Economics of transition

Aims of the course

The purpose of the course is to provide the students with a thorough understanding of the path-dependent economic development, where common socialist legacy provided many similarities in the business environment. The path dependency is especially relevant in the SEE region, especially former Yugoslavia, where in addition to common socio-economic system roots also common historical and cultural elements provide a strong binding feature.

Course syllabus

The course ‘Economics of transition’ focuses on the analysis of the past and present economic performance as well as future development challenges in economies of transition, with the focus on the South-Eastern Europe (SEE).

The course will comprise two major parts. The first will be common, providing a summary analysis of the economic development in transition countries. The starting point of this part of the course is the analysis of the socialist period, which defined the common initial conditions for transition. This introductory discussion is followed by the analysis of the transition process itself. Transition was a divergent process because of the differing approaches (gradual vs. shock therapy) as well as (especially SEE region) also lags due to political and nationalistic tensions. Nonetheless, transition economies shared a number of similarities during the high-growth period, just before the crisis. In addition, the EU accession was/is the major polit-economical goal, already successfully fulfilled by the majority of non-FSU countries, with the exception of the majority of former Yugoslav economies. While EU is one of the major economic growth factors and political goals, other factors of future growth and competitiveness in SEE economies will be dealt with: success of structural reforms (especially those concerning the labour market), favourable business environment, FDI and trade. Finally, two pressing groups of issues the transition countries are currently facing will be addressed in a systematic way: (1) financial crisis and (2) future growth sources and challenges, including the role of industrial policy.

The second part of the course will focus on the former Yugoslav economies. The purpose of the second part of the course will be to provide country specifics in terms of their past transition development experience as well as current situation and main future challenge overview. Economic development perspective will be linked also to broader with ‘doing business and cultural’ aspects, providing the students with an in-depth understanding of the region and main ‘doing business’ characteristics. Three sub-regions will be carefully analysed: Republic of Srbska, Federacija BiH (both part of Bosnia and Hercegovina, but very culturally different) and Montenegro. In all cases, lectures will provide first a detailed overview of the country-specific economic development at macro level, followed by relevant corporate developments. Country experts will be included to provide the best possible overview.

Course director(s)