کامبیز هژبر

Economic reforms require a comprehensive and detailed strategy to specify when and how policy reforms should be applied. Since economic reforms are comprised of different measures such as price liberalization, privatization, trade and foreign currency reform, restructuring of enterprises and etc., the sequence of these policies should be specified, and must be determined how fast each of these policies should be followed. Unfortunately, lack of statistical evidence has hindered a strong evidence-based analysis. In this research, the indicators of economic reforms, provided by the European Bank for Reconstruction and Development (EBRD) in 8 sectors and 29 transition economies over 24 years, have been analyzed through a panel data model with EGLS method. As for the sequence of policies, it is determined that the price liberalization and the small enterprises’ privatization (rather than large ones) are the most important parts of the economic reforms to achieve economic growth. However, as for the speed of adjustments, the results indicate that speeding up price liberalization and privatization lead to slow economic growth, whereas accelerating the reforms in trade and foreign exchange policies, and also stepping up the restructuring of firms, promote economic growth.

The main challenge of developing countries is to achieve growth and development. The extant economic growth literature illustrates that the quality of institutions and social infrastructure are important factors that influence the economic growth and development. Accordingly, many analysts believe that regarding such institutional factors, the rule of law is one of the most prominent aspects necessary for a system to achieve investment and economic growth. This study aims to investigate the impact of institutional variables on economic growth in developed and developing countries for the period 1995-2015. To this end, Panel Smooth Transition Regression (PSTR) model has been used. The estimation results of model reject the linearity hypothesis, and estimate a model with two regimes that proposes a threshold at institutional quality indicators of 0.1627 and 0.625 for the countries under study. It is demonstrated that the factor of rule of law has a positive impact on economic growth; however, this impact is higher in the second regime. The results also show that in both regimes, the variables of institutional quality indices, economic freedom, human capital and other control variables have a positive effect on economic growth. Moreover, the intensity of the variables influencing the changes in both groups intensifies when institutional quality improves.