Shahid Yusuf, Globalization and the Challenge for Developing Countries, WPS 2618, June 2001, 46 pp.

David Coady, Xinyi Dai, and Limin Wang, Community Programs and Women’s Participation: The Chinese Experience, WPS 2622, June 2001, 37 pp.

Elena Ianchovichina and Will Martin, Trade Liberalization in China’s Accession to the World Trade Organization, WPS 2623, June 2001, 35 pp.

To order: Lili Tabada, room MC3-333, tel.: 202-473-6896, fax: 202-522-1159, email: ltabada@worldbank.

Varun Gauri, Are Incentives Everything? Payment Mechanisms for Health Care Providers in Developing Countries, WPS 2624, June 2001, 20 pp.

George R. G. Clarke, Bridging the Digital Divide: How Enterprise Ownership and Foreign Competition Affect Internet Access in Eastern Europe and Central Asia, WPS 2629, July 2001, 27 pp.

Roberto Rocha and Dimitri Vittas, Pension Reform in Hungary: A Preliminary Assessment, WPS 2631, July 2001, 29 pp.

To order: Lynn Gross, room H6-148, tel.: 202-473-7030, fax: 202-522-0005, email: lgross@worldbank.

Hungary’s pension reform package has been largely successful, significantly reducing imbalances in the pay-as-you-go system and the implicit pension debt while introducing a mandatory, funded, privately-managed pillar that seems to be operating fairly well despite initial problems in the payment and registration systems and some regulatory weaknesses. Roughly half the labor force joined the new system voluntarily. Most who switched were younger than 40. The voluntary switching strategy achieves the same outcome as a forced switch based on an arbitrary cutoff age, while preventing legal problems and helping to reduce the implicit pension debt. However, it does leave a few individuals worse off, a problem that a well-designed public information campaign could ease.

Harry G. Broadman and Francesca Recanatini, Where Has All the Foreign Investment Gone in Russia? WPS 2640, July 2001, 29 pp.

Not only has Russia had a poor record of attracting foreign direct investment (FDI) since the advent of reform in the early 1990s, but close to 60 percent of FDI goes to four western regions—Moscow City, Moscow oblast, St. Petersburg, and Leningrad oblast—that account for only 22 percent of Russia’s GNP and 13 percent of the population. Only two of Russia’s 85 other regions account for more than 2.5 percent of the country’s FDI, and most account for much less. Factors associated with market size, infrastructure development, and the policy environment seem to explain much of the observed variation in FDI flows to different regions in Russia.

Harry G. Broadman and Francesca Recanatini, Is Russia Restructuring? New Evidence on Job Creation and Destruction, WPS 2641, July 2001, 33 pp.

Russia’s labor market has taken few, limited steps toward becoming more flexible and competitive. Evidence from case studies—based on more than 50 site visits in 2000—suggests that jobs have been destroyed, but only to a limited degree in some sectors and regions, largely because of institutional and incentive constraints and a still widespread "socialist" corporate culture. Jobs have been created—particularly in sectors where devaluation had the most pronounced effect on import substitution and export promotion—but only slowly, mostly because of the lack of skilled workers and limited regional mobility. Labor turnover appears to be higher within regions than across regions. Official data for 1996–99 covering about 128,000 enterprises nationwide indicate that the typical firm has experienced only modest downsizing in the number of employees: about 12 percent. Smaller firms have entered some sectors and larger, mature businesses have exited. Except for a lull in 1998, the rate of job creation has increased steadily and the rate of job destruction has declined, dropping substantially in 1998–99. "Voluntary" worker separations remain the main—and growing—form of layoffs, and the proportion of layoffs through redundancies is shrinking, and now accounts for about 4 percent of total separations.

Ilker Domaç, Kyle Peters, and Yevgeny Yuzefovich, Does the Exchange Rate Regime Affect Macroeconomic Performance? Evidence from Transition Economies, WPS 2642, July 2001, 65 pp.

Bartlomiej Kaminski and Beata K. Smarzynska, Foreign Direct Investment and Integration into Global Production and Distribution Networks: The Case of Poland, WPS 2646, July 2001, 27 pp.

Yan Wang and Yudong Yao, Sources of China’s Economic Growth, 1952–99: Incorporating Human Capital Accumulation, WPS 2650, July 2001, 24 pp.

