Seoul National University

Graduate School of Public Administration

Summer term 2006

 

 “Economic transformation in Central and Eastern Europe after 1989 – money, the financial sector and its regulation”

 

Dr. Bernhard Seliger

Hanns Seidel Foundation

Seoul Office

Room 501, Soo Young Bldg.

64-1, Hannam 1 Dong                             

Yongsan-Gu

Seoul 140 886

Tel. 02 790 5344

Fax. 02 790 5346

e-mail: bjseliger@yahoo.de

 

Aims of the course:

 

Economic transformation has been one of the most important changes not only for Central and Eastern Europe, but for the whole European area, in the last decade. Beginning with the breakdown of socialism in the former Soviet Union and its satellite states, it lead to a complete new economic structure in Europe, finalized by the EU enlargement, with far-reaching economic, political and administrative consequences. This course enables students to understand this transformation process, to gain insight into the concepts of transformation and their relative successes. Also, the course will enable students to gain insight into the role of foreign investment in economic change and policies to attract investment in case studies from Central and Eastern Europe.

 

Requirements:

 

Students should actively follow the discussion and read the given texts. There will be two assessments, one home-work and presentation and one written assessment at the end of the course. Throughout the course self-organized literature study is an important condition for success.

 

 

 

Reading:

 

There is no single textbook, which is used. Instead, the course uses actual material about the situation in Central and Eastern Europe (CEE) and extracts from books and journals. For the presentations, there is at least one binding text to read for all students. Students are encouraged to work with internet resources on CEE. (A reading list is currently prepared and will be available before the course.)

 

 

 

“Economic transformation in Central and Eastern Europe after 1989”

- Economic development, economic policy and foreign direct investment -

 

 

Schedule

 

1. Introduction: economic transformation after 1989 – an overview

 

2. The breakdown of socialism (1): the economic reasons

 

3. The breakdown of socialism (2): transformation strategies

 

4. Capital flows to Central and Eastern Europe – an overview

 

5. Privatization, Corporate Governance and Efficiency

 

6. The role of the state and the administration in transformation

 

7. Foreign Direct Investment and the Competitiveness of CEE

 

8. Country studies (1): Poland

 

9. Country studies (2): Hungary

 

10. Country studies (3): The Baltic States

 

11. Country studies (4): The Balkan States

 

12. Country studies (5): Russia

 

13. Transformation and Unification – the case of Eastern Germany

 

14. Eastern enlargement of the EU and economic transformation 

 

15. Examination  

 

16. Conclusion: Which lessons does the transformation process hold for CEE?

 

 

I. General Reading (recommended texts for studying transition and integration)

 

I. 1.Transition

Gregory, P.R. - R.C. Stuart, Russian and Soviet economic Performance and Structure, 6. ed., Reading et al. 1998.

Gros, D. - A. Steinherr, Winds of Change: Economic Transition in Central and Eastern Europe, New York 1995.

Hare, P.G. – J.R. Davis, Transition to the Market Economy, Critical perspectives on the world economy, 3 vols., London 1997.

Kornai, J., The Road to a Free Economy, New York 1990.

Lavigne, M., The Economics of Transition: From Socialist Economy to Market Economy, New York 1995.

World Bank, World Development Report 1996, From Plan to Market, Oxford 1996.

 

I. 2. Integration and EU enlargement

European Commission (ed.), Enlargement website of the European Commission,

http://www.europa.eu.int/comm/enlargement/index.htm.

(Official EU enlargement website. Includes links to the White Paper on Enlargement, the country surveys and progress reports on enlargement and other aspects of enlargement.)

Seliger, B., The Economics of European Integration, GSIAS, HUFS Press, Seoul 2000.

 

I. 3. FDI and FDI policy

 

IMD (ed.), World Competitiveness Yearbook, Various Years, Lausanne: IMD.

United Nations (ed.) (1999), World Investment Report 1999, Foreign Direct Investment and the Challenge of Development, New York/ Geneva: UN.

