Policy Research Working Papers (PRWP)

Robert E. Anderson, Voucher Funds in Transitional Economies: The Czech and Slovak Experience, PRWP no. 1324. To order: Faten Hatab, the World Bank, Room H8-087, tel. (202) 473-5835.

Kathie Krumm, Branko Milanovic, and Michael Walton, Transfers and the Transition from Socialism: Key Tradeoffs, PRWP no. 1380, November 1994, 49 p. To order: Kathie Krumm, the World Bank, Room H12-081, tel. (202) 473-4263.

David Sewell and Christine I. Wallich, Fiscal Decentralization and Intergovernmental Finances in the Republic of Albania, PRWP no. 1384, November 1994, 57 p.

Tax sharing of central government revenues based on area of origin cannot be the only means of local finance in Albania, as most revenue is collected from a few districts. To meet financial needs, local governments need some authority over significant own-source revenues (such as user charges and property and vehicle taxes). Privatization revenues can also help local governments, but only in the short run as they are nonrecurrent. For low-income regions incapable of meeting their spending needs on their own, a transparent, equalizing transfer system should be developed. Albania's draft laws allow for this possibility, having established constituent and independent budgets for the local level. To order: Ms. Gemma Langton, the World Bank, Room H11-075, tel. (202) 473-8392.

Patrick Conway, Ruble Overhang and Ruble Shortage: Were They the Same Thing? PRWP no. 1389, December 1994, 20 p.

"Ruble overhang" and ruble shortages in the Soviet Union and its successor states were manifestations of the same economic phenomenon: the household sector's inability to convert financial assets into purchasing power over commodities. In both cases, forced saving led to a reduction in purchasing power and downward pressure on inflation. The difference was in the mechanism that induced forced saving. For the ruble overhang, the government maintained price rigidity; and there was nonprice rationing of output that was insufficient to satisfy demand at those rigid prices. For the ruble shortage, the government—through the government-controlled banking system—imposed the holding of bank deposits on households, through mandatory wage deposit programs and through the de facto inconvertibility of deposits to currency. To order: Ms. Lenora Suki, the World Bank, Room H2-096, tel.(202) 473-3974.

Piritta Sorsa, Regional Integration and the Baltics: Which Way? PRWP no. 1390, December 1994, 48 p. To order: Jennifer Ngaine, Room R2-052, ext. 37947.

Jun Ma, Macroeconomic Management and Intergovernmental Relations in China, PRWP no. 1408, January 1995, 77 p. To order: Ms. Carlina Jones, the World Bank, Room N10-063, tel.(202) 473-7754.

Nanak Kakwani, Income Inequality, Welfare, and Poverty: An Illustration Using Ukrainian Data, PRWP no. 1411, January 1995, 54 p. To order: Ms. Grace Evans, the World Bank, Room N11-041, tel. (202) 458-5783.

Ren Ruoen and Chen Kai, China's GDP in U.S. Dollars Based on Purchasing Power Parity, PRWP no. 1415, January 1995, 46 p.

Lyn Squire and Sethaput Suthiwart-Narueput, The Impact of Labor Market Regulations, PRWP no. 1418, February 1995, 35 p. To order: Ms. Ghislaine Bayard, the World Bank, Room N11-049, tel. (202) 473-7460.

Other World Bank Publications

Farm Restructuring and Land Tenure in Reforming Socialist Economies: A Comparative Analysis of Eastern and Central Europe, World Bank Discussion Paper no. 268, February 1995, 170 p.

Zvi Lerman, Karen Brooks, and Csaba Csaki, Land Reform and Farm Restructuring in the Ukraine, World Bank Discussion Paper no. 270, December 1994, 126 p.

Simon Commander and Fabrizio Coricelli (eds.), Unemployment, Restructuring, and the Labor Market in Eastern Europe and Russia, EDI Development Studies, December 1994, 416 p.

China: Internal Market Development and Regulation, World Bank Country Study, December 1994, 274 p.

Poland: Policies for Growth with Equity, World Bank Country Study, January 1995, 148 p.

Tajikistan: The Transition to a Market Economy, World Bank Country Study, December 1994, 264 p.

Tanzania: Agriculture, World Bank Country Study, January 1995, 286 p.

Viet Nam: Poverty Assessment and Strategy, A World Bank Country Study, 1995.

The study is based on the Viet Nam Living Standards Survey, the first multipurpose household survey ever performed in Viet Nam. It was conducted by the government with World Bank technical assistance. Key findings include:

• The incidence of rural poverty averages 57 percent, twice as high as the 27 percent poverty incidence found in urban areas. About 90 percent of all the poor are concentrated in rural areas, and more than 75 percent are farmers.

