Under the Generalized Scheme of Preferences (GSP), rich countries grant unilateral trade preferences to developing countries. We study the EU’s withdrawal of GSP preferences from Belarus in 2007 to understand how the GSP a ects export patterns. The withdrawal caused a signi cant drop in trade for a ected products (26%-29% trade decline) and some trade reduction at the extensive margin. However, there is little evidence of a GSP e ect on total trade. This is due to the fact that the main exports of Belarus were not eligible for the GSP program.

This is the Final Report for the project Corporate Engagement in Fighting Corruption and Tax Evasion. The project, financed by the Nordic Council of Ministers, includes three partners: Transparency International Latvia (Delna, host organisation), Transparency International Finland and BEROC, a research institute in Minsk, Belarus. The aim is to engage entrepreneurs in fighting corruption and tax evasion, with a focus on municipal construction procurements in Latvia, Belarus and Finland.

The paper determines episodes of financial stress in Belarus during 2004-2016 period using constructed financial stress index, and offers an analytical framework to evaluate the influence of financial turmoil on Belarus's economy, in particular economic activity and monetary policy. The findings show evidence of two episodes of financial stress and two episodes of recessions in Belarus during studied period. The results from the estimated ARDL models show that high level of financial stress causes the substantial downturn in economic activity of Belarus. Moreover, the results of Toda and Yamamoto causality analysis indicate that higher financial stress in Belarus has led to lower economic activity that caused higher inflation, which in turn led to higher policy rate introduced in order to constrain inflation in Belarus. Finally, from theoretical point of view results also signify that there is no evidence for the support of the conventional wisdom hypothesis in Belarus since 2004. Therefore, price stability is not a sufficient condition to support financial stability in Belarus and should certainly be addressed independently of the objective of price stability of the National Bank of Belarus.

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%.