nep-tra New Economics Papers
on Transition Economics
Issue of 2025–03–03
23 papers chosen by
Maksym Obrizan, Kyiv School of Economics


  1. Agriculture in interwar Poland: development in a turbulent time By Maciej Bukowski; Michał Kowalski; Marcin Wroński
  2. Does Public Opinion on Foreign Policy Affect Elite Preferences? Evidence from the 2022 US Sanctions against Russia By Peez, Anton; Bethke, Felix S.
  3. A New Approach to Understanding Population Change in Central and Eastern Europe By Tóth, Csaba G.
  4. The Economic Growth and Regional Convergence in Interwar Poland: Detailed Historical National Accounts By Maciej Bukowski; Michał Kowalski; Marcin Wroński
  5. Left-behind regions in Poland, Germany, Czechia : classification and electoral implications By Bernard, Josef; Refisch, Martin; Grzelak, Anna; Bański, Jerzy; Deppisch, Larissa; Konopski, Michał; Kostelecký, Tomáš; Kowalski, Mariusz; Klärner, Andreas
  6. Leadership and corporate social responsibility: Attitude of managers towards psychosocial aspects By Tomas Dania; Helena Chladkova; Renata Kucerova; Radovan Kozisek; Renata Skypalova
  7. Why Did Support for Climate Policies Decline in Europe and Central Asia? By Alexandru Cojocaru; Michael M. Lokshin; Ivan Torre
  8. Using Satellite Imagery and a Farmer Registry to Assess Agricultural Support in Conflict Settings : The Case of the Producer Support Grant Program in Ukraine By Klaus W. Deininger; Daniel Ayalew Ali
  9. Imputing Poverty Indicators without Consumption Data : An Exploratory Analysis By Hai-Anh H. Dang; Talip Kilic; Ksenia Abanokova; Gero Carletto
  10. Incentivising, excluding, and enduring: The policy dynamics of quantitative research assessment in Lithuania By Dagiene, Eleonora; Larivière, Vincent; Dix, Guus; Waltman, Ludo
  11. Conceptualizing and Measuring Energy Poverty in Bulgaria By Robayo, Monica; Rude, Britta Laurin
  12. Green Is Less Greedy : Competition, Corruption, and Productivity in Green Public Procurement in Bulgaria By Poltoratskaia, Viktoriia; Quintero, Maria Fernanda; Fazekas, Mihaly; Marc Tobias Schiffbauer
  13. Connectivity, Road Quality, and Jobs : Evidence from Armenia By Pkhikidze, Nino
  14. Simulating Aggregate and Distributional Effects of Minimum Wage Increases in Romania : Evidence from Survey and Administrative Tax Data By Monica Robayo; Zamfir, Madalina; Wronski, Marcin
  15. Micro-Level Impacts of the War on Ukraine’s Agriculture Sector : Distinguishing Local and National Effects over Time By Klaus W. Deininger; Daniel Ayalew Ali; Kussul, Nataliia; Lemoine, Guido; Shelestov, Andrii
  16. Statistically Matching Income and Consumption Data : An Evaluation of Energy and Income Poverty in Romania By Britta Laurin Rude; Monica Robayo
  17. Reforming Land Valuation and Taxation in Ukraine : A Path towards greater Sustainability Fairness, and Transparency By Klaus W. Deininger; Daniel Ayalew Ali; Eduard Bukin; Martyn, Andrii
  18. Should Bulgaria wait for 90% real convergence before joining the Eurozone? By Ganev, Georgy
  19. A Comparative Analysis of Financial Sector Reforms and Policies in Countries Exiting Fragility By Calice, Pietro; Demekas, Dimitri G.
