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This paper examines how institutional conditions in transition economies compare with those in the rest of the world using various indicators of governance. The focus is on the countries in Central and Eastern Europe and the former Soviet Union but, when possible, transition countries, in Asia and Africa are also considered. The main findings are that transition economies, as a group, are no longer distinguishable from other economies, but at the same time, there are large differences in institutional performance within the group of transition economies. A formal cluster analysis is conducted in order to map transition economies into homogeneous groupings of countries. The results of this analysis highlight that transition economies are found at all clusters (from best to worst institutional performers) and also that a group of five countries, all of which are EU accession countries, appear to have “graduated”: when taking into account their level of income, their institutional conditions are no longer distinguishable from those in the most advanced industrialized countries.

Macroeconomics --- Socialist Systems and Transitional Economies: Political Economy --- Property Rights --- Personal Income, Wealth, and Their Distributions --- Personal income --- National accounts --- Income --- Czech Republic

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Like most transition economies, Bulgaria, Lithuania, and Mongolia suffered severe banking crises, which had to be resolved before growth could resume. The macroeconomic and institutional failings that led to these crises are described, and parallels are drawn with the causes of banking crises in industrial and developing countries. Resolving the crises proved technically and politically difficult, and setbacks occurred. Successful resolution required the implementation of a comprehensive and decisive strategy, involving thorough-going bank restructuring, heavy fiscal costs, and institutional and legal reforms.

Banks and Banking --- Financial Risk Management --- Money and Monetary Policy --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Socialist Systems and Transitional Economies: Political Economy --- Property Rights --- Socialist Institutions and Their Transitions: Financial Economics --- Financial Crises --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Banking --- Economic & financial crises & disasters --- Monetary economics --- Finance --- Commercial banks --- Deposit insurance --- Banking crises --- Monetary base --- Financial institutions --- Financial crises --- Loans --- Money --- Banks and banking --- Crisis management --- Money supply --- Bulgaria

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Focusing on Low-Income Countries, we investigate the behavior of fiscal variables during and after elections. The results indicate that during election years, government consumption significantly increases and leads to higher fiscal deficits. During the two years following elections, the fiscal adjustment takes the form of increased revenue mobilization in trade taxes and cuts to government investment, with no significant cuts in government consumption. Using a new dataset on national fiscal rules and IMF programs, we find that both the presence of fiscal rules and IMF programs help dampen the magnitude of the political budget cycle in LICs. We conclude that elections not only imply a macroeconomic cost when they take place but also trigger a painful fiscal adjustment in which public investment is largely sacrificed.

Fiscal policy --- Elections --- Electoral politics --- Franchise --- Polls --- Political science --- Politics, Practical --- Plebiscite --- Political campaigns --- Representative government and representation --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Political aspects --- Economic aspects --- Government policy --- Budgeting --- Macroeconomics --- Public Finance --- Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior --- Fiscal Policy --- Political Economy --- Socialist Systems and Transitional Economies: Political Economy --- Property Rights --- Taxation, Subsidies, and Revenue: General --- National Government Expenditures and Related Policies: General --- National Budget --- Budget Systems --- Public finance & taxation --- Budgeting & financial management --- Fiscal rules --- Revenue administration --- Expenditure --- Budget planning and preparation --- Public financial management (PFM) --- Revenue --- Expenditures, Public --- Budget --- United States