Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

June 2000 - This study of trade flows among and between nine Russian regions and 14 republics of the former Soviet Union shows a bias toward domestic trade in the reform period that is primarily the result of tariffs. In addition, old linkages - such as infrastructure, business networks, and production and consumption chains - have limited the reorientation of trade. Djankov and Freund study the effects of trade barriers and the persistence of past linkages on trade flows in the former Soviet Union. Estimating a gravity equation on trade among and between nine Russian regions and 14 former Soviet republics, they find that Russian regions traded 60 percent more with each other than with republics in the reform period (1994-96). By contrast, the Russian regions did not trade significantly more with each other than with republics in the prereform period (1987-90). The results suggest that the bias toward domestic trade in the reform period is primarily the result of tariffs. In addition, past linkages - such as infrastructure, business networks, and production and consumption chains - have limited the reorientation of trade. This paper-a product of the Financial Sector Strategy and Policy Department-is part of a larger effort in the department to promote economic liberalization.

LTC --- M1 --- Reform --- Roads and Highways --- Transport --- VD --- ZDV --- Armenia --- Azerbaijan --- Belarus --- Estonia --- Georgia --- IRU --- Latvia --- Lithuania --- Moldova --- Tajikistan --- Turkmenistan --- Ukraine --- Uzbekistan

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The author studies the persistence of inequality and inefficient governance in a physical capital accumulation model with perfect information, missing credit markets, and endogenous barriers to entry. When access to investment opportunities is regulated, rent-seeking entrepreneurs form coalitions of potentially varying size to bribe a regulator to restrict entry. Small coalitions run short of resources, while large coalitions suffer more severe free-rider problems. The distribution of wealth thus determines the equilibrium coalition structure of the economy and consequently the level of regulatory capture. A dynamic analysis supports the persistence of inefficiencies in the long run. Initial conditions determine whether the economy converges to a steady state characterized by efficient governance and low levels of inequality, or a path toward an institutional trap where regulatory capture and wealth inequality reinforce each other. This paper-a product of the Poverty Team, Development Research Group-is part of a larger effort in the group to understand the determinants of institutions.

Agents --- Bargaining --- Consensus --- Corruption --- Entry --- GDP --- Gi --- Index --- Institutional Change --- Iru --- Licensing --- Ms --- Nature --- Production --- Roads and Highways --- Supply --- Transport --- Vd --- Vdu --- Wealth --- Wealth Constraints --- Zdv