  20. Export and Labor Market Outcomes : A Supply Chain Perspective — Evidence from Viet Nam By Kokas, Deeksha; Gladys Lopez-Acevedo; Vu, Ha
  21. Tax Compliance in Romania By Monica Robayo; Balaban, Georgiana; Wronski, Marcin
  22. Know Thy Foe : Information Provision and Air Pollution in Tbilisi By Baquie, Sandra; Behrer, Arnold Patrick; Du, Xinming; Fuchs Tarlovsky, Alan; Nozaki, Natsuko Kiso
  23. Moral Hazard among the Employed: Evidence from Regression Discontinuity By Jonas Jessen; Robin Jessen; Andrew C. Johnston; Ewa Gałecka-Burdziak

  1. By: Maciej Bukowski (University of Warsaw, Faculty of Economic Sciences); Michał Kowalski (University of Warsaw, Faculty of Economic Sciences); Marcin Wroński (Warsaw School of Economics, Collegium of World Economy, Minda de Gunzburg Center for European Studies)
    Abstract: We measure the value added in agriculture in Poland during the interwar period. Our calculation is based on the bottom-up methodology. We provide estimates on the national and regional levels. Cultivated area, yields and yields per hectare increased during the investigated period. Significant regional convergence, both in the case of prices and value added occurred. In the years 1924 -38 value added increased by 5.35% annually, resulting 4.01% per capita growth rate. However, the yields per hectare grew less than in a majority of other European economies. While less developed eastern regions caught up with more economically advanced western Poland, the leading west lost compared to European peers. Therefore, our assessment of the development of agriculture in Poland in that period remains mixed.
    Keywords: agriculture, national income, Poland, Central and Eastern Europe, economic growth, regional convergence
    JEL: N50 N54 N90 N94
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:war:wpaper:2025-02
  2. By: Peez, Anton (Goethe University Frankfurt); Bethke, Felix S.
    Abstract: Does public opinion on international affairs affect elites’ policy preferences? Most research assumes that it does, but this key assumption is difficult to test empirically given limited research access to elite decisionmakers. We examine elite responsiveness to public opinion on sanctioning Russia during the 2022 Russian invasion of Ukraine. We fielded a pre-registered experiment within the 2022 TRIP survey of US foreign policy practitioners, offering a rare opportunity for a fairly large elite survey experiment (N = 253). We used contemporary public polling highly supportive of increasing sanctions as an information treatment. Our research design, involving a salient issue and real-world treatment, substantially expands on previous work. Exposure to the treatment raises elite support for increasing sanctions from 68.0% to 76.3% (+8.3 pp.). While meaningful, this effect is smaller than those identified elsewhere. We argue that this difference is driven by pre-treatment dynamics related to issue salience and ceiling effects, and is therefore all the more notable. We provide evidence for substantial treatment effect heterogeneity depending on subject-matter expertise, degree of involvement in political decision-making, and gender, but not party identification. While our results support previous research, they highlight issues of external validity and the context-dependence of elite responsiveness.
    Date: 2024–12–19
    URL: https://d.repec.org/n?u=RePEc:osf:socarx:qzrj2_v1
  3. By: Tóth, Csaba G.
    Abstract: This study introduces a novel approach to decomposing population change by identifying the separate contributions of fertility, mortality, net migration, and initial age structure using stable population theory. Its strength lies in the additivity of the results: the contributions of these factors, along with the interaction effect, sum to equal the total population change. In addition, identifying the direct impact of initial age structure on population change offers new insights into the drivers of population dynamics. Central and Eastern Europe was one of the regions hit most by population decline between 1990 and 2020; however, it was marked by significant variation across countries. By decomposing population change, we found that the positive impact of the relatively young initial age structure in the CEE region was as large as the population-reducing effect of negative net migration, while the positive impact of mortality improvement offset one-third of the population-reducing effect of low fertility. On the other hand, the initial age structure had a crucial role in explaining differences in country-level population change during the study period.
