Abstract: "Drawing on the recent literature on economic institutions and the origins of economic development, the authors offer a political economy explanation of why institution building has varied so much across transition economies. They identify dependence on natural resources and the historical experience of these countries during socialism as major determinants of institution building during transition by influencing the political structure and process during the initial years. Their empirical analysis shows that countries that are more reliant on natural resources and spent a longer time under socialist governments are more likely to see former communists remain in power and to start the transition process with less open political systems, with negative repercussions for the development of market-compatible institutions. Using natural resource reliance and the years under socialism to extract the exogenous component of institution building, the authors also show the importance of institutions in explaining the variation in economic development and growth across transition economies during the first decade of transition."--World Bank web site.

Drawing on the recent literature on economic institutions and the origins of economic development, the authors offer a political economy explanation of why institution building has varied so much across transition economies. They identify dependence on natural resources and the historical experience of these countries during socialism as major determinants of institution building during transition by influencing the political structure and process during the initial years. Their empirical analysis shows that countries that are more reliant on natural resources and spent a longer time under socialist governments are more likely to see former communists remain in power and to start the transition process with less open political systems, with negative repercussions for the development of market-compatible institutions. Using natural resource reliance and the years under socialism to extract the exogenous component of institution building, the authors also show the importance of institutions in explaining the variation in economic development and growth across transition economies during the first decade of transition.

Why are some nations wealthy while others are desperately poor? Despite the rapid advancement of technology and the free flow of information provided by computers, many poor nations are falling further behind the wealthy nations of the world. Why is it that these poorer nations cannot catch up? Until recently, economic theory provided limited help in answering these questions. But the New Institutional Economics, a rapidly growing body of economic theory, may provide the answers. Timothy Yeager's Institutions, Transition Economies, and Economic Development clearly explains the New Institutional Economics, and applies its tenets to the transition economies of Poland and Russia. Readers will gain a perspective on transition and developing economies that has never been explored before in a single book.

Why are some nations wealthy while others are desperately poor? Despite the rapid advancement of technology and the free flow of information provided by computers, many poor nations are falling further behind the wealthy nations of the world. Why is it that these poorer nations cannot catch up? Until recently, economic theory provided limited help in answering these questions. But the New Institutional Economics, a rapidly growing body of economic theory, may provide the answers. Timothy Yeager’s Institutions, Transition Economies, and Economic Development clearly explains the New Institutional Economics, and applies its tenets to the transition economies of Poland and Russia. Readers will gain a perspective on transition and developing economies that has never been explored before in a single book.

When I was growing up in Peru, I was told that the farms I visited belonged to farming communities and not to the individual farmers. Yet as I walked from field to field, a different dog would bark. The dogs were ignorant of the prevailing law; all they knew was which land their masters controlled. In the next 150 years those nations whose laws recognize what the dogs already know will be the ones who enjoy the benefits of a modern market economy. - Hernando de Soto

This book analyses the development path of transition economies in European Countries and former Soviet Republics that have experienced the transformation from planned economies to market economies since the fall of the Berlin wall in 1989. It examines economic growth, institutional change and human development performance.

This title was first published in 2002.The importance of institutions for transition economies has so far been overlooked; Michael Cuddy and Ruvin Gekker bring together leading experts in the field to fill this crucial void in the literature. The contributors concentrate on an ongoing tension between informal constraints and mechanisms and the new formal rules and mechanisms that have gradually evolved through the transition period. Experiences are primarily drawn from Russia. The book consists of three parts, the first comprising an analysis, synthesis and generalizations of the institutional adaptations, as a market economy slowly emerges from a fog of shifting rules and varying interpretations. This is followed by the study of business and taxation authorities’ behavior as they try to minimize or maximize the taxation take. The volume also analyzes the challenges facing central and regional governments in delivering equitable levels of public services across regions of vastly different development levels, while at the same time trying to stimulate regional economic growth.

'. . . this volume is an excellent resource for those interested in the analysis of institutions' design and economic development. . .' - Oscar Alfranca, Progress in Development Studies The main theme of this study is the political economy of policy reform in less developed countries and post-socialist countries. Given the complexity of economic development and transition, Joachim Ahrens views failures in policy reform, poor public sector management, rent-seeking, corruption, and over-centralization as systematic, though not exclusive, instances of institutional failure.

August 1997 The predictability of a transition economy's institutional framework may well influence the amount of foreign direct investment and economic growth the economy can expect. Building reliable institutions that support a market system is widely believed to be critical to a successful economic transition. Brunetti, Kisunko, and Weder present indicators on the predictability of the institutional framework across twenty transition economies--indicators of the predictability of rules, political stability, the security of property rights, the reliability of the judiciary, and the lack of corruption. They then investigate whether these indicators can explain differences in economic performance. The results suggest that the predictability of the institutional framework may indeed explain a large part of differences in foreign direct investment and in economic growth among transition economies. Political stability and secure property rights are particularly important to entrepreneurial confidence in the economy. This paper--a product of the Office of the Chief Economist and Senior Vice President, Development Economics--was produced as a background paper for World Development Report 1997: The Role of the State in a Changing World. The study was funded in part by the Research Support Budget under the research projects Cross-Country Indicators of Institutional Uncertainty (RPO 680-51) and Indicators of Government Quality as Perceived by the Private Sector (RPO 681-52).