Kiel Working Papers, Kiel Institute for World Economics
No 1421:
Which Membership Matters? External vs. Internal Determinants of Institutional Change in Transition Countries
Thorsten Drautzburg, Inna Melnykovska and Rainer Schweickert
Abstract: This paper analyses potential internal and external
determinants of institutional change as measured by the World Bank
Governance Indicators (WBGI) based on a panel of 25 transition countries
for the period from 1996 to 2005. We show that natural resources and
capital inflows exert an insignificant or negative influence and that
economic policy allows to break path-dependency. Most importantly, however,
we are able to show that incentives provided by NATO membership are
important for institutional development and even more robust than variables
measuring the integration into the EU. This allows for some optimism about
the effectiveness of ENP policies and supports the argument that NATO,
offering regional security, may provide significant additional incentives
for good governance
Keywords: EU, NATO, Transition Economies, Institutional Change, Governance; (follow links to similar papers)
JEL-Codes: F15,; F20,; F50,; P20,; P30,; O19; (follow links to similar papers)
27 pages, May 2008
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