    Date: 2025–01–28
    URL: https://d.repec.org/n?u=RePEc:osf:socarx:3qn82_v1
  4. By: Maciej Bukowski (University of Warsaw, Faculty of Economic Sciences); Michał Kowalski (University of Warsaw, Faculty of Economic Sciences); Marcin Wroński (Warsaw School of Economics, Collegium of World Economy, Minda de Gunzburg Center for European Studies)
    Abstract: We provide the first estimate of the Polish national, regional and sectoral GDP in the interwar period. We find that the Polish economy's performance in the interwar period was much better than it was assumed before. In the years 1924 – 1938, the real GDP per capita increased by almost 40% or by 2.3% annually. As economic growth was stronger in the poorer regions significant regional convergence was achieved. Our results challenge the dominant narrative about the weak performance of the Polish economy in the interwar years.
    Keywords: economic history, Poland, Great Depression, regional convergence, economic growth
    JEL: N10 N14 N90 N94
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:war:wpaper:2025-03
  5. By: Bernard, Josef; Refisch, Martin; Grzelak, Anna; Bański, Jerzy; Deppisch, Larissa; Konopski, Michał; Kostelecký, Tomáš; Kowalski, Mariusz; Klärner, Andreas
    Abstract: Recently, the notion of left-behind places and regions has gained ground in academic debates on regional inequality and changing electoral landscapes. This paper proposes an approach to conceptualising and measuring regional “left-behindness” in three Central Eastern European countries that goes beyond a dichotomous division of regions into “left-behind” versus “not left-behind”. It understands left-behindness as a multi-dimensional continuum, representing regional disparities in living standards and socio-economic opportunities. Our understanding of left-behind plades is based to a large extent on the current economic conditions of the regions and their dynamics, but goes beyond them to include a wider range of socially relevant aspects of the living conditions, including educational attainment, poverty, and the attractiveness of places to live. The paper proposes an approach to measuring regional left-behindness and explores how it explains voting patterns. Thus, the paper is motivated by the seminal arguments of the 'geography of discontent' debate. Its proponents have argued that rising support for populist, right-wing nationalist-conservative and anti-system parties is often closely linked to spatial patterns of regional inequality. This argument has been repeatedly tested in Western European countries, but has remained under-researched in Central Eastern Europe. Using our approach, we were able to confirm the validity of the "geography of discontent" as a central thesis for all three countries studied. The novelty and added value of this study is that it extends the understanding of left-behindness and voting. Our multidimensional approach to left-behindness allows for a comprehensive interpretation of spatial patterns of populist voting in Central Eastern Europe. The relationship between regional left-behindness and voting behaviour varies in strength across different countries. In Czechia, there are strong associations for the parties ANO and SPD, but not for the KSČM. In eastern Germany, the association between left-behindness and support for the AfD is weaker, as is the case in Poland for the PiS. Another contribution of the multidimensional concept of left-behindness is the finding that different dimensions of left-behindness have different electoral effects. There appears to be a systematic influence of economic prosperity and relative expansion, which primarily captures the contrast between metropolitan areas and their hinterlands on the one hand, versus the rest of the country on the other—not only in terms of economic prosperity and relative expansion, but also in terms of a significant social status hierarchy. Poverty, however, shows a less stable relationship.
    Keywords: Community/Rural/Urban Development
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:ags:jhimwp:350171
  6. By: Tomas Dania (Department of Management, Faculty of Business and Economics, Mendel University in Brno, Czech Republic); Helena Chladkova (Department of Management, Faculty of Business and Economics, Mendel University in Brno, Czech Republic); Renata Kucerova (Department of Management, Faculty of Business and Economics, Mendel University in Brno, Czech Republic); Radovan Kozisek (Department of Management, Faculty of Business and Economics, Mendel University in Brno, Czech Republic); Renata Skypalova (Department of Management and Human Resources, Ambis College, Prague, Czech Republic)
    Abstract: Under the current dynamic times, business leaders are exploring ways to maintain a long-term competitive advantage. An option is to focus on a stable corporate environment and retain reliable and highly motivated employees. Therefore, there is a growing interest in examining social factors in enterprises. Possible approach that can influence social factors in enterprises is corporate social responsibility (CSR). This study seeks to examine the relationship between CSR and social factors with respect to the social capital of particular enterprises. The aim of the study is also to find out whether the implemented concept of CSR has an impact on managers' attitudes towards employees. The study was conducted among 91 service enterprises in the Czech Republic. Subsequent t-tests and correlation analyses show statistically significant differences between managers of enterprises implementing the CSR concept and those not doing it. Managers of enterprises working with the CSR concept tend to be more open towards their employees, give them time, listen to them and try to support them. It has also been shown that enterprises applying CSR have by 3.85% lower fluctuation rate than enterprises that do not apply CSR. Our research shows that managers of enterprises applying the CSR concepts strengthen teamwork among their employees and thus build the social capital within their enterprises.
