Ewa Balcerowicz

Restructuring and Development of the Banking Sector in Poland - Lessons to Be Learnt by Less Advanced Transition Countries

The banking sector in transition economies deserves a special attention of policy makers and the public. The first reason for this attention is that financial intermediation plays a special role in an economy: it channels financial savings of enterprises and households into investments. There is no economic growth in a country if this function is not executed in an effective and efficient way, and if the financial sector is not credible. Therefore reestablishment of a sound banking sector has been crucially important for transition countries. The second general reason is that banks are enterprises of a unique character due to the fact that their performance is important not only to shareholders, as it is the case for enterprises in all other economic sectors, but also to depositors. For that reason the public trust is essential for banking. While its creation is a long and comprehensive process, it is very easy to destroy it. The third reason, specific for transition economies, is connected with the very bad starting point. Under the communism allocation of funds by banks was carried out by outside orders and not by inside business decisions based on profitability and risk assessment. Therefore, at the start up of transition, in the sector of then state-owned banks there was neither know-how and business culture nor internal governance structures relevant for market economies. At the same time the banking sector was the terrain where the biggest change of culture and behavior was necessary in order to build its credibility. This fact made the task difficult and complex. The forth reason is that development of the banking sector in transition economies depends on both macroeconomic policy and microeconomic restructuring of enterprises. That is why it cannot be analyzed in isolation.

Barriers to Entry and Growth of New Firms in Early Transition

List of Figures. List of Tables. Contributors. 1. Introduction and Overview E. Balcerowicz, et al. Appendix 1.1. Enterprise Survey Questionnaire. 2. Fiscal and Regulatory Impediments to the Entry of New Firms in Five Transitional Economies I. Hoshi, J. Mladek. 3. Investment and Finance in De Novo Private Firms: Empirical Results From the Czech Republic, Hungary and Poland A. Bratkowski, et al. Appendix 3.1. Additional Econometric Results. 4. Foreign Direct Investment in Small Firms M. Szanyi. 5. Barriers to Entry and the Unofficial Economy J. Christian. 6. From Foe to Friend in 10 Years: Private Business Development in Hungary 1989 1998 M. Szanyi. 7. Barriers to Entry and their Impact on Private Sector Growth in Poland E. Balcerowicz. 8. Barriers to Entry and their Impact on Firms Performance in Albania L. Xhillari, S. Telhaj. Appendix 8.1. Correlation Matrix. 9. Barriers to Entry of New Firms in the Czech Republic J. Mladek, I. Hoshi. Index.

The Impact of Poland's EU Accession on its Economy

The paper briefly discusses the main economic developments in Poland since its accession to the EU in May 2004 and sees how they relate to the regulatory environment and policies which the EU imposes on the member states. The paper starts with a brief description of principles, legislation and policies adopted in the EU, which influence the decisions made by the government, as well as entrepreneurs, investors, companies and workers. Next it discusses outcomes that were anticipated to occur as a result of the 2004 accession. Economic developments in Poland in two years of EU membership are presented in the last section. It starts with the macroeconomic performance, including economic growth and nominal convergence. The effects of Poland’s participation in the single market on Polish trade (goods and services flows), capital flows (foreign direct investments – FDI), and labor flows (and specifically migration to the EU-15) are also discussed. The size and destination of EU funds committed to Poland are presented. The final paragraph confronts the factual results of the economic processes, highlighting the public’s perception of Poland’s accession and their assessment of the outcomes both for their country and for themselves as individuals. Even though the paper concerns the recent period of 2004-2006 there are frequent references to developments that took place in Poland in the pre-accession period. This is because the country’s integration into the EU economy was a gradual and lengthy process which had formally been initiated in December 16, 1991 when Poland and the EU signed the Europe Agreement.

Barriers to Entry and their Impact on Private Sector Growth in Poland

At the beginning of transition Poland was already far ahead of other former socialist countries with regard to the role of the private sector in the economy. For example, Polish farmers were never deprived of their land, as it was the rule in other countries under the communist regime.1 With 4 million people self-employed and employed in private farms Poland was unique amongst countries embarking on the road from a “planned” to a market economy. Outside agriculture, a further 1.8 million people worked in private companies, constituting 13.3% of employment in non-agricultural enterprises.

Regulatory Policy in Ukraine: Current State and What Should Be Done to Improve the Business Environment

The regulatory environment for businesses in Ukraine has been considered unfavorable and market unfriendly. Although various governments have made numerous efforts to improve it, many of these attempts have failed and increasing the quality of the regulatory environment in the country still remains on the agenda of the government. With this report we claim to review a set of measures undertaken in Ukraine after the Orange Revolution in the area of deregulation of business activity. The paper analyzes the effectiveness of actions undertaken in Ukraine in a general framework of successful regulatory policies implemented in other parts of the world. Based on this analysis we developed concrete public policy measures aiming to increase the quality of the regulatory environment in the country, which, in turn, should secure Ukraine’s further movement toward a real, functioning market economy.

Competitiveness of the Polish Manufacturing Sector: Does Government Policy Matter?

This paper investigates an impact of the government policies aimed at the enterprise sector on competitiveness of this sector. The analysis was based on an example of the Polish manufacturing sector and the eight-year period from 1996 to 2003. Section 1 presents different notions and measures of competitiveness and defines the one adopted for the purpose of the present analysis - the trade measure. Section 2 presents an assessment of the competitiveness of the Polish manufacturing sector on both the internal (domestic) and external market, in particular the EU-15 market. Subsequently, the authors compare domestic and external competitiveness of individual manufacturing industries and present conclusions on the competitive and noncompetitive branches. Section 3 describes a size of government interventions affecting manufacturing enterprises in the years 1996-2003. These interventions took the following forms: income (corporate and personal) taxes imposed on enterprises, excise taxes, VAT, depreciation rates, subsidies, and social security contributions. A size of the state ownership in the manufacturing sector was examined in the analysis, too. Section 4 presents results of the econometric analysis of factors influencing the competitiveness of the Polish manufacturing sector on both the internal (Polish) and external (EU-15) market. Moreover, an impact of different government policy instruments on competitiveness is assessed by means of the linear regressions. Section 5 contains conclusions. The general recommendation is that the competitiveness of the Polish manufacturing sector could be increased by relaxing fiscal burden, further privatization and restructuring of state owned companies. The state aid in a form of subsidies seems to harm both internal and external competitiveness rather than to support them.

Complementarities between barriers to innovation: data evidence from Poland

This paper investigates the barriers to innovation perceived by Polish manufacturing firms. It refers to the heterogeneity of innovation active firms. We introduce a taxonomy of innovative firms based on the frequency with which they introduce commercialised innovations using data from both CIS4 (for 2002-2004) and CIS5 (2004-2006). Two groups of innovation-active firms are distinguished: those which introduced innovation in both periods covered by both CIS (which we call persistent innovators) and those which introduced innovation either in CIS4 or CIS5 (which we call occasional innovators). We use a four step analysis covering binary correlations, Principal Component Analysis, probit model and correlations of disturbances. Two types of explanatory variables describing firms’ characteristics and innovation inputs used are considered. The paper shows that there are considerable differences in sensitivities to the perception of innovation barriers and in complementarities among barriers between persistent and occasional innovators. In the case of occasional innovators, a kind of innovation barrier chain is observed. This has an impact on differences in the frequency of innovation activities between the two groups of innovators and results in a diversification of innovators.