Title VIII Research

Department of State Title VIII Grant

The Davidson Institute, through the continued funding support of the Department of State's Title VIII Research and Training on Eastern Europe and the Independent States of the Former Soviet Union, has administered the research competition "Public Policy and Business Practices Affecting the Development of Markets in CEE and Eurasia" for the past five consecutive years.

• 2004 Grant Cycle
• 2003 Grant Cycle
• 2002 Grant Cycle
• 2001 Grant Cycle
• 2000 Grant Cycle

In its first year of this competition, the Davidson Institute received $170,000 in funding. We received seven applications for research in the NIS, and eight applications for research in Central and Eastern Europe. From these applications, the selection committee awarded two grants for projects focused on Central Asia and the Caucasus and another two grants for research on the Balkan countries.

Project: "Economic Consequences of Regional Instability in Slovenia, Croatia, and Macedonia"

This project measured the welfare costs of regional instability on the economies of Croatia, Macedonia and Slovenia. These costs included the direct costs of reduced trade and investment and indirect costs that make themselves felt through financial channels. Losses were measured over individual crises, in relation to "news" regarding crises, and over the entire period since the breakup of Yugoslavia. Implications for the development of the business sector and policy were explored. The grantee authored two working papers based on the findings in this proposal.

WP 728: A Note on Transition, Regional Conflict and Instability and the Volume of International Trade

By: Josef C. Brada and José A. Méndez

The process of transition in Eastern Europe and the former Soviet Union saw a remarkable collapse of trade among the countries in the region followed by a remarkable expansion of their trade with the West. As the trade of these transition economies collapsed it is difficult to judge whether, and by how much, the current trade of the transition economies exceeds the trade that they had as socialist economies. At the same time, some of the transition economies, particularly in the Balkans, have suffered from major political disruptions either of domestic origin or stemming from inter-ethnic strife. Whether some transition economies suffer from a low volume of trade because of poor success with transition policies or because of internal or external disruptions to their commerce is important for our understanding of their economic performance.

WP 729: Political Instability in the Balkans and the Shortfall In Foreign Direct Investment: Extent and Consequences

By: Josef C. Brada, Ali M. Kutan, and Taner M. Yigit

In the past decade there has been a large upsurge in foreign direct investment (FDI) within the transition economies of Eastern Europe. These inflows have been dramatic both because of their dynamism and because FDI had important consequences for the transition process as well as these countries' economic performance. However, distribution of FDI in these transition economies has been highly uneven, and the timing has been sensitive to political events in the individual countries. This paper will provide some estimates of how much of the underperformance of the Balkan transition economies in attracting FDI is due to the economic characteristics of the individual countries in both their economic structure and the reform policies implemented by their governments.

Project: "The Determinants of Business Performance During Reform: A Panel Study of Bulgarian Establishments"

This project allowed for an additional wave of data for a stratified random sample of 497 firms to be gathered and merged with annual data from the same firms and mangers for 1989 through 1996. The acceleration in reforms since 1997 allowed testing of hypotheses that could not be examined earlier when economic reform was limited. This large and long panel for heterogeneous enterprises (e.g. with variation in ownership, human resource policies, competitive pressures and managerial tenure) enabled rigorous evidence on diverse hypotheses concerning the determinants of business performance and survival to be provided.

WP 560: Choice of Ownership Structure and Firm Performance: Evidence from Estonia

Derek C Jones, Panu Kalmi and Niels Mygind

Using data for a representative panel of Estonian enterprises to examine issues of ownership structures and ownership changes, it is determined that ownership changes are related to economic efficiency. At the same time, while employee owned firms are much more likely to change ownership categories, often employee owned firms remain inside-owned. As predicted, wealth and resource constraints play a crucial role, risk aversion explains subsequent ownership changes, and allocation of ownership depends on pre-privatization origin and location. Evidence provided in this paper, compared to more conventional approaches, is consistent with idea that efficiency changes drive ownership changes.

Project: Families in Transition: Reproduction and Health in Central Asia"

This project examined ethnic differentials in fertility and family size, socio-economic correlates of maternal health, and socio-cultural effects on child health in Kazakhstan, the Kyrgyz Republic, and Uzbekistan. This project resulted in one working paper.

WP 523:Children at Risk: Infant and Child Health in Central Asia

This paper examines trends in infant and child health in Uzbekistan, Kazakhstan and the Kyrgyz Republic. Findings highlight the social costs of transition, illustrate the importance of maternal health across the region, and assist in the identification of groups at highest risk for poor child health within individual countries.

Project: "Economic Decentralization in Kazakhstan: Market-Promoting or Market-Perverting?"

This project examined the effects of economic decentralization in post-communist states through a qualitative and quantitative analysis of tax and regulatory regimes, small and medium enterprise (SME) development, and social service provision in several regions of Kazakhstan. This project resulted in a chapter in the book and a working paper.

Chapter 6: "Economic 'Decentralization' in Kazakhstan: Causes and Consequences"

The Transformation of Central Asia: State-Societal Relations from Soviet Rule to Independence Ithaca, NY: Cornell University Press

WP 630: Economic "Decentralization" in Kazakhstan: Causes and Consequences

This paper examines the impetus for decentralization in Kazakhstan. Findings indicate that the impetus has come largely from regional governments rather than from the central government and that the state cannot be treated as either a unitary, coherent actor or an integral whole, but instead, should be viewed as a set of competing actors and institutions.