    Keywords: Corporate Social responsibility, Leadership, Social factors, Social capital
    JEL: J24 M14
    Date: 2025–01
    URL: https://d.repec.org/n?u=RePEc:men:wpaper:98_2025
  7. By: Alexandru Cojocaru; Michael M. Lokshin; Ivan Torre
    Abstract: This paper investigates trends in willingness to pay higher taxes to combat climate change in countries of Eastern and Central Europe and Central Asia between 2016 and 2023. Using data from the Life in Transition Survey, it shows that despite increasing attention from policy makers, scientists, and the media, the average shares of respondents willing to pay to combat climate change declined over this period. The paper tests several hypotheses that could explain the deterioration of public readiness to support climate change policies. The most likely explanation is the growing politicization of the climate change agenda in the region.
    Date: 2024–09–17
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10914
  8. By: Klaus W. Deininger; Daniel Ayalew Ali
    Abstract: While cash transfers have emerged as an attractive option to minimize negative long-term impacts of conflict, the scope for targeting and assessing their impact in such settings is often challenging. This paper shows how a digital farmer registry in Ukraine (the State Agrarian Register) helped to target and evaluate such a program, using the country’s $50 million Producer Support Grant in a way that largely avoided mis-targeting. The analysis applies a difference-in-differences design with panel data from 2019–23 on crop cover at the parcel/farm level for the universe of eligible farmers registered in the State Agrarian Register. The findings suggest that the program significantly increased area cultivated, although the effect size remained modest. Impacts were most pronounced near the frontline and for the smallest farmers. The paper discusses the implications in terms of a more diversified menu of support options and the scope of using the State Agrarian Register to help to implement these options, as well as lessons beyond Ukraine.
    Date: 2024–09–17
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10912
  9. By: Hai-Anh H. Dang; Talip Kilic; Ksenia Abanokova; Gero Carletto
    Abstract: Accurate poverty measurement relies on household consumption data, but such data are often inadequate, outdated, or display inconsistencies over time in poorer countries. To address these data challenges, this paper employs survey-to-survey imputation to produce estimates for several poverty indicators, including headcount poverty, extreme poverty, poverty gap, near-poverty rates, as well as mean consumption levels and the entire consumption distribution. Analysis of 22 multi-topic household surveys conducted over the past decade in Bangladesh, Ethiopia, Malawi, Nigeria, Tanzania, and Viet Nam yields encouraging results. Adding household utility expenditures or food expenditures to basic imputation models with household-level demographic, employment, and asset variables could improve the probability of imputation accuracy by 0.1 to 0.4. Adding predictors from geospatial data could further increase imputation accuracy. The analysis also shows that a larger time interval between surveys is associated with a lower probability of predicting some poverty indicators, and that a better imputation model goodness-of-fit (R2) does not necessarily help. The results offer cost-saving inputs for future survey design.
    Date: 2024–08–14
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10867
  10. By: Dagiene, Eleonora (Mykolas Romeris University); Larivière, Vincent; Dix, Guus; Waltman, Ludo
    Abstract: Performance-based funding systems have significantly impacted the research systems in many countries. This study examines the evolution of the performance-based funding system in Lithuania. Using a multi-level, multi-actor, and multi-issue approach, we investigate how various actors influenced policy choices and outcomes. Through a combination of policy analysis, interviews, and bibliometric analysis, we explore tensions between international aspirations and domestic realities, the interplay between national policies and publishing behaviour, and challenges of metrics-based research assessment. Our findings reveal how the dominant role of scientific elites at all levels of governance had both intended outcomes (increase in publications in general and international publications in particular) and unintended consequences (proliferation of institutional journals and strategic publishing practices). Our study provides insights for policymakers and stakeholders seeking to develop effective and sustainable policies amidst calls for research assessment reform.
