Paper to be presented at the
University of Perugia, 11 marzo 2013
Socio-economic development in
transition economies after the
fall of Berlin wall
(Institutions, Human Development and Economic Growth in Transition
Economies, Palgrave 2011)
Pasquale Tridico
Ass. Professor
Dept. of Economics - University Roma Tre
tridico@uniroma3.it
9 November 1989…the main symbol
20 years after, the financial crisis
The end of a dream?
Aim of the paper
• To analyze the development paths of Transition
economies (i.e. East European Countries and
Former Soviet Republics) which experienced a
transformation from planned economies to market
economies since the fall of Berlin wall in 1989.
• Developing an interconnected analysis of
varieties of capitalism which takes into
consideration:
– Institutional change
– Economic growth
– Human development
Main hypothesis
• Appropriate (political) institutions and socioeconomic variables such as education and health
expenditure improve the endowment of people
capabilities and lead to better human development.
• In turn, an improvement in human development
variables such as education level and life expectancy
causes an acceleration process in economic growth.
Institutions  human development  growth
The reverse of the neoclassical paradigm.
How – methodology
• Econometric exercises to test the causality hp (OLS for
28 countries)
• Following the Varieties of Capitalism literature (Amable,
2003; Jessop 2002; Amoroso 2003; Brenner 2005),
countries will be classified by taking into consideration
their main macroeconomic characteristics and
institutional variables withdrawn from the EBRD such as:
–
–
–
–
–
–
Enterprise and Privatisation
Market & Competition
Trade & Openess
Financial System
Wage Nexus
Social Investments (health and education)
How – methodology (2)
• Following this classification, I found, among
former communist economies, 5 types of socioeconomic models, i.e.:
–
–
–
–
–
competitive capitalist model
corporatist model
dirigiste model
hybrid model
state capitalist model.
I tried to test whether the type of system has an impact
on the path of development of the country, considering
both economic growth and human development.
Communist states in Eastern Europe
and the Soviet Union, 1989
Background and history of
transition
• 70s and 80s: Lower performance and
inefficiencies. ↑ gap East-West
• 1980s: Gorbachev’s Perestrojka ; Solidarnosc
• June 1989 Semi-free election in Poland and first
non-communist gvmnt (Sept. 1989)
• October-November 1989 Berlin events
• Debate on three routes for transformation:
– Social democracy (third way)
– Anglo-Saxon model ASAP (Shock therapy)  WC
– Eur Continental model Corporatist (German)/ Dirigiste
(French)
Literature and debate…
• Shock therapy vs Gradualism (Sachs 1991; Balcerowicz
1993; Nuti, 1999; Kolodko 1997; Aslund 2001)
• Institutional change, path dependency and evolutionary
theory (Matzner and Kregel, 1992, Murrel, 1992; Rodrik,
1999; Lin 2004)
• Sequence of policies and institutions (Stiglitz 1998;
Svejnar 2002; Rodrik 2004)
• International integration, Eu integration, IMF and WB
constraints; FDI (Mundell 1997, Baldwin 1993; Lavigne,
1999; EBRD)
New consensus  Institutions matter
Economic performance and
social costs in TEs
• As Kornai said (2006, p.37): the
transformation has been unique: 1) it took
place peacefully and it was an
astonishingly fast process towards
western mode of development. 2) it was
characterised by deep economic troubles.
•  successes and failures and ≠among
countries.