• There are significant regional disparities in living standards throughout the country. Poverty incidence ranges from 33 percent in the Southeast to 71 percent on the North Central Coast.

• Despite very low levels of per capita consumption throughout Viet Nam, other social indicators, even among the poor, are very high, compared with other countries with similar levels of GDP per capita. For example, among the poorest 20 percent of Vietnamese, almost 80 percent are literate. (Per capita income in Viet Nam is $170 a year.)

• Education is a key indicator of agricultural productivity, per capita consumption, and household welfare. Sixty-five percent of those with no education are poor, while only 11 percent of university graduates are poor.

• The poorest children tend to drop out after grade school—only 19 percent of them go on to junior secondary schools at the appropriate age.

Hyung-Ki Kim and Mashiko Aoki, Corporate Governance in Transitional Economies: Insider Control and the Role of Banks, EDI Development Studies, March 1995, 492 p.

The World Bank Atlas: 1995 27th edition, the World Bank, 1995, 36 p.

Leila M. Webster, Juergen Franz, Igor Artimiev, and Harold Wackman, Newly Privatized Russian Enterprises, World Bank Technical Paper no. 241, 1994, 70 p.

World Data 1994: World Bank Indicators on CD-ROM, the World Bank, December 1994.

World Debt Tables 1994-95: Data on Diskette, the World Bank, 1995.

World Bank data and statistics on the states of the former Soviet Union are now available on diskette. The database includes more than 4,000 indicators covering population and labor, national accounts, foreign trade, government finance, monetary statistics, industry, agriculture, prices and wages, household budget statistics, and investment figures. The data are for 1980 and 1985-93.

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IMF Publications

Matthew I. Saal and Lorena M. Zamalloa, Use of Central Bank Credit Auctions in Economies in Transition, IMF WP no. 94/11, June 1994, 30 p.

Vito Tanzi, Corruption, Governmental Activities, and Markets, IMF WP no. 94/99, August 1994, 20 p.

Adam G. G. Bennett, Currency Boards: Issues and Experiences, IMF WP no. 94/18, September 1994, 25 p.

Ernesto Hernández-Catá, Russia and the IMF: The Political Economy of Macro-Stabilization, IMF WP no. 94/20, September 1994, 21 p.

Koenraad Van der Heeden, The Pay-As-You-Earn Tax on Wages: Options for Developing Countries and Countries in Transition, IMF WP no. 94/105, September 1994, 34 p.

Marcello de Cecco, Central Banking in Central and Eastern Europe: Lessons from the Interwar Years' Experience, IMF WP no. 94/127, October 1994, 31 p.

Influenced by the Financial Section of the League of Nations, the new central banks adopted laws that prohibited or severely restricted the financing of government fiscal debt. They were encouraged to centralize their payments systems and manage exchange rates to keep control of the money supply and achieve monetary stability. Before long they were forced to adopt further provisions in banking supervision to regulate commercial banks. The paper considers the cases of Czechoslovakia, Hungary, and Poland.

Peter K. Cornelius, Defining, Measuring and Alleviating Poverty in an Economy in Transition: The Case of Lithuania, IMF WP no. 94/116, October 1994, 20 p.

Zu-liu Hu, Social Protection, Labor Market Rigidity, and Enterprise Restructuring in China, IMF WP no. 94/122, October 1994, 29 p.

Carline Van Rijckeghem, Albania: Income Distribution, Poverty, and social Safety Nets in the Transition, 1991-1993, IMF WP no. 94/123, October 1994, 63 p.

Income and consumption data in Albania produce conflicting results. Based on income data, including average presumptive agricultural incomes and state sector wages, there is a significant rise in real income in rural areas and a decline in real income in urban areas. Based on food consumption data, however, a large decline in urban real incomes is implausible. The possible clue: poverty in both the urban and the rural population was mitigated by the presence of formal social safety nets, as well as informal arrangements in the form of emigrant remittances.

Gabriel Sensenbrenner and V. Sun-dararajan, The Payments System and Its Effects on Monetary Operations: Recent Experience in the Russian Federation, IMF WP no. 94/133, November 1994, 49 p.

James Haley and Ghiath Shabsigh, Monitoring Financial Stabilization in Moldova: The Role of Monetary Policy, Institutional Factors and Statistical Anomalies, IMF WP no. 94/25, December 1994, 15 p.

Liam Ebrill, Ajai Chopra, Charalambos Christofides, and others, Poland: The Path to a Market Economy, Occasional Paper no. 113, October 1994, 117 p.