    Date: 2024–09–01
    URL: https://d.repec.org/n?u=RePEc:osf:socarx:9yq38_v1
  11. By: Robayo, Monica; Rude, Britta Laurin
    Abstract: Addressing energy poverty has emerged as one of the main challenges for Bulgaria's poverty and social inclusion policy, particularly in the context of the European Green Deal and the current crisis in Ukraine. To tackle the adverse impacts of energy poverty effectively, a crucial initial step involves accurately defining and measuring this issue. Identifying households affected by energy poverty is essential for shaping and implementing targeted policies. This study explores various definitions of energy poverty within the Bulgarian context by (1) systematically reviewing current methodologies and measures employed in the EU context; (2) assessing the feasibility of implementing these measures in Bulgaria based on data availability, comparing the incidence of energy poverty using alternative measures, and presenting characteristics of energy poverty to inform potential policy instruments; and (3) providing policy recommendations for the measurement and monitoring of energy poverty. The way energy poverty is measured and the overlap with income poverty shape the types of policy solutions perceived to be possible and appropriate to address it. The evaluation supports the need to shift from single indicators to multidimensional approaches in measuring energy poverty. Additionally, enhancing the granularity, quality, and frequency of expenditure and income surveys can contribute to easier operationalization of these concepts and a better understanding of the demographics of energy poverty. The study proposes exploring alternative data generation methods, such as smart meters, further to enhance insights into the dynamics of energy poverty.
    Date: 2024–06–26
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10827
  12. By: Poltoratskaia, Viktoriia; Quintero, Maria Fernanda; Fazekas, Mihaly; Marc Tobias Schiffbauer
    Abstract: Although green public procurement has been established as a desirable policy goal across the globe, especially in the European Union, its scope and impacts remain severely understudied. This paper provides insights into the prevalence and structure of green public procurement in Bulgaria, which is a sustainability laggard within the European Union and hence a least likely champion of green public procurement. The paper also estimates the impacts of green procurement on traditional procurement and economic outcomes: competition, corruption risks, and overall productivity. Using novel data and more comprehensive methods than previous studies, the analysis finds that green public procurement amounted to about 10 to 20 percent of total public procurement spending in Bulgaria in 2011–19. Most descriptors and requirements of green public procurement are found in titles, technical requirements, and product descriptions. Green criteria in award criteria texts, which are mainly used for flagging green public procurement in the literature, have been marginal in comparison. Green public procurement is estimated to improve competition for government contracts among firms, for example by increasing the prevalence of market entrants by 3 to 7 percentage points. Green public procurement contracts are also less prone to corruption risks. For example, they are 0.6 to 1.5 percentage points less likely to receive a single bidder. Finally, green public procurement enhances the efficiency of resource allocation in the economy by helping to channel public resources to more productive firms, for example to those that have 14 percent higher labor productivity. This effect is at least in part explained by the positive interaction between green public procurement and the lower risk of corruption. The findings strengthen the case for pursuing green public procurement goals as they offer synergies with traditional public procurement goals.
