Identifying Structural Reform Gaps in Emerging Europe, the Caucasus, and Central Asia

By Norbert Funke, Asel Isakova, Maksym Ivanyna

March 30, 2017

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Norbert Funke, Asel Isakova, and Maksym Ivanyna. Identifying Structural Reform Gaps in Emerging Europe, the Caucasus, and Central Asia, (USA: International Monetary Fund, 2017) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Using data from the World Economic Forum’s Global Competitiveness Report as an example, this paper compares structural indicators for 25 countries in Emerging Europe, the Caucasus, and Central Asia with a generic country with similar charactersitics that is 40 percent richer as well as a country with the average EU income. This comparison suggests that improvements will be particularly crucial in the areas of institutions, financial market development, infrastructure, goods and labor market efficiency and areas related to innovation. For the generally more ambitious goal of reaching average EU income, the reform needs are correspondingly larger. The methodology focuses on (approximate) comparisons between countries and does not try to establish the link between structural reforms and growth. While we test for changes in empirical specifications, caveats relate to the quality of structural indicators, possible non-linearities, and reform complementarities. The approach can be applied to other indicators and at a more granular level.

Subject: Education, Financial crises, Financial markets, Financial sector development, Global financial crisis of 2008-2009, Labor, Labor markets, Macrostructural analysis, National accounts, Personal income, Structural reforms

Keywords: Better-off country, Caucasus, Central Asia, CESEE, Country indicator k, Country knowledge, ECA country, Financial sector development, Global, Global financial crisis of 2008-2009, Labor markets, Personal income, Reform gaps, Reform indicator, Structural reforms, WP

Publication Details

Pages:

43
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/082
Stock No:

WPIEA2017082
ISBN:

9781475590616
ISSN:

1018-5941

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