Leszek Balcerowicz

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.

Institutional Change After Socialism and the Rule of Law

The rule of law has been studied by political philosophy, law, political science, sociology and economics. The representatives of these social sciences have used various approaches (including various mixtures of conceptual and empirical analyses), for the study of this important problem. This also applies to research on post-socialist transformation which provided a unique and powerful natural experiment for students of institutions. In this paper I attempt to place the rule of law within a broader context, that of institutional change after socialism. This is why I start with a stylized description of this system and of what has happened to it after the collapse of socialism in the former Soviet bloc (second section). Then I try to link institutional change after socialism to the rule of law (third section). This requires a minimal clarification of this concept. In the fourth section, I discuss the rule of law after socialism in the light of empirical studies, mainly by economists. The final section sums up the main findings: changes in the legal framework take less time than institutional changes, including the transformation of the enforcement apparatus. As a result, widespread implementation gaps have emerged even in the most reformed transition countries.

Institutions and Convergence (Preliminary Version)

Institutional variables are the most important factor explaining real convergence. But what are institutions? This paper examines the relationship between institutions and policies, institutions and organisations, and formal and informal institutions. The concept of propelling and stabilizing institutions is introduced and used to explain differences in real convergence. Finally, issues of institutional changes are analysed based on an analytical framework which consists of initial conditions and two types of forces: collectivist and liberal. I first briefly present some basic facts about economic convergence and divergence over the last 200 years. I then discuss how the problem of long-run growth has been treated in the economic literature. Section 3 attempts to classify the concept of institutions – the key explanatory variable in the deeper analysis of the relative pace of development. In Section 4 I describe two types of institutions, propelling and stabilizing, and their relationship to economic growth. Based on previous sections and the empirical literature on convergence, I then formulate some broad propositions concerning why countries converge or diverge (Section 5). The explanation runs in terms of institutional variables. In Section 6 I go one level deeper and ask what explains institutional change