    Date: 2024–11–25
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10987
  13. By: Pkhikidze, Nino
    Abstract: Good road infrastructure decreases travel time and improves accessibility to urban areas. Improved rural-urban linkages could also affect rural employment through decreased time and travel costs. To study this link, the paper analyzes the impact of good quality roads on agricultural and non-agricultural jobs in Armenia, using different sets of data and different methodological approaches. To address endogeneity and reverse causality issues of road quality, the paper uses a historical instrumental variable obtained by digitizing historical roads which were mainly used for military purposes - from a military-topographic map of the Caucasus from 1903. The results show that a shorter distance to a good quality road has a statistically significant positive impact on overall non-agricultural employment for men and women, increasing the likelihood of cash-earning jobs for rural women and skilled manual and non-seasonal employment for rural men. People are more likely to work outside their villages and work for more hours if they have access to good quality roads. The results are robust from the analysis of Demographic and Health Survey as well as the Integrated Living Conditions Survey of Armenia.
    Date: 2024–07–10
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10847
  14. By: Monica Robayo; Zamfir, Madalina; Wronski, Marcin
    Abstract: Minimum wages are an essential component of a country's social protection system, aiming to protect vulnerable workers and reduce poverty and wage inequality. Yet, there are risks associated with poor minimum wage design. Higher minimum wages may result in higher earnings for affected workers but fewer job opportunities for others, including the demographic groups they are intended to help, such as those with very low wages and skills and youth, so ex-ante evaluation of potential employment, wage, and distributional impacts is needed. Over the past decade, Romania experienced significant real growth in the minimum wage and a rising minimum-to-median wage ratio. However, when looking at minimum living standards, the analysis shows that the statutory minimum wage is higher than the living wage needed to cover a consumption food basket estimated by the European Commission under the European Reference budget network, but not enough to include non-food components. The microsimulation results using administrative tax data show that tying minimum wage to inflation or the living wage could lead to a slight short-term wage increase for some workers but may cause job loss in the long run, especially for younger workers. The minimum wage increase could have varying impacts across regions and sectors, with the accommodation and food services sector and those living in the Suceava region, which has the highest proportion of affected employees. Moreover, male employees tend to be more affected than their female counterparts.
    Date: 2024–09–30
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10934
  15. By: Klaus W. Deininger; Daniel Ayalew Ali; Kussul, Nataliia; Lemoine, Guido; Shelestov, Andrii
    Abstract: This paper uses remotely sensed and farm-level data to assess the micro-level impacts of the war in Ukraine. Remotely sensed, high-resolution data on areas of war-induced agricultural field damage in different periods are combined with crop cover data for a 2019–23 panel of about 10, 000 village councils. Estimates suggest that there were significant negative effects of field damage on crop area, with persistent, direct impacts, the size of which increased over time. However, the economic losses due to conflict-induced increased transport costs reduced profitability by more than 60 percent, far surpassing the losses from direct crop damage in conflict areas. The lack of diversification into less transport cost sensitive, higher value crops—even in areas far from the conflict zone—points to constraints to adaptation and diversification. By increasing the resilience of farmers in non-conflict areas, removing such constraints could accelerate post-conflict recovery and complement efforts toward reconstruction in directly affected areas.
    Date: 2024–08–19
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10869
  16. By: Britta Laurin Rude; Monica Robayo
    Abstract: To design effective policy instruments that target the energy poor in Romania, it is crucial to understand who the energy poor are. However, these types of analyses are limited by the current data environment. While monetary energy poverty estimates rely on data from expenditure surveys, traditional welfare indicators and detailed information on access to social protection programs form part of the EU-SILC. Samples of both surveys differ; consequently, record linkage of both surveys is impossible. This paper propose an alternative solution to combine information from both surveys, namely statistical matching techniques. It applies several imputation models to impute information on energy spending shares from the HBS into the EU-SILC based on a set of matching variables, compare the performance of these models and apply the best-performing one. Based on the resulting matched dataset, the results show that nearly all the monetary poor are also energy poor, but that a significant additional share of the population in Romania is energy poor. Energy poverty rates are higher at the lower end of the welfare distribution. This result has significant welfare implications.
