Anderson, James, Young Lee, and Peter Murrell, 2000, “Competition and Privatization Amidst Weak Institutions: Evidence From Mongolia,” Economic Inquiry, Vol. 38, No. 4 (October), pp. 527–549.
Black, Stanley, 2001, “Obstacles to Faster Growth in Transition Economies: The Mongolian Case,” IMF Working Paper WP/01/37 (Washington, D.C.: International Monetary Fund).
Campos, Nauro and Fabrizio Coricelli, 2002, “Growth in Transition: What We Know, What We Don’t and What We Should,” Journal of Economic Literature, Vol. 60, No. 3 (September), pp. 793–836.
Djankov, Simeon, and Peter Murrell, 2002, “Enterprise Restructuring in Transition: A Quantitative Survey,” Journal of Economic Literature, Vol. 60, No. 3 (September), pp. 739–92.
Doyle, Peter, Guorong Jiang, and Louis Kuijs, 2002, “Real Convergence to EU Income Levels: Central Europe from 1990 to the Long Term,” Into the EU: Policy Frameworks in Central Europe (Washington, D.C.: International Monetary Fund).
Havrylyshyn, Oleh, 2001, “Recovery and Growth in Transition: A Decade of Evidence,” IMF Staff Papers (Special Issue), Vol 48, pp. 53–87.
Havrylyshyn, Oleh, Thomas Wolf, Julian Berengaut, Marta Castello-Branco, Ron van Rooden, and Valerie Mercer-Blackman, 1999, “Growth Experience in Transition Countries, 1990–98,” IMF Occasional Paper 184 (Washington, D.C.: International Monetary Fund).
Heytens, Paul and Harm Zebregs, 2000, “How Fast can China Grow?” People’s Republic of China: Selected Issues (Washington, D.C.: International Monetary Fund).
Iradian, Garbis, 2003, “Armenia: The Road to Sustained Rapid Growth, Cross-Country Evidence,” IMF Working Paper 03/103 (Washington, D.C.: International Monetary Fund).
Kalra, Sanjay, and Torsten Sløk, 1999, “Inflation and Growth in Transition: Are the Asian Economies Different?” IMF Working Paper 99/118 (Washington, D.C.: International Monetary Fund).
McMillan, John, and Christopher Woodruff, 2002, “The Central Role of Entrepreneurs in Transition Economies,” Journal of Economic Perspectives, Vol. 16, No. 3 (Summer), pp. 153–70.
Odling-Smee, John, 2003, Economic Performance and Trade in the CIS, presentation delivered at the International Conference dedicated to the 10th Anniversary of the National Currency of the Kyrgyz Republic, held in Bishkek on May 10, 2003.
Sarel, Michael, 1997, “Growth and Productivity in ASEAN Countries,” IMF Working Paper 97/97 (Washington, D.C.: International Monetary Fund).
Schneider, Friedrich, and Dominik H. Enste, 2000, “Shadow Economies: Size, Causes and Consequences,” Journal of Economic Literature, Vol. 38, No. 1 (March), pp. 77–114.
Senhadji, Abdelhak, 1999, “Sources of Economic Growth: An Extensive Growth Accounting Exercise,” IMF Working Paper 99/77 (Washington, D.C.: International Monetary Fund).
Sløk, Torsten, 2000, “Monetary Policy in Transition: The Case of Mongolia,” IMF Working Paper WP/00/21 (Washington, D.C.: International Monetary Fund).
Young, Alwyn, “Gold into Base Metals: Productivity Growth in the People’s Republic of China During the Reform Period,” NBER Working Paper 7856 (Cambridge, Massachusetts: National Bureau of Economic Research).
This paper originates from Chapter I of IMF Country Report No. 02/253. I would like to thank Lazaros E. Molho, David T. Coe, Jose Fajgenbaum, Byung Kyoon Jang, Kyung Hur, Roman Zytek, Francis Kumah, Yuan Xiao, Yutaka Nishigaki, and Erik Lueth for valuable comments.
For an extensive review of the literature on this issue, see IMF Staff Papers, Special Issue, Volume 48.
For a more detailed discussion of the sectoral composition of Mongolia’s growth in recent years, see Chapter II of IMF Country Report No. 02/253.
For a formal analysis of the role of monetary policy in promoting macroeconomic stabilization during Mongolia’s transition, see Sløk (2000).
For a discussion of Mongolia’s experience with public enterprise restructuring and privatization, see Chapter III of IMF Country Report No. 02/253.
The Mongolian economy depended almost exclusively on livestock herding until the early 1960s when the economy began to be industrialized with the assistance of the former Soviet Union. It is likely that most of the capital stock that existed in 1959 would have depreciated fully by 1980. In any case, changing the initial year does not materially alter the main results, as illustrated in the sensitivity analysis below. For more details on the structure of the Mongolian economy prior to the transition, see Economist Intelligence Unit (2001).
The data on total investment have been compiled by adding together construction, machinery, inventories, and other miscellaneous items.
This approach is better than simply using the GDP deflator for total investment, because price indices for construction tend to move differently from other items in the national accounts. Moreover, the quality of existing NSO estimates for the GDP deflator is weak, as elaborated in Chapter II of IMF Country Report No. 02/253.
Given the lack of data on earnings by educational status for Mongolia, the conventional measure of human capital—in which human capital is calculated by summing over the number workers with different educational levels, weighted by their earnings—is not available.
The growth experiences of East and Southeast Asian transition economies are not included in this paper’s comparisons because of their markedly different pattern of transition. While Mongolia, like the formerly socialist economies of Eastern Europe and Central Asia, embarked on its market reforms in the early 1990s as a direct or indirect consequence of the collapse of the Soviet Union, other Asian transition economies such as China and Vietnam began their transitions earlier and implemented their reforms on a much more gradual basis. For example, China began its transformation around 1979, and Vietnam introduced private enterprises and other market reforms beginning in 1986.
For a more general discussion of how initial conditions such as overindustrialization may have affected the pace of growth and recovery in transition countries, see Havrylyshyn et al. (1999) and references therein.
For a more detailed review of the possible factors that may have spurred enterprise restructuring and the formation of new enterprises in transition economies, see Djankov and Murrell (2002) and McMillan and Woodruff (2002).
The strong and positive link between openness to international trade and growth is well-documented in the economics literature. In a recent study of economic performance and trade in the CIS, Odling-Smee (2003) provides considerable evidence suggesting that the relatively low degree of openness of CIS countries has been a barrier to growth in the region.
Many studies have found that sound macroeconomic policies and structural reforms have played a critical role in promoting growth during the transition process. See, for example, Iradian (2003).