Wanda Tseng, Hoe Ee Khor, Kalpana Kochhar, and others, Economic Reform in China: A New Phase, Occasional Paper no. 114, November 1994, 84 p.

To order IMF publications: IMF Publication Services, 700-19th Street, N.W., Washington, D.C. 20431, tel. 9202) 623-7430, fax (202) 623-7201.

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CEPR Publications, London

Lászlo Halpern, Comparative Advantage and Likely Trade Pattern of the CEECS, CEPR no. 1003, September 1994, 46 p.

Sophia Dimelis and Konstantine Gatsios, Trade with Central and Eastern Europe: The Case of Greece, CEPR no. 1005, September 1994, 51 p.

Bernard M. Hoekman and Petros C. Mavroidis, Linking Competition and Trade Policies in Central and East European Countries, CEPR no. 1009, September 1994, 42 p.

Andre Sapir, The Europe Agreements: Implications for Trade laws and Institutions: Lessons from Hungary, CEPR no. 1024, September 1994, 27 p.

Patrick A. Messerlin, Central European Countries' Trade Laws in the Light of International Experience, CEPR no. 1044, November 1994, 30 p.

Dani Rodrik, The Dynamics of Political Support for Reform in Economies in Transition, CEPR no. 1115, January 1995, 32 p.

John Micklewright and Gyula Nagy, Unemployment Insurance and Incentives in Hungary, CEPR no. 1118, January 1995, 42 p.

To order: Center for Economic Policy Research, 25-28 Old Burlington Street, London W1X 1LB, United Kingdom, tel. (4471) 734-9110.

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OECD Publications, Paris

OECD Economic Surveys: Poland, 1994, 191 p.

To order: OECD Publications, 2 rue Andre-Pascal, 75775 Paris Cedex 16, France, tel. (331) 4524 8200, fax (331) 4910 4276.

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Leuven Institute Publications, Leuven, Belgium

Marvin Jackson, Wouter Biesbrouck, and Valentijn Bilsen, Central Europe and New Possibilities of Integration into the European Economic Space: The Initiative of Flanders, Reprint 16, 1994, pp. 84-95.

Adam Torok, Industrial Policy and Foreign Direct Investment (FDI) in Hungary, Reprint 17, 1994, 36 p.

To order: Katholieke Universiteit Leuven, Blijde Inkomststraat 5, 3000 Leuven, Belgium, tel. (3216) 285-340, fax (3216) 285-344.

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Institute of Economic Studies, Prague

Michal Mejstrik, Czech Investment Funds as a Part of Financial Sector and Their Role in Privatization of the Economy, Reform Round Table Working Paper [RRT WP] no. 14, May 1994, 25 p.

Eva Zamrazilová, Labour Market, RRT WP no. 15, May 1994, 13 p.

Jan Mládek, Transformation and Performance of the Czech Agriculture, RRT WP no. 16, August 1994, 26 p.

Strategy of the Czech Telecommunications Development, Universitas Carolina Pragensis, Prague, June 1994, 62 p.

To order: Universitas Carolina Pragensis, Institute of Economic Studies, Faculty of Social Sciences, Charles University, 11001 Prague 1, Smetanovo nabr. 6, Czech Republic, tel. (442) 2481 0804, fax (422) 2481 0987.

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The Institute for World Economics, Budapest

Fiscal Developments in Hungary: 1990-93, RRT Hungary Document no. 33, 1994, 15 p.

Improvement in the Hungarian Banking System, RRT Hungary Document no. 34, 1994, 30 p.

Hungary's Agricultural Trade Regime, RRT Hungary Document no. 35, 1994, 17 p.

The Behaviour of Investment in Hungary, RRT Hungary Document no. 36, 1994, 12 p.

The Role of the State during the Transition in Hungary, RRT Hungary Document no. 37, 1994, 15 p.

To order: The Institute for World Economics, Hungarian Academy of Sciences, 1124 Budapest, Kállo esperes u. 15, 1531 Budapest, P.O. Box 36, Hungary.

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Center for Agricultural and Rural Development, Ames, Iowa

William H. Meyers and Natalija Kazlauskiene, Privatization and Restructuring of State and Collective Farms: Policy Environment and Strategies, Baltic Report no. 94-BR 16, December 1994, 11 p.

To order: Center for Agricultural and Rural Development, Iowa State University, Ames, Iowa 50011-1070, USA, tel. (515) 294-1183, fax (515) 294-6336.

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Latvian Academy of Sciences, Riga

Inna Dovladbekova and Tatyana Mur-avskaya, Development of the Securities Market in Latvia, Reform Round Table Working Paper no. 10, January 1995, 26 p.