    Date: 2024–09–18
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10917
  17. By: Klaus W. Deininger; Daniel Ayalew Ali; Eduard Bukin; Martyn, Andrii
    Abstract: The shift from administrative to market-based valuation of assets is a key part of Ukraine’s transition from a planned to a market economy. This shift will improve the functioning of financial markets and the ability of local governments to obtain revenue effectively for local service provision. This paper describes the rationale and evolution of Ukraine’s regulatory framework for market-based valuation. The analysis uses prices and publicly available parcel attributes for the nearly 200, 000 agricultural land sale transactions during 2021–24 to estimate a land price model that is then used to predict prices for the roughly 20 million hectares of commercial agricultural land in the country. Mean predicted prices that are 25 to 33 percent above current valuations hide vast interregional differences. Given their proximity to active conflict, predicted prices in the East and South are close to or even below the normative value, but they are 80 percent above it in the West of the country. A transition to market-based valuation is thus a precondition for fair and equitable taxation and incentives for productive land use. By aligning with globally accepted standards for banking regulation and improving credit access in areas where land values have increased, the transition could also affect the speed and quality of reconstruction. The paper discusses legislative steps to move in this direction.
    Date: 2024–12–11
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10998
  18. By: Ganev, Georgy
    Abstract: In the lively public policy debate in Bulgaria on the country joining the Eurozone, a claim is being made that real convergence of at least 90% is a crucial precondition for joining and therefore Bulgaria should wait until the early 2040s, because only then it is expected to achieve such convergence. The claim is supported with theoretical arguments, empirical evidence and forecasts. Here they are examined in some detail in the context of Bulgaria’s unique position as a country in the EU with a Currency board regime anchored in the euro. It is concluded that economic theory does not pose a requirement for any level of real convergence for an economic area to join a monetary union. In theory, problems due to a less-rich country joining a more affluent monetary union may, but also may not, cause problems such as excess inflation or amplified business cycle. It is also concluded that neither the claim that there exists a convergence threshold of 90% of real income per capita, nor the claim that Bulgaria will necessarily need at least two decades to reach it can withstand even most elementary checks for empirical robustness. Both the theoretical and the empirical claims that Bulgaria should wait for a 90% real convergence until at least the early 2040s before joining the Eurozone are found to have no real economic foundation.
    Keywords: Bulgaria; optimal currency area; monetary union; real convergence; currency board
    JEL: E52 E58 E63
    Date: 2025–02
    URL: https://d.repec.org/n?u=RePEc:pra:mprapa:123599
  19. By: Calice, Pietro; Demekas, Dimitri G.
    Abstract: Financial sector reforms are part of the strategies that countries follow to exit from fragility, but the content and focus of these reforms and the priority they are given relative to other policies vary from country to country. Based on an archival search of publicly available World Bank and the International Monetary Fund country documents, this paper investigates and compares the experiences of seven countries (Armenia, Benin, Cambodia, the Dominican Republic, Rwanda, Senegal, and Viet Nam) that successfully and sustainably exited fragility during the 1980s and 1990s, focusing on the financial sector reforms that were implemented around the time of the exit. The review suggests a few broad patterns. Regardless of the original causes of fragility, successful exit strategies always included financial sector reforms, which invariably focused on short-term goals: stopping bank losses, establishing monetary control, and re-starting the engine of financial intermediation and the flow of credit to the economy. Longer-term financial development goals, such as financial deepening, were recognized as important, but the requisite policy interventions came later, after the financial sector had been restored to health and was able to discharge its basic functions. Crucially, substantial, hands-on, long-term technical assistance and capacity building were in all cases necessary to ensure the long-term success of these reforms.
    Date: 2024–07–16
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10853
  20. By: Kokas, Deeksha; Gladys Lopez-Acevedo; Vu, Ha
    Abstract: Are changes in the labor market in response to changes in exports contained specifically within exporting industries, or do they disperse throughout the economy through supply chain linkages? This paper studies the case of Viet Nam, an example of a successful export-led growth economy, to examine this question. Combining UN COMTRADE data, input-output tables from the Global Trade Analysis Project, and 2010 to 2019 annual labor force survey data for Viet Nam, the study constructed a measure of each worker’s total exposure to export shocks. The measure accounts for changes due to both direct export exposure (increase in exports in the worker’s own industry) and indirect exposure (from increased exports in other industries that use inputs from the worker’s industry). Estimates of the repercussions from increasing exports on labor market outcomes show that both direct and indirect exposure significantly increase workers’ wages and employment, while reducing inactivity and inequality. Wage premiums for attending college decrease, and the gender wage gap narrows. Wages increase more for the lowest-income workers and employment gains accrue more to unskilled workers, while employment decreases for more skilled workers.
