The economic prospects of the CIS: the sources of long term growth (synthesis)

The economic prospects of the CIS: the sources of long term growth (synthesis)

The importance of building institutions for higher growth in the CIS

This document, published by the IRIS Center at the University of Maryland, is a synthesis of a 2003 book bringing together ten studies on the transition and growth experience and the foundations for long-term growth of the new independent states of the former Soviet Union. It reports that, by 2000-02, most of these countries has stabilised economically, and were experiencing economic growth, although most were still struggling to regain their 1990 level of GDP per capita. Most of the countries had transformed their economies from predominantly public to predominantly private, and away from industry and into services.

The synthesis argues that the long-term growth prospects of the CIS countries will depend more upon the speed with which they are able to build a new institutional system, rather than on their ability to collect enough resources or technological innovation. It suggests that the early debates about gradual versus “fast track” transition were simplistic, and that building new institutions, both formal and informal, and making them work together, is a long process. It concludes with the prediction that those states which are better at meeting this institutional challenge will have higher and more sustainable growth, and that the global economy will magnify the results.

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