Dunning, John H., 1993, Multinational Enterprises and the Global Economy, Wokingham: Addison-Wesley

Prahalad, C.K. – Gary Hamel, 1990, The Core Competence and the Corporation, Harvard Business Review, May, pp. 71-91

Markusen, James R., 1991, The Theory of Multinational Enterprise: A Common Analytical Framework, in: Eric D. Ramstatter (ed), Direct Foreign Investment in Asia’s Developing Economies and Structural Change in the Asia-Pacific Region, Boulder, CO: Westview Press

Markusen, James R., 1995, The Boundaries of Multinational Enterprises and the Theory of International Trade, Journal of Economic Perspectives, Vol. 9, no. 2, pp. 169-189

 

 

 

II. Reading for the lectures (R = required reading; O = optional)

 

The following readings are part of this textbook and required to be studied for each weekly class.

 

1. Introduction: economic transformation after 1989 – an overview

R: Seliger, B. (2002), Institutional Competition and External Constraints of Transformation, in: Journal of International and Area Studies, Vol. 9, mp. 1, p. 103-122.

O: EBRD (2003), Transition Report 2003, London: EBRD.

 

2. The breakdown of socialism (1): the economic reasons

R: P.R. Gregory - R.C. Stuart (1998), Performance and Decline: The End of the Soviet Era, in: idem, Russian and Soviet Economic Performance and Structure, 6th ed., Addison-Wesley: Reading et al., pp. 195-242.

O: Gardner, H.S. (1998), The Political Economy of Soviet-Style Central Planning, in: idem, Comparative Economic Systems, 2nd ed., Fort Worth: Dryden, pp. 437-483.

 

3. The breakdown of socialism (2): transformation strategies

R: Gardner, H.S. (1998), Central Eurasia: Making Markets, in: idem, Comparative Economic Systems, 2nd ed., Fort Worth: Dryden, pp. 531-563.

O: Riker, W.H. – D.L. Weimer (1995), The political economy of transformation: liberalization and property rights, in: J.S. Banks – E.A. Hanushek (eds), Modern Political Economy: Old Topics, New Directions, New York: Cambridge University Press, pp. 80-107.

 

4. Capital flows to Central and Eastern Europe – an overview

R: Claessens, S. – D. Oks – R. Polastri (1998), Capital Flows to Central and Eastern Europe and the Former Soviet Union, World Bank Discussion Paper, 11/4/98, Washington, D.C.: World Bank.

O: Lankes, H.P. – N. Stern (1997), Capital Flows to Eastern Europe and the Former Soviet Union, EBRD Working Paper No. 27, 

www.ebrd.com/pubs/econ/workingp/27.pdf

 

5. Privatization, Corporate Governance and Efficiency

R: Dhanji, F. – B. Milanovic (1991), Privatisation, in: P. Marer – S. Zecchini (eds), The Transition to a Market Economy, Paris: OECD, pp. 13-43.

O: Estrin, S. (1996), Privatisation in Central and Eastern Europe, CERT Working Paper, Edinburgh: Centre for Economic Reform and Transformation.

 

 

6. The role of the state and the administration in transformation

R: Wagener, H.-J. (2000), On the relationship between state and economy in transformation, Frankfurt Institute for Transformation Studies Working Paper no. 14/2000, Frankfurt/ Oder: FIT (http://fit.euv-frankfurt-o.de/ver%F6ffentlichungen/Discussion%20Papers/PDF-Format/00-14Wagener.PDF).

O: M. Raiser (1997), Informal Institutions, Social Capital and Transition: reflections on a neglected dimension, EBRD Working Papers no. 25, http://www.ebrd.org/english/public/index.htm.

 

7. Foreign Direct Investment and the Competitiveness of CEE

R: Sohinger, Jasminka (2004), Transforming Competitiveness in European Transition Economies: The Role of Foreign Direct Investment, Berkeley: Institute of European Studies, http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1024&context=ies.