    Date: 2024–08–14
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10868
  21. By: Monica Robayo; Balaban, Georgiana; Wronski, Marcin
    Abstract: This paper uses statistical matching techniques to assess tax compliance and underreporting of labor income in Romania, overall and for different population groups, including among minimum wage workers, to understand the distributional implications and its links with minimum wage policy and design. Understanding the extent and distribution of tax evasion is relevant for enhancing domestic tax capacity, its redistributive impacts, and the links with social policy, including minimum wage policy. Estimating the average underreporting of income is challenging due to the significant underrepresentation of top incomes in survey data. After censoring, the average underreporting of income is 6 percent. When looking at the distribution of tax evasion, the analysis also shows significant underreporting of income in the bottom half of the income distribution. The results show that tax-reported income at the median of the income distribution equals only 90 percent of the true (survey) income, and at the 25th percentile, this share is 83 percent. Women are more tax compliant than men. Tax compliance varies across sectors of the economy, regions of the country, and demographic groups. Transport, construction, and food and accommodation are the sectors of the economy with the lowest tax compliance. The underreporting of income results in lower fiscal capacity for the country and may also lower the efficiency of means-tested social assistance. The underreporting of income significantly increases the share of minimum wage earners, which may impact the minimum wage policy.
    Date: 2024–10–02
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10940
  22. By: Baquie, Sandra; Behrer, Arnold Patrick; Du, Xinming; Fuchs Tarlovsky, Alan; Nozaki, Natsuko Kiso
    Abstract: Middle-income countries host the majority of the world’s population exposed to unhealthy levels of air pollution, and the majority of this population lives in urban environments. This study investigates the impact of information provision on household behavior in connection with indoor and outdoor air pollution in a middle-income country’s major urban center — Tbilisi, Georgia. The study implemented a randomized controlled trial to assess whether providing households with different levels of pollution information changes their knowledge of air pollution and avoidance behavior with respect to air pollution, and improves their health outcomes. The study evaluates three treatments: a pamphlet with general information on pollution, the pamphlet combined with daily text messages about local outdoor pollution, and the pamphlet with messages about both indoor and outdoor pollution levels, supplemented with an indoor air pollution monitor. The findings show that while the pamphlet alone did not lead to behavioral change, daily text messages significantly enhanced knowledge about pollution, led to increased avoidance behaviors, and improved health outcomes. The study also examined infiltration rates throughout the city and document three facts: indoor air pollution levels are generally higher than outdoor ones, infiltration rates are high on average, and their variation is driven primarily by behaviors.
    Date: 2024–07–16
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10852
  23. By: Jonas Jessen; Robin Jessen; Andrew C. Johnston; Ewa Gałecka-Burdziak
    Abstract: We exploit policy discontinuities in Poland's unemployment insurance to examine the causal effect of changes to both benefit durations and levels. Using a regression discontinuity approach, we uncover three findings: (1) Higher benefit levels distort employment more than benefit extensions. (2) Benefit durations and levels interact: Longer durations substantially increase the distortionary effect of more generous payments. (3) Higher payments increase the transition of employed workers into unemployment. We develop a model of optimal unemployment insurance that accounts for moral hazard among both employed and unemployed workers. Notably, for level increases, distortionary costs are larger among the employed than unemployed.
    JEL: H0 H53 J65
    Date: 2025–02
    URL: https://d.repec.org/n?u=RePEc:nbr:nberwo:33450

This nep-tra issue is ©2025 by Maksym Obrizan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at https://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.