Gradualism vs Shock therapy
Gradual therapy: Hungary and Slovenia
Hungary
8,0
Slovenia
6,0
4,0
2,0
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
90
91
19
-4,0
19
19
-2,0
89
0,0
-6,0
-8,0
-10,0
-15%/-20% cumulate
-12,0
-14,0
GDP growth in shock therapy countries 1989-2004
15,0
10,0
5,0
0,0
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
-5,0
-10,0
-15,0
-20,0
-25,0
-30,0
-35,0
-40,0
-20%/-50% cumulate
Poland
Slovakia
Latvia
Czech Republic
Lithuania
Estonia
Delayed unstable with shock (no) therapy
Delayed reforms/shock therapy/unstable/uncoordinated/corrupted
10,0
Romania
Bulgaria
5,0
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
19
89
0,0
-5,0
-10,0
-50%/-60% cumulate twice during 1990s
-15,0
GDP growth in the Commonwealth of Indipendent States with troubles
& conflicts, badly managed, unstable shock (or no) therapy
10
CIS
5
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
19
-5
89
0
-10
-15
-20
-25
-60%/-65% cumulate during a long period in 1990s
Level of real GDP in 2004 and in 2008 (1989=100)
CEECs, Baltics,
Balkans (B&B)
Level Level
2004 2008
CIS
Level Level
2004
2008
Slovenia
Czech Republic
120
108
136,5
126,7
Russia
Belarus
77
100
97,0
134,5
Estonia
Poland
102
135
113,7
156,5
Ukraine
Kazakhstan
51
94
60,7
124,5
Hungary
Lithuania
115
84
119,6
99,8
Armenia
Turkmenistan
89
105
131,3
160,3
Slovakia
Croatia
114
91
142,4
104,8
Azerbaijan
Georgia
71
41
163,0
73,5
Latvia
Albania
83
129
98,0
154,5
Uzbekistan
Kyrgyzstan
107
75
144,8
94,2
Bosnia & Herzegovin
Serbia
57
60
78,9
81,1
Moldova
Tajikistan
41
62
57,5
91,9
Montenegro
Romania
72
92
101,1
113,2
CIS
CEECs-5 (the most
advanced)
76
116
111
131
Macedonia
78
95,7
86
107
Bulgaria
84
105,7
Other CEECs and
B&B
CEECs + B&B
96
119
All TEs
94,7
117
-5,0
La
Li tvi
th a
ua
Es nia
to
Uk nia
ra
in
Ru e
M ssia
ol
d
Ar ova
m
e
Hu nia
ng
Sl ary
ov
Cz R en
ec om ia
Sl h R an
ov
ia
ak epu
Re blic
pu
b
Cr lic
o
Bu atia
lg
ar
Se ia
r
Be bia
Bo
K
sn FY aza laru
ia R
k s
an M hst
d ace an
He d
rz on
i
e
M go a
on vin
te a
ne
G gro
eo
Ky
rg
rg P ia
yz ola
R e nd
p
Ta ubl
jik ic
ist
Al a n
Az ban
er ia
b
U
Al
zb aija
lt
ra Tur eki n
ns km sta
itio e
n
n nis
co ta
un n
tri
es
15,0
-15,0
2009. Another 1989?
GDP changes in 2009 (in %). Projections for TEs
10,0
5,0
0,0
-10,0
With the crisis, Avg GDP 2009 = Avg GDP 1989.
The current economic crisis
• The 20° anniversary similar slump as in 1989-90.
• The Baltic States, open and small economies, are
the most hit (Compet. Cap).
• Turkmenistan and Uzbekistan, (State Capitalist
economies) have high GDP rates of growth.
• Poland (1%), Albania (+1.2%), Azerbaijan (+3%),
Tajikistan and Kyrgyzstan (+0,5%) managed
relatively better the recession.
• Average rate of recession in TEs is -5.2%. In 1990,
the first year of transition for almost all TEs,
recession was about -4.6%
Social & political problems
social problems: increase in poverty, inequality, corruption, gender
discrimination, unemployment, migration, poverty among farmers
and workers, and income divergences between regions within the
same country. KOWALIK (2008)
CEECS
CEECS 5- Balkans CIS
5+
Poverty level 2008 (% pop with
13,8
27,2
25,2
52,4
$4 day)
Gini coefficient 2008
30,2
32,2
33,0
35,0
life expectancy in years, 2008
73,6
70,8
72,2
66,9
Voice & Accountability avg
1,04
0,84
0,10
-0,94
00-08
Political Stability avg 00-08
0,78
0,64
-0,49
-0,59
Freedom index 2000-08
3,0
3,0
2,5
1,4
Unemployment rate 08
14,8
11,0
22,0
6,4
Freedom house (Political rights and Civil liberties) 2008
Free (Democracies)
Czech Republic
Estonia
Hungary
Lithuania
Poland
Slovakia
Slovenia
Latvia
Bulgaria
Croatia
Romania
Serbia
Partly Free (Defective
democracies/Semiauthoritarian regimes)
Albania
Macedonia
Montenegro
Bosnia-Herzegovina
Georgia
Moldova
Kyrgykistan
Armenia
Ukraine
13 countries
Not Free (Authoritarian
regimes)
Azerbaijan
Kazakhstan
Russia
Tajikistan
Belarus
Turkmenistan
Uzbekistan
8 countries
7 countries
HDI 2008
0,859
0,776
0,757
Per capita
GDP in ppp
2008
15284
5563
6795
Russia
Vladimir Putin &Dmitry Medvedev
Russia is not an electoral democracy.
