Economic Growth in the Eurasian Transition Economies: The Roles of Institutional and Structural Factors

Abstract

The study aims to evaluate economic growth process and the problems faced by the selected transition economies in Eurasia during the transition period and especially after their independence. The countries analyzed are Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. The economic growth performances are evaluated with selected institutional and structural factors; namely, with political stability, democratization and corruption with panel regression analyses. Due to the availability of the data and to obtain a balanced panel of the analyzed countries, the sample is restricted to the 1987-2011 period. The empirical findings suggest that the role of democratization has been significant on growth for the period of transition and after the independence. Unexpectedly, the findings point at positive impacts of corruption on economic growth which suggest that high levels of corruption have significant effects on economic growth due to the enlargement of the informal economy and which translates itself on GDP growth rates. Empirical results also suggest that the success or failure in economic development in this regard is related to, in addition to measures taken in terms of economic reforms, the cooperation of the societies with these reforms, the level political stability, corruption, social-democratization of communist parties and failure or success in claiming the conducted reforms by the transition economies.