To order: Institute of Economics, Latvian Academy of Sciences, 19 Turgeneva Street, LV-1003, Riga, Latvia, tel. (371) 222-2830, fax (371) 782-1289.

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WIIW Publications, Vienna

Kazimierz Laski, The Investment Multiplier at a Variable Savings Ratio, WIIW no. 154, October 1994, pp. 205-20.

Anneli Ute Gabanyi and Gábor Hunya, Vom Regimewechsel zur System-Transformation: Rumanien, WIIW no. 155, November 1994, pp. 77-111.

Josef Falkinger, Research Project: Theoretical Investigation and Empirical Assessment of the Impact of Budget Deficits on the Economy, WIIW no. 208, November 1994, 67 p.

Marko Jaklic, Concepts for an Industrial Policy: The Case of Slovenia, WIIW no. 250, November 1994, 63 p.

To order: Vienna Institute for Comparative Economic Studies, P.O. Box 87, A-1103 Vienna, tel. (431) 782-567, fax (431) 787-120.

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Institute for Economic Research Publications, Ljubljana, Slovenia

Andrej Kumar, European Integration: Reality or a Dream?, IER no. 7, 1994, 20 p.

Franciska Logar and D. Zorko, Upswing of Tourism in Slovenia, IER no. 8, 1994, 23 p.

Milena Bevc, Educational Capital in Slovenia in the Early 90s, IER no. 9, 1994, 28 p.

Franc Kuzmin, The Main Characteristics of Slovene Labour Market during Transition Period: The Problem of Unemployment, IER no. 10, October 1994, 9 p.

Emil Erjavec, Miroslav Rednak, and Jernej Turk, The Main Issues Involved in the Economic Transition of Slovene Agriculture, IER no. 11, October 1994, 16 p.

Stanka Kukar, The Hidden Economy and the Labour Market in Slovenia in the Period of Transition, IER no. 12, December 1994, 16 p.

To order: Institute for Economic Research, Kardeljeva ploscad 17, 61000 Ljubljana, Slovenia, tel. (386) 61 345-787, fax (386) 61 342-760.

CASE Publications, Warsaw, Poland

Privatization in the Postcommunist Countries: Bulletin-Fall '94, no. 29, 1994, 31 p.

Foreign Privatization in Poland, no. 30, October 1994, 74 p.

Kazimierz Kloc, The Banking System in Kyrgyzstan, no. 31, November 1994, 22 p.

To order: CASE-Center for Social and Economic Research, Bagatela 14, 00-585 Warsaw, Poland, tel./fax (48-2) 628-6581.

Other New Publications

Mario I. Blejer and Fabrizio Coricelli, The Making of Economic Reform in Eastern Europe: Conversations with Leading Reformers in Poland, Hungary, and the Czech Republic, Studies of Economies in Transition, Edward Elgar, London, 1995, 156 p. To order: Edward Elgar Publishing Limited, Gower House, Croft Road, Aldershot, Hampshire GU11 3HR, England.

Adolf J. H. Enthoven, Jaroslav V. Sokolov, and Valery V. Kovalev, Doing Business in Russia and the Other Former Soviet Republics: Accounting and Financial Management Issues—An Updated Study, 1994, Institute of Management Accounts, New Jersey, and Center for International Accounting Development, Texas, 1994, 164 p.

Curricula are being developed for teaching in Western (international)-style accounting practices. Several training programs have been formulated jointly by Russia academics and practitioners, the United Nations, and Western academics, especially at the Center for International Accounting Development of the University of Texas-Dallas, in the United States; in Russia, at the St. Petersburg Institute of Commerce and Economics, Moscow State University, Moscow Finance Academy, and Moscow State Institute of International Relations; and in the Ukraine, at Kiev State University.

To order: Institute of Management Accountants, 10 Paragon Drive, Montvale, New Jersey 07645-1760; or Center for International Accounting Development, P.O. Box 830688, University of Texas at Dallas, Richardson, Texas 75083-0688.

William G. Frenkel, Foreign Investment in Kazakhstan: Legal Regulation and Practice, 1994. To order: Transnational Juris Publications, Inc., One Bridge Street, Irvington, New York 10533, tel. (800) 914-8186, fax (914) 591-2688.

Zivko Jurcevic, Social Security Policy of the Republic of Croatia, Reform Round Table Working Paper no. 15, January 1995, 15 p. To order: IRMO, Ulica Ljudevita Farkasa Vukotinovica 2, P.O. Box 303, 41000 Zagreb, Croatia, tel. (385-41) 454-522, fax (385-41) 444-059.