In the presidential election of March 2008,
state dominance of the media was on full
display, debate was absent, and
incumbent Vladimir Putin was able to
pass the office to his handpicked
successor, Dmitry Medvedev. A similar
issue in 2012
Source: Freedom House 2009
Autocracts: ruling presidents
• Tajikistan: President Emomali Rahmon (Rakhmonov),
1994-present
• Kazakhstan: President Nazarbayev, 1990-present
• Azerbaijan: President Heydar Aliyev, 1993-2003 (died);
President Ilham Aliyev, 2003-present
• Kyrgyzstan: President Akayev, 1991-2005 (resigned);
President Bakiyev 2005-present and civil war in 2009-10
• Uzbekistan: President Karimov, 1991-present
• Turkmenistan: President Saparmurat Niyazov, 1992-2006
(died); President Berdymukhammedov, 2006-present
• Belarus: Lukashenko
• Ukraine: Yanukovich
Institutions matter, but which ones?
• institutions and development: EBRD, WB
and Freedom House indicators are used.
• political institutions such as Freedom
index (political rights and civil liberties);
and Voice&Accountability index
associated with socio-economic variables
such as education and health expenditure
lead to human development, which in turn
improves GDP.
EBRD Market economy institutions
matter?
• EBRD indexes rank between 1 and 4+.
These indexes concern the following
variables:
– Enterprise restructuring,
– Small and Large Scale Privatisation,
– Price liberalisation,
– Foreign Trade,
– Competition,
– Banking and Financial Institutions
– Infrastructures.
An interesting paradox…
GDP level 1989=100 vs EBRD indexes
Turkmenistan (160)
Belarus (134)
Uzbekistan (144)
Azerbaijan (163)
Slovenia (136)
Czech Rep (126)
Poland (156)
Hungary (124)
GDP level
2009
TBUA
SCPH
Average EBRD indexes ( from 1 to 4,25)
8
Scatter EBRD index 2009 and GDP growth 1989-2009
4
6
Bosnia-Herz
Azerbajan
Albania
Turkmenistan
Armenia
Uzbekistan
2
Belarus
Kazakhstan
Russia
0
Poland
Slovak
Tajikistan
Kyrgyz Rep
Montenegro Macedonia
Slovenia
Czech Rep
Hungary
Latvia
Estonia
Romania
Bulgaria
Lithuania
Croatia
Serbia
-2
Georgia
Ukraine
Moldova
1.5
2
2.5
3
ebrd_ind_avg_09
3.5
4
An interesting paradox: 3 groups of countries
1. the most advanced countries in terms of
EBRD index, having also the highest
levels of GDP, considering 100 the level
of GDP in 1989.
2. countries which never started a process
of reforms or are very slow reformers
with a relatively high GDP level
The third group as in a trap
3. Between Azerbaijan (A) and Slovenia (S)
on the horizontal axis, are all the countries
with low-to middle level of reforms. These
countries are also characterised by low-tomiddle GDP levels.
 GDP growth, among TEs, is not
connected with market economy reforms,
which are the ones suggested by EBRD.
This is confirmed by a simple regression model
GDP (cumulative growth) vs EBRD indexes
Model: OLS. Obs: 28;
Dependent variable: level of GDP in 2009 (1989=100)
Coef.
Std. Err.
P>t
Ebrd index
2009
-5.211364
9.338431
0.582
cons
128.4521
28.42034
0.000
R-squared 0.0118; Adj R-squared -0.0262
Prob > F = 0.31
Varieties of capitalism
• EBRD institutions are not correlate with growth.
What about the type of socio-economic model?
• Amoroso (2003) and Jessop (2002), identified 4
types of economic systems, such as the AngloSaxon model, the Corporatist model, the
Dirigiste model, and the Social-Democratic
model. Plus Socialist Markets
• Amable (2003) found similar stories, with 5 types
of capitalisms, taking into consideration 5
institutional forms (competition, wage nexus,
financial sector, social protection and education)
My contribution for TEs (28 c.)
•
Competitive capitalism
•
Corporatist capitalism
•
Dirigiste capitalism
•
Hybrid capitalism
•
State capitalism
My contribution for TEs
Trade
& Financial sector
Enterprise and
Market & Competition
Openess
Privat Subsi
e Sect dies f
Price
fdi trad
administ co. e
Ta Fore State
rif bank Banks
Stok Wag Edu
mkt regul healt
__
_
+
Compet ++
itive
capit
__
Corpor
ative
capit
_+
_+
++
++
+
Dirigist + _
e capit
_
+
_
_ +
_ +
_
_ _
+
_
_ _
+
++
+
++
_ +
Hybrid
capit
State
capit
Wage and
Social Inv.
