Global Insights and Explanations
Edited by Gary McMahon, Hadi Salehi Esfahani and Lyn Squire
Chapter 8: Explaining Economic Growth in the Commonwealth of Independent States
Gur Ofer and Richard Pomfret This chapter reports the results of ten studies on the transition and growth experience and the foundations for long-term growth of the new independent states created with the dissolution of the Soviet Union in December 1991.1 The 15 republics of the Soviet Union and their successor nation-states exhibit a huge range in size and income levels (see Table 8.1), as well as in historical and cultural backgrounds and resource endowments. Despite the variety of initial conditions, the number of countries and their shared Soviet experience provide a unique natural experiment of the effects of different approaches to establishing and organizing a market-based economy. Twelve of the Soviet successor states formed a loose successor organization, the Commonwealth of Independent States (CIS); the three Baltic countries did not join the CIS.2 Despite many agreements to maintain the common economic space within the CIS and the continued economic importance of Russia to most CIS countries, the organization has had little economic content. The CIS members do, however, have sufficient common background that they form an obvious group for comparative economic analysis, and since 1992 they have pursued diverging paths in economic strategy and policies. THE SOVIET BACKGROUND Most of the literature, especially the Western economic literature on the ‘Union of the Soviet Socialist Republics’, regarded the country as effectively one political unit with a uniform economic system, planned and ruled from Moscow and tied together in a tight web of production, supply and trade networks which ignored republican...
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