure, goods and labor market efficiency and areas related to innovation. For the generally more ambitious goal of reaching average EU income, the reform needs are correspondingly larger. The methodology focuses on (approximate) comparisons between countries and does not try to establish the link between structural reforms and growth. While we test for changes in empirical specifications, caveats relate to the quality of structural indicators, possible non-linearities, and reform complementarities. The approach can be applied to other indicators and at a more granular level.
This supplement provides background information on various aspects of capacity development (CD) for the main Board paper, The Fund’s Capacity Development Strategy—Better Policies through Stronger Institutions. It is divided into nine notes or sections, each focused on a different topic covered in the main paper. Section A explores the importance of institutions for growth, and the role the Fund can play in building institutions. Section B presents stylized facts about how the landscape for CD has changed since the late 1990s. Section C discusses the difficulties of analyzing CD data because of measurement issues. Section D provides a longer-term perspective on how Fund CD has responded to member needs. Section E contains information on previous efforts to prioritize CD, assesses Regional Strategy Notes (RSNs) and country pages, and suggests ways to strengthen RSNs, including by using the Fund’s surveillance products. Section F compares the technical assistance (TA) funding model proposed in the 2011
The progress made by Moldova toward achieving the Millennium Development Goals (MDGs) has not been uniform since 2007. Domestic economic and political crises are likely to undermine the achievement of several MDG targets set for 2010 and 2015. The goals were to reduce extreme poverty and hunger, achieve universal access to general secondary education, promote gender equality and empower woman, and so on. After growing dramatically in 1998–1999, poverty in Moldova began to decline in 2000. Addressing the environmental challenges and risks is imperative for Moldova.
This paper provides empirical evidence on the determinants of individual reform preferences in Russia after the August 1998 crisis. We analyze the response pattern to survey questions about the individual’s support of returning to socialism and stopping market reforms in a bivariate probit framework. Two possible explanations for the observed preferences are considered. First, personal attitudes toward reform are affected by the individuals‘ economic gains or losses during transition. Second, as established by research in sociology, some societal groups are more flexible than others in adapting to changes in their environment. The empirical results, which focus on the effect of age, education, labor market status, income levels and income changes on the likelihood of opposing reform, give support to both hypotheses. Interestingly, we also find a strong regional variation in reform attitudes. Controlling for individual characteristics, we establish that people who live in high-arrears regions are more likely to oppose the reform process. Furthermore, the regional income level, ethnic composition, oil production and crime rate are significantly related to the market reform orientation of the regions’ residents.