Bartlomiej Kaminski, The Legacy of Communism, East-Central European Economies in Transition—Study Papers, November 1994, pp. 9-25. To order: U.S. Government Printing Office, Superintendent of Documents, Congressional Sales Office, Washington, D.C. 20402.

Paul J. J. Welfens and Piotr Jasinski, Privatization and Foreign Direct Investment in Transforming Economies, Dartmouth Publishing Company, Aldershot/USA 1994, 295 p. To order: Dartmouth Publishing Company, Gower House, Croft Road, Aldershot, Hampshire GU11 3HR, England.

L. B. Babayeva and S. L. Holt (editors), Agrarian Reforms in Russia and the Situation of Women and Pensioners (in Russian), Report no. 4, Russian Scientific Fund, Moscow, 1994, 126 p.

Women and pensioners in Russia's rural areas have been hit hard by economic reform. According to recent statistics, about 26.2 percent of the total population (39 million people) live in Russia's agricultural regions. Among the rural areas' active population the number of women considerably exceeds that of men: for every 1,000 men there are 1,120 women. The number of pensioners totals about 12 million, one-third of all pensioners in Russia. The aging of the rural population is accelerating: almost a quarter of them are above pensionable age (60 years for men and 55 for women).

Women have been seriously affected by the growing unemployment. Data for 1992 show that women made up 72.2 percent of all unemployed. In the Orel District (oblast) unemployed women represented 81.3 percent of all registered unemployed. Those women who did retain their jobs earned much less than their male counterparts. Over a five-year period (1986-91) a woman's salary on average represented only two-thirds of a man's salary in a comparable job. And while the law does not discriminate between genders, in the Orel oblast only 3 percent of land ownership was registered to women.

Pensioners in the agrarian sector are in a much weaker position than anticipated. For the most part, they are ill-informed and unprepared for the onslaught of changes in the organizational and legal arenas. When a senior official was asked about the role pensioners play in reorganizing agriculture, he claimed that "they do not understand what is going on." In the Orel oblast, though most pensioners were well-aware of the physical size of their land shares, they knew little of their value in rubles. Only 50 percent of the active pensioners and 35.5 percent of the retired ones were able to define the financial value of their land.

Most pensioners derive their primary income from private plots (92 percent) or from pensions (67 percent), while dividends from land shares provided only 6 percent of pensioners with their primary source of income. Unemployed women pensioners number 2,730 for every 1,000 men in the agrarian sector, tilting the scale even further out of women's favor.

Alice Amsden, Jacek Kochanowicz, and Lance Taylor. The Market Meets its Match— Restructuring the Economies of Eastern Europe, Harvard University Press, Cambridge/Massachusettes (U.S.)/London, 1994, 250 p.

This book might as well have been titled "From Pseudo-Socialism through Pseudo-Privatization to Pseudo-Capitalism; the Failure of the Washington Consensus Approach to Transition." It is an overt assault on the structural adjustment agenda of the Bretton Woods organizations, the new elites in the transition countries, and their Western academic advisers.

Yet it would be a mistake to shrug the book off as just another example of Bretton Woods-bashing in pursuit of an alternative ideological agenda. This book advocates that, rather than proceed from abstract principles, capitalism to be tailored to the transition economies' institutional environment, selecting policies that have succeeded in countries with comparable conditions. It recommends a sustainable policy mix; implicitly, a gradualist approach.

The authors chose their success stories from the East Asian "late industrializers," such as Japan and China. But the archetype is Korea (subject of much of Amsden's earlier works). Leaning on Taylor's structuralist analysis, Latin America provides the major negative lessons of failing to apply conventional macroeconomic adjustment programs. (Mexico is regarded in the book as the only successful country, apart from Chile, since 1982.) A combination of government-set prices and output allocation could facilitate transition to a market-driven system, argue the authors, and they urge these economies to adopt cutting-edge foreign technologies and to create effective marketing organizations, taking advantage both of their highly valued human capital and broad, though deficient, stock of physical capital.

Abrupt removal of trade protection, elimination of export subsidies, restriction of imports credit, lack of investment credits, and discriminatory taxes would destroy basically viable state-owned enterprises. In many instances these critical constraints are imposed by the foreign lenders. According to the authors shocktherapists perceive managers of state-owned enterprises as members of the former nomenclatura, crooks or incompetents, and any attempt to salvage some of the physical and human capital under continuing public ownership amounts to a waste of effort and resources. Possible economic and social consequences of privatization should be taken into account and compared to other alternatives. Post-restructuring privatization could be an option, if asset prices drop too low as a result of little domestic saving and high- risk premiums (factored in by potential private investors).