Creating a Supportive Environment for Business Enterprise and Economic Growth: Institutional Reform and Governance

Morning Session: Market Institutions and Economic Performance

10.00 hrs.

Session I:

Public and corporate governance - the institutional foundations of the market economy

Author:

- Professor William Lazonick, University of Massachusetts Lowell and INSEAD (The European Institute of Business Administration)

This session will focus on the basic responsibilities of the state in creating and sustaining the institutional framework of a market economy; on the importance of a competent, honest, transparent and effectual public administration; on the role of public governance in promoting economic stability and a favourable climate for fixed investment; and on effective corporate governance as a prerequisite for economic restructuring and growth. The paper would present a critical assessment of current thinking on these matters and, in particular, its relevance to effectual policy design.

Discussants:

- Victor Polterovich, Central Economics and Mathematics Inst., Moscow

- Eugen Jurzyca, Institute for Economic & Social Reforms, Bratislava

11.30 hrs.

Session II:

Institutional change and economic performance in the transition economies

Author:

- Professor Paul Hare, Heriot-Watt University, Edinburgh

This session will review and evaluate the actual developments in institution building and reform since the early 1990s in the transition economies, discuss why some countries appear to have moved further ahead than others, and assess the extent to which the different institutional frameworks have contributed to economic growth and structural change in Eastern Europe and the CIS countries. Policy issues to discuss include how to introduce effective competition policies, the possibilities for investment promotion, and the scope for industrial policy.

Discussants:

- Danica Popovic, Belgrade University

- László Csaba, Central European University, Budapest

13.00 hrs.

Lunch break

Afternoon Session: Tackling Institutional Failure

15.00 hrs.

Session III:

Corruption in economic transition and development: grease or sand?

Author:

- Professor Shang-Jin Wei, Harvard University and Brookings Institution

This session will explore the role that malfunctioning and missing institutions play in slowing down economic growth and structural change; review and evaluate the various channels through which corruption can affect economic growth (e.g. multinational activity, trade openness, and local entrepreneurship); and assess the extent to which corruption is slowing down the economic transformation of Eastern Europe and the CIS countries. Further issues explored in the paper include the relationship between corruption and the composition of foreign direct investment and the causal link between economic growth (and poverty) and malfunctioning and missing institutions.

Discussants:

- Krassen Stanchev, Institute for Market Economics, Sofia

- Ivo Bicanic, University of Zagreb

16.30 hrs.

Session IV:

Governance and Corruption in Transition: The Challenge of Subverting Corruption

Authors:

- Professor Antoni Kaminski, Polish Academy of Sciences and

- Professor Bartlomiej Kaminski, University of Maryland

This session will review and evaluate the different strategies for controlling corruption and improving governance; explore the linkage between economic policy and grand corruption; and examine ways of providing transparency and accountability of government expenditures. The paper will also explore the relationship between malfunctioning and missing institutions and legitimacy of the State. Finally, it is also important to discuss what methods should be used for evaluating the anticorruption strategies.

Discussants:

- Mark Pieth, University of Basle

- Jorge Braga de Macedo, President of the Development Centre, OECD, Paris