Given that 60 per cent of the global workforce is in the informal sector, this article develops a typology that classifies economies according to, firstly, where different countries sit on a continuum of informalization and, secondly, the character of their informal sectors. This is then applied...

This paper shows why some countries are trapped in an equilibrium with high unofficial economic activity and corruption while other countries are not. The potential for different outcomes follows directly from the complementary nature of unofficial economy and corruption activity

The paper tries to explain the increase in inequality that occured in all transition economies by constructing a simple model of change in composition of employment during the transition. The change consists in the "hollowing-out" of the state-sector middle class as it moves either into the...

Since the beginning of transition to market economy, inequality has increased in all transition countries. The factors driving inequality up: increasing wage inequality (as workers move from a relatively egalitarian state sector to a less equal private sector), and the rising share of income...

The paper discusses recent changes in central bank laws and the relationship between inflation and central bank independence in transition economies. Two indices of legal independence are constructed, covering political and economic aspects of independence. Most of the countries experienced...

This paper examines determinants of privatization in transition countries. Empirical studies of privatization are few and even fewer formal empirical analyses of privatization in transition countries exist. Another goal is to examine differences between large scale and small scale privatization....

Growth empirics with institutional measures is performed for 25 transition countries overthe period 1990-95. Estimation results suggest that (particularly state) institutions aresignificant for growth and, especially, foreign direct investment (FDI), the latter in turnbeing important for the...

We consider a continuum of agents in a transition country where the transfer of property rights has occurred. The transition is in progress and the nature of the government's future policies is unknown to the agents. Agents believe that the present government can evolve into one of two types: a...

This paper argues that even temporary barriers to entry present at the very beginning of transition may lead to permanent extortion development. Entry restrictions, if binding, lead to excess profits, which create an incentive to extort. The emergence of extortionists reduces the expected profit...