++ ++
_ +
++
_ +
++
__
+
State
Capitalism
Hybrid
Capitalism
Romania
Bulgaria
Turkmenistan Bosnia
Belarus
Herzegow.
Uzbekistan
With dirigiste
tendency
Ukraine
With dirigiste
tendency
Dirigiste
Capitalism
Azerbajan
Kyrgyz Rep
Moldova
Russia
Tajikistan
Montenegro
with corpo.
tendency
Serbia
With
corporative
tendency
Corporative
Capitalism
Hungary
Slovenia
Competitive
Capitalism
Estonia
Slovak
Croatia
with compe.
tendency
Albania
with dirigiste
tendency
Macedonia
with compe.
tendency
Armenia
with dirigiste
tendency
Czech Rep
with compe.
tendency
Georgia
with dirigiste
tendency
Poland
with hybrid
tendency
Kazakhstan
with dirigiste
tendency
Latvia
with corpo.
tendency
Lithuania
with corpo.
tendency
History and path dependency
• The majority of CEECs adopted Corpor and Comp
models, Austro-Hungarian Empire, German and AngloSaxon influence.
• The Hybrid model: countries with a very mixed historical
and political background such as Bosnia-Her., Romania
and Bulgaria unstable transition. (Limited Poland) .
• CIS: almost all of them adopted Dirigiste capitalism and
State capitalism models. far away from the French one.
Here is linked to semi-authoritarian regimes “State
leaders” or parties or families or oligarchs.
• The tradition and the development of liberal values play
also a role. In CIS democracy and freedom are restricted
Poverty, 2008
(%pop 4$ day)
Gini coefficient,
2009
Voice& Account.
00-09
Fredom Index
(avg 2001-09)
Unemployme 09
GDP growth
average 1989-2009
Level GDP 2008
(1989=100)
GDP per capita,
2009
HDI 2009
HDI 1990
Life expectancy
in years, 1995
Life expectancy
in years, 2009
Life expe growth
95-09
EBRD average
indexes (2008)
Competi Corporta Dirig Hybrid
State
capitalis capitalis
capit capitalis Capitalism
45,0
6,1
54,4
37,7
30,7
32,1
27,5
37,2
34,2
35,7
0,050
0,893
-0,763
0,437
-1,157
2,20
2,80
1,29
2,76
1,00
10,2
2,36
14,5
12,2
1,05
0,37
13,0
1,20
4,0
2,75
133,3
116,7
98,0
98,3
146,5
10254
17641
4909
8766
3403
0,814
0,759
70,7
0,869
0,807
73,0
0,761
0,756
0,760
68,0
0,822
0,799
71,0
70,5
73,0
65,6
71,9
65,7
-0,24
0,0
-3,60
1,36
-2,02
3,253
3,437
2,646
3,281
1,763
0,785
67,0
An overall and comparative
socio-economic development rank
Models
Total score Standardized
(+/-14)
value
Corportatist capitalism
+9
1.26
Hybrid capitalism
+1
0.14
Competitive capitalism
0
0
State Capitalism
-4
-0.56
Dirigiste capitalism
-6
-0.84
Corporative capitalism: medium to high level of privatisation, wage
regulation, high level of Social investment. Freedom and democratic
institutions
Some mix: Fdi control, trade Tariff revenue, Foreign owned bank, State
owned bank, stock market capitalisation
Type of models and growth
• Variables which identify a competitive
capitalist model such as competition, high
levels of trade (or similarly, high share of
foreign-owned banks), a developed private
sector, and advanced reforms towards a
market economy (high EBRD index), are
not significant for economic growth nor for
the per capita GDP
GDP and growth vs competitive capitalist model
Model: OLS. Obs: 28;
Dependent variable: level of GDP per capita
2008
var
Coef.
Std. Err.
P>t
competition
3766.329
4252.645 0.385
priv_sec
ebrd_index
Model: OLS. Obs: 28;
Dependent variable: GDP growth
1989-2009
Coef.
Std. Err.
P>t
.9780798
1.623979
0.553
-194.0288 154.7295 0.222
-.0028262
.0590873
0.962
9347.72
-1.684986
2.490531
0.505
foreign_bank -40.30874 42.20938 0.350
.0084233
.0161187
0.606
_cons
3.686458
2.253249
0.115
6521.848 0.165
-12507.37 5900.486 0.045
R-squared 0.5487; Adj R-squared 0.4702
R-squared 0.0511; Adj R-squared 0.1139
Prob > F = 0.0008
Prob > F = 0.8686
GDP and HDI vs Corporatist
capitalist model
• On the contrary GDP and HDI in
particular are correlated with 1) higher
levels of public expenditure in health and
education and 2) democratic political rights
and civil liberties.