Between 1978 and 1999, a period of reform, the accumulation of human capital in China—as measured by average years of schooling for the population age 15 to 64—was quite rapid and contributed significantly to growth and welfare. Considering China’s need for an innovation-based knowledge economy, the recent declining rate of human capital accumulation is cause for concern. Funding for basic education is unevenly distributed and is insufficient in some poor regions.

Shaohua Chen and Yan Wang, China’s Growth and Poverty Reduction: Trends between 1990 and 1999, WPS 2651, July 2001, 24 pp.

Graciela Kaminsky and Sergio Schmukler, Emerging Markets Instability: Do Sovereign Ratings Affect Country Risk and Stock Returns? WPS 2678, September 2001, 34 pp.

Paul Collier and Jan Dehn, Aid, Shocks, and Growth, WPS 2688, October 2001, 21 pp.

Jyotsna Jalan and Martin Ravallion, Household Income Dynamics in Rural China, WPS 2706, November 2001, 28 pp.

Czech Republic: Enhancing the Prospects for Growth with Fiscal Stability, October 2001, 120 pp.

Because of its worsening fiscal situation, the Czech Republic has to undertake fiscal retrenchment, which would permit the expansion of private demand without putting undue pressure on interest rates and/or on the external current account. Adjustments should be made on the expenditure side rather than on the revenue side. However, correcting expenditure flows will present challenges in such areas as bank restructuring, social protection, health, education, transport, and housing.

Poland’s Labor Market: The Challenge of Job Creation, October 2001, 96 pp.

Carmela Martin, Francisco J. Velazquez, and Bernard Funck, European Integration and Income Convergence: Lessons for Central and Eastern European Countries, Technical Paper 514, August 2001, 40 pp.

Yair Baranes and Ronald C. C. Cuming, The Albanian Collateral Law System Handbook, November 2001, 286 pp.

The Albanian economy clearly needs more access to development capital if it is to progress and expand. Though international private and public lenders can be of some assistance, much of this capital must come from private domestic sources. However, those supplying it would need some assurance that their loans or grants of credit would be repaid. The state of the law is one of the most important factors in risk assessment and management. This book describes the Albanian collateral law system and details,how recent changes in the law can facilitate and encourage secured financing in Albania.

Carl J. Dahlman and Jean-Eric Aubert, China and the Knowledge Economy: Seizing the 21st Century, World Bank Institute Development Study, October 2001, 200 pp.

Merlinda Ingco and L. Alan Winters, (eds.), Agricultural Trade Liberalization in a New Trade Round: Perspectives of Developing Countries and Transition Economies, World Bank Discussion Paper 418, September 2001, 172 pp.

Jane Malme and Joan Youngman, (eds.), The Development of Property Taxation in Economies in Transition: Case Studies from Central and Eastern Europe, October 2001, 112 pp.

Transition—The First Ten Years: Analysis and Lessons for Eastern Europe and the Former Soviet Union, November 2001, 150 pp.

World Development Report 2002: Building Institutions for Markets, a copublication of the World Bank and the Oxford University Press, September 2001, 256 pp.

Vladimir Benacek, The Generic Private Sector in an Economy of Transition: Developments and Impacts on the Czech Economy, IR-01-046, October 2001, 63 pp.

Zoltán Ákos Kovács, Saving, Investment, and Growth: Catching-Up of Central and Eastern European Countries to the EU, IR-01-040, September 2001, 64 pp.

To order: Transformation, Integration, and Globalization of Economic Research, ul. Jagiellonska 59, 03-301, Warsaw, Poland, tel.: 48-22-519-2108, fax: 48-22-814-0870, email: tiger@tiger.edu.pl, Internet: http://www.tiger.edu.pl.

Grzegorz W. Kolodko, Globalization and Transformation: Illusions and Reality, Working Paper Series (WPS), no. 1, January 2001, 33 pp.

The globalization of economic relationships and the systemic transformation of postsocialist countries are inter-related processes and a characteristic of the turn of the century. Globalization, that is, the institutional integration of national and regional markets into a single worldwide entity, is neither restricted to the last few decades, nor is it, as yet, an irreversible, let alone a complete, process. Even in its most advanced form it does not prevent nations from conducting economic policy whose quality is essential for their economic efficiency and growth rate. In contrast, the market transformation of postsocialist economies and their integration into the world economy along capitalist lines is irreversible, precisely because of globalization. The transformation will soon be complete, unlike globalization, because the latter, as a dynamic, open-ended process, has no end, just as there is no end to socioeconomic development.

