We examine the empirical relationship between the quality of corporate governance practices and economic development in an unbalanced panel of 185 countries covering 2010 through 2015. We find that corporate governance is positively associated with the FDI inflow and market capitalization, and negatively associated with the public sector employment in low-income countries. Our results also suggest that corporate governance is negatively correlated with corruption in the high-income countries. Finally, we establish the unidirectional causality running from corporate governance to economic development, and find no evidence of causal effect of economic development on corporate governance. Therefore, our results suggest that the policy makers should in the first place address the institutional transition of the countries including the implementation of best corporate governance practices to accelerate economic development in developing economies.

The paper employs the Commitment to Equity (CEQ) framework to present a first attempt at a comprehensive fiscal incidence analysis for Belarus, encompassing both the revenue and expenditures components of the fiscal system, including direct and indirect taxes, as well as direct, indirect and in-kind transfers. The analysis reveals that fiscal policies in Belarus effectively redistribute income from the top to the bottom of the income distribution. Direct transfers, in particular pensions, are the most equalizing and pro-poor of the fiscal interventions – direct transfers and direct taxes lower the national poverty headcount by 17 percentage points and lower the Gini index of inequality from 0.407 to 0.267. Some of the indirect taxes, on the other hand, are regressive, and indirect transfers – poorly targeted, such that the effect of these components of the fiscal system is not equalizing. Finally, the cost-efficiency of different parts of the fiscal system in Belarus varies considerably. Unemployment benefits, pensions and child benefits are found to be cost-efficient, while indirect subsidies are highly cost-inefficient. The analysis points towards possible reforms that would allow to reduce poverty and inequality more efficiently.

The issue of gender equality in Belarus labor market is still unclear. On the one hand the rate of female participation is high. At the same time there is evidence of the rising gender pay gap that grew from 16.5% in 2005 to 24% in 2014. The decomposition of the wage gap during 2005- 2014 time period using Oaxaca-Blinder, Juhn-Murphy-Pierce and Machado-Mata techniques revealed that differences in income function (the difference in a way efforts of men and women are remunerated) are the main factors affecting the growth of gender inequality, while the personal characteristics are losing the influencing power. The role of the factors differs depending on the quantile of income distribution. I also find no association between wages and marriage for females, while there is a 10.5% wage premium in case of married males. The parenthood wage penalty is attributed to women and equals approximately 14.4%. Moreover, children from 0 to 6 provide the most severe drop in wages. In addition, the paper reveals that educated women are suffering the most and face 20.4% decline in wages, while penalty for women with the secondary school or lower amounts to just 8%.

Inflation expectations play a crucial role for macroeconomic dynamics and more specifically for monetary environment. However, inflation expectations is an unobservable variable. So, the quality of the correspondent measure in a great extent predetermines its feasibility for macroeconomic analysis. Today, survey-based measures of inflation expectations prevail in macroeconomic analysis. However, the drawbacks and/or unavailability of such measures give a rise to other identification strategies. Extracting inflation expectations from the actual data (e.g. series of interest rate and actual inflation) basing on SVAR identification approach has become a valuable alternative/supplement for measuring inflation expectations. In this paper I show that the existing strategy of inflation expectations identification through SVAR approach is very sensitive to the state of monetary environment. When a monetary environment is unstable (e.g. high and volatile inflation), the assumptions of the baseline approach are not hold, and it produces biased estimations. I emphasize two sources of this bias in estimations and suggest procedure for obtaining unbiased estimates. My identification strategy includes a number of steps. I suggest applying Markov regime-switching framework for extracting an unbiased mean for ex ante real interest rate. Further, I use two-stage SVAR identification strategy. First, I identify an unexpected shock to actual inflation, which is crucial for obtaining a proper measure of inflation expectations. Further, I net the series of ex post interest rate from this ‘noise’. Second, I run a baseline SVAR procedure, for which I use the data adjusted at the first step. Finally I obtain an unbiased and informatively rich series of inflation expectations.

wiiw and BEROC study finds that the transition model of the past quarter century has reached its limits, and argues that policy changes are necessary if the system is to survive.

The Panel Report in Ukraine - Passenger Cars provides an opportunity to revisit an old debate over the role of safeguard measures in the WTO. With regard to the legal findings, the panel followed the established jurisprudence in this area, and found a number of violations of the Safeguards Agreement. With regard to the economics, we delve more deeply into the economic and political background of the safeguards investigation. Ukraine was hit by the economic crisis shortly after its WTO accession that significantly liberalized import tariffs on passenger cars. Next, we offer a de novo look at the injury and causation issues in this case, and discuss the challenges of an industry reliant on offshored production that sees a safeguard as a mechanism to attract FDI for production. We conclude with an assessment of the operation of the WTO’s safeguards regime, along with some tentative suggestions for reform. Overall, our examination of the economic analysis by the investigating authority and the legal review by the WTO panel raises questions about particular aspects of the domestic and WTO processes, but concludes that the system worked well in this case.