O: Meyer, K.E. (1996), Direct Investment in East Asia and in Eastern Europe: A Comparative Analysis, CIS Middle Europe Centre Discussion paper no. 34, London: LBS.

 

8. Country studies (1): Poland

R: Tiusanen, Tauni (2004), Poland – The Largest New EU Country, Northern Dimension Research Centre Publication no. 4, Lappeenranta: Lappeenranta University of Technology.

O: Jensen, C. (2000), The Impact of Foreign Direct Investment for Technological Change in Transition: the case of Poland, Paper presented at the 2nd International Conference ‘Transition and Enterprise Restructuring in Eastern Europe’, Hillerod, August 17-19, 2000,

 http://www.econ.cbs.dk/institutes/cees/workshop/pdf/2000/Jensen.pdf.

 

9. Country studies (2): Hungary

R: EBRD (2003), Strategy for Hungary, London: EBRD.

O: King, P.L. (1999), The Developmental Consequences of Foreign Direct Investment in Transition from Socialism to Capitalism: The Performance of Foreign Owned Firms in Hungary, Davidson Institute Working Paper Series no. 277, Michigan: WDI (http://www.wdi.bus.umich.edu/).

 

10. Country studies (3): The Baltic States

R: Tiusanen, Tauni (2004), The Baltic States – Successful Transition in Estonia, Latvia and Lithuania, Northern Dimension Research Centre Publication no. 5, Lappeenranta: Lappeenranta University of Technology.

O: Turku School of Economics and Business Administration (2004), Baltic Rim Economies, 3-2004, Turku: Turku School of Economics and Business Administration, http://www.tukkk.fi/pei/bre/bre_32004.pdf.

 

11. Country studies (4): The Balkan States

R: Daianu, Daniel (2000), Southeastern Europe revisited – can economic decline be stopped?, Occasional Papers no. 21, The Institute for Security Studies, WEU,

http://www.iss-eu.org/occasion/occ21.pdf.

O: Hunya, Gabor (2002), FDI in South-Eastern Europe in the early 2000s, Vienna: Vienna Institute for International Economic Studies,

http://www.oecd.org/dataoecd/52/30/1940829.pdf.

 

12. Country studies (5): Russia

R: Buiter, Willem H. (2000), From Predation to Accumulation? The Second Transition Decade in Russia, SITE Working Paper No. 156, Stockholm: Stockholm School of Economics.

O: Mikerova, Julia – Rogacheva, Elena (2003), European FDI in Russia: Corporate Strategy and the Effectiveness of Government promotion and facilitation, Belfast: OCO Consulting, http://www.ebc.ru/publications/docs/FDI_in_Russia_OCO_Sept_2003.pdf.

 

13. Transformation and Unification – the case of Eastern Germany

R: Seliger, B. – R. Wrobel (2000), German Unification: The Valuable Lessons, in: The Baltic Review, Vol. 20, pp. 8-11.

O: Seliger, B. (1999), Socio-cultural change, institutions and transition theory: some lessons from German unification, in: Zeitschrift der Koreanisch-Deutschen Gesellschaft für Sozialwissenschaften, Vol. 9, no. 2, pp. 325-351.

 

14. Eastern enlargement of the EU and economic transformation 

R: European Union (2003), Enlargement of the European Union – an historic opportunity, Brussels: European Commission,

 http://europa.eu.int/comm/enlargement/docs/pdf/historic_opportunity_2003_en.pdf.

O: Piazolo, D. (2000), Eastern Europe between Transition and Accession: An Analysis of Reform Requirements, Kiel Working Paper No. 991, Kiel: Institut für Weltwirtschaft.

 

16. Conclusion: Which lessons does the transformation process hold for CEE?

R: Meyer, K.E. (1996), Direct Investment in East Asia and in Eastern Europe: A Comparative Analysis, CIS Middle Europe Centre Discussion paper no. 34, London: LBS.

O: Richter, R. (1999), A Note on the Transformation of Economic Systems, Economic Series no. 9907, Saarbrücken: University of Saarland.