32190 - Economics of Transition in South East Europe

Course contents

With the involvement of prof. Carolyn Kadas

This is a comparative study of Southeast European countries' economic transition since the 1980s. The course begins by examining the basic features of the Yugoslav economy prior to the 1990s, the system of work self-management and Yugoslavia's international economic relationships. We will then analyze the Markovic reforms and their reciprocal influence on other east European reform movements. Economic aspects of the break-up of Yugoslavia will be studied, with a focus on the effects of war, sanctions, and the role of foreign aid during the 1990s. The social effects of transition will be analyzed, namely unemployment, the informal economy, emigration, remittances, and the transition of social welfare systems. The various stages of the region's EU integration will be studied, focusing on the effects of this process on economic growth and future prospects. We will study trends in foreign direct investment (FDI) in the western Balkans, comparing them to trends in the EU's new member states, and we will study the prospects for regional economic integration. We will study the phenomena of dollarization in western Balkan countries and its consequences for these economies. Finally we will analyze the effects of the global economic recession on the region, again comparing these to trends in the new member states of the EU.

Pre-requisites: A basic understanding of economics is desirable but not necessary

Teaching method

Lectures outlined in Power point presentations with abundant class participation

Research paper and presentation

Original 7000-8000 word research paper and 10 minute oral presentation (optional power point) on a topic chosen from the themes we will be covering in class.

Grading system

Research paper and presentation: 90%, class participation: 10%

Core Textbook:

Bartlett, William. Europe's Troubled Region: Economic Development, Institutional Reform and Social Welfare in the Western Balkans(Routledge 2008).

(Reading list to be completed)

Lecture 1: Introduction

• Defining macro-economic terms
• Basic features of Yugoslav economy prior to 1990s

Lecture 2: Markovic reforms

Lecture 3: Break-up of Yugoslavia and beginning of transition to market economic systems

Lecture 4: Economic recovery, sanctions, role of foreign aid

Lecture 5: Social effects of transition

Lecture 6: EU integration

Lecture 7: Foreign direct investment, regional economic integration

Lecture8: Effects of global economic crisis on SEE (1)

Lecture 9: Effects of global economic crisis on SEE (2)

Lecture 10: Student presentations

Selected reading:

• Vienna Institute for International Economics – (Wiener Institut fuer Internazionale Wirtschaft) WIIW, http://www.wiiw.ac.at
• Štiblar, F. The Impact of the Global Crisis on Montenegro and the Western Balkans, CBM, Podgorica, 2009
• Lampe John.Balkans in to Southeastern Europe, Palgrave, MacMillan, 2006
• Myant, Martin and Jan Drahokoupil, Transition Economies: Political Economy in Russia, Eastern Europe, and Central Asia. Blackwell-Wiley, 2010
• Aslund, Anders, How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia and Central Asia. Cambridge University Press, 2007
• Kornai, Janos, The Socialist System: The Political Economy of Communism. Princeton: Princeton University Press, 1992
• EBRD (European Bank for Reconstruction and Development) Transition Report, 1996-2012
• EBRD Working papers. http://www.ebrd.com/pubs/econo/series/wp.htm
• Roland, Gerard. Transition and Economics. MIT Press, 2000
• Lavigne, Marie. The Economics of Transition: From Socialist Economy to Market Economy. St. Martin's Press, 1999
• EIU, Economies in transition: Eastern Europe and the former Soviet Union, Regional overview (quarterly report)
• Pacek, Nenad and Daniel Thorniley, Emerging Markets, lessons for business success and the outlook for different markets, The Economist, 2004 and 2007 editions
• William Davidson Institute, University of Michigan. Working Papers http://ideas.repec.org/s/wdi/papers.html
• World Bank newsletter Beyond Transition, http://newsletters.worldbank.org
• Many of the recent articles on transition economies are published in the following journals: Journal of Comparative Economics, Comparative Economic Studies, Economics of Transition

Teaching methods

Lectures outlined in Power point presentations with abundant class participation

Assessment methods

Research paper and presentation

Original 5 page (2,500-3,000 words) research paper and 5-10 minute oral presentation (optional Power Point) on a topic chosen from the themes we will be covering in class.

Final Exam Written, 3-hour exam. 5 essays chosen from a total of 7 essay questions.

Grading System Class participation: 20%, Research paper and presentation: 30%, Final Exam: 50%