Stanislaw Flejterski, E-Finance and Macro-, Mezzo-, and Microeco-nomics: An Introduction to Costs and Benefits Analysis, WPS no. 2, March 2001, 17 pp.

The phenomenon of "e-finance," just like the "new economy," "e-commerce," or "e-business," is at a nascent stage. The current universal surge of globalization in the financial sector has been sparked by a combination of factors led by the Americanization of the world system. The process of e-finance is not a panacea in itself: it is a necessary, but insufficient, mechanism for development and growth. From the perspective of postcommunist countries, including Poland, the so-called new economy, e-commerce, e-business, e-finance, and so on could pose a serious threat, delegating them to secondary, or even marginal, status. However, under certain circumstances they can also present tremendous opportunities. The Internet can become an engine of economic growth in Poland. The following are some of the most important issues that countries striving to lay the foundations for a healthy e-economy should consider:

Witold Matecki, The Risk of Currency Crisis in Poland, WPS no. 3, March 2001, 20 pp.

Grzegorz Wojtowicz, Monetary Policy: Goals, Conditions, and Limitations, WPS no. 4, April 2001, 15 pp.

Jan Woroniecki, New Economy: Illusion or Reality? Doctrine, Practice, and the OECD Perspective, WPS no 5, May 2001, 38 pp.

Marcin Piatkowski, Leveraged Buyouts in Poland, WPS no. 7, June 2001, 46 pp.

Grzegorz W. Kolodko, The "New Economy" and Old Problems: Prospects for Fast Growth in Postsocialist Countries, WPS no. 9, June 2001, 19 pp.

László Csaba, Russia’s Political Economy 1, WPS no 11, June 2001, 11 pp.

Can Russia’s recovery be sustainable? If oil prices remain high, growth will continue, albeit slowly. According to United Nations statistics, Russia’s GDP is still about two-thirds of its pre-1989 level, thus the potential for quasi-automatic recovery is substantial. Slow and steady institutional improvements are conceivable. A state dominated by oligarchs may well be replaced by a system of oligarchs, nominated and dominated by the state. Insider dominance continues to be an overriding characteristic of Russian capitalism.

If International Monetary Fund and World Bank involvement were the dominant, or at least the most visible, channels in the early 1990s, this period is clearly over. Russia is more likely to be involved and included through such organizations as the Group of Eight, the Paris and London Clubs, or KFOR. Membership in the World Trade Organization is an attainable target that may help formalize reform measures, particularly in the trade sector. Involvement in various organizations that define good banking standards and fiscal, accounting, and disclosure practices may slowly, but steadily, help Russian reformers to change the socioeconomic environment.

Grzegorz W. Kolodko, 2025: Two Histories of Economic Growth, WPS no. 12, September 2001, 22 pp.

Ewa Okon-Horodynska, Education and the Ability to Function in the Global System, WPS no. 13, October 2001, 19 pp.

Andrzej K. Kozminski, Masters and Craftsmen in Management, WPS no. 14, November 2001, 18 pp.

Paul Dax, József Fucksó, Péter Krajner, and Gábor Ungvári, Public Grants and Private Investment in Solid Waste Management—Alföld, Hungary, Discussion Paper no. 19, Open Society Institute, 2001, 88 pp.

The authors’ research confirmed the hypothesis that, on the whole, government programs fostered inefficiencies in landfill development, both in terms of cost effectiveness and location pattern, and that the programs have not been accompanied by overall modernization and enhancement of waste management services. The government program, which favors small and poorer towns often in the operating area of private landfills, cuts into the potential market of private operators and has inhibited the regionalization of waste management.

Herman W. Hoen, (ed.), Good Governance in Central and Eastern Europe: The Puzzle of Capitalism by Design, Edward Elgar Publishing, September 2001, 168 pp.

Kataryna Wolczuk, The Moulding of Ukraine—The Constitutional Politics of State Formation, Central European University Press, 2001, 250 pp.