493. Market-Oriented Structural Reforms and Human Development: Evidence from Transition Economies

Antonio Carvalho, Matthew Cable, Rabindra Nepal & Tooraj Jamasb, School of Economics Discussion Paper No. 493 October 2013, School of Economics, The University of Queensland. Australia.

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Abstract

Market based reforms are expected to result in both higher economic growth and development. This paper studies the impact of reform of economic institutions and infrastructure sectors on the economic, educational and health dimension of human well- being among 25 transition economies. We use a panel data for the 1992-2007 periods and the LSDVC technique to analyse the effects of market-driven reforms on the Human Development Index (HDI) and reform packages using EBRD transition indicators. The results show that institutional economic reforms led to positive economic effect and significant impacts on other dimensions of human development. On the other hand, we find limited positive impact from infrastructure sectors reforms. However, not every aspect of reforms appear to generate positive impacts as the transition process is rather complex. For example, large scale privatizations seem to have had negative effects in health and economic outcomes. The results point towards the importance of the interaction among and the combined effect of different reform measures.