• These two variables identify better a
corporative capitalist type of socioeconomic model.
Scatter for Factor 1 and 2
Estonia
1
Latvia
Slovak
Czech Rep
Lithuania
Poland
Hungary
Bulgaria
Romania
Croatia
Slovenia
Bosnia H
Kyrgyz Rep
Macedonia
Albania
Montenegro
0
Georgia
Armenia
Ukraine
Serbia
Kazakhstan
Moldova
Scores for
factor 1
Tajikistan
-1
Russia
Azerbajan
Uzbekistan
-2
Belarus
Turkmenistan
-2
Source: own elaboration
-1
0
Scores for factor 2
1
2
Factor analysis
• Hungary and Slovenia have higher levels of
Factor 2, which characterizes better a
Corporative model,
• Slovak and Estonia have higher levels of Factor
1 which characterizes a Competitive capitalist
model.
• CIS are scattered close to each others,
identifying the Dirigiste model, and
Turkmenistan, Belarus and Uzbekistan, staying
in another corner of the figure, are captured in
the State capitalist model.
• A Hybrid model brings together Romania and
Bulgaria.
GDP and HDI vs
relevant variables for the Corporatist capitalist model
Model: OLS. Obs: 28;
Dependent variable: HDI 2007
Std. Err. P>t
Model: OLS. Obs: 28;
Dependent variable: GDP per cap
2008
Var
Coef.
Coef.
Std. Err.
P>t
Pol Rig &
Civ Lib
-.02383 .00389
0.000 -2081.45
Exp
edu&healt
.006712 .00313
0.044 1124.628 432.4085 0.017
cons
.836691 .03493
0.000 7341.524 4825.683 0.143
538.0074 0.001
R-squared 0.7629; Adj R-squared
0.7403
R-squared 0.6478; Adj Rsquared 0.6143;
Prob > F = 0.0000
Prob > F = 0.0000
From institutions to development
through capability
• Main assumption: countries which
experienced ↑ in HD  economic growth:
consequence of an expansion of people
capabilities.
• appropriate institutions + investments
socio-economic dim.  better level of
capability endowment:
Institutions  Capabilities & HD  Growth (with Development)
What is an institution
• institutions are rules and social norms
which structure social interaction. They
can effectively enlarge/diminish
capabilities, by the way in which they
affect political rights (freedom, democracy,
participation) and social rights (public
resources for collective purposes).
The link between institutions & capabilities
A country with democracy & freedom people capabilities
(because of collective lobbying) +than a country where these
rights are restricted. Public choices  collective benefits
the Capability curve
C
HDI &
Capabilities
DEs
B
AEs
ETEs
A
Institutions: freedom, participation, democracy, social rights
Testing hp: from institutions to human development
HD    1HealthExp 2 Freedom 3 Participation & Edu  
OLS model - Obs 28
Dependent Variable: HD (average LEI and EI) 2007
I Regression with education and
II Regression with interaction VA
V&A
and Edu
Variables
Coeff.
Variables
Coeff.
.0052873**
.0066548**
Health expenditure
(.0031919)
Health expenditure
(.0027672)
.
0122228*
0096823*
Freedom
Freedom
(.0030409)
(.0025019)
-.0017852
0000709**
Education
VA_Edu
(.0063819)
(.0000377)
expenditure (Edu)
.0010574
(.001026
Voice &
5)
Accountablity (VA)
Constant
.
.780512*
7685463*
(.0182849)
Constant
(.0093681)
R-squared 0. 7792= Adj
R-squared 0. 7940 Adj
R-square 0. 7240
R-square 0. 8221
Mean dependent var 0.8467
Mean dependent var 0.8467
Prob(F-statistic) 0.000000
Prob(F-statistic) 0.000000
Significance level at * = 1%, ** = 5%; *** = 10%.
From human development to economic growth
Dependent Variable: GDP per Capita
PPP)
Method: Least Squares
Included observations: 26
Variable
Coefficient Std. Error
Life Expectancy
1.661743 0.414746
index
Education index
2.127335 0.538301
Constant
-2.563643 0.627456
Adjusted R-squared 0.545264
Log likelihood 26.54466
Durbin-Watson stat 1.193667
Prob(F-statistic) 0.000116
(US$,
P-Value
0.0006*
0.0006*
0.0005*
Dependent Variable: GDP per Capita 2008 (US$,
PPP)
Method: Least Squares
Included observations: 28
Variable
Coefficient Std. Error P-Value
Life Expectancy
53177.6 0.414746
0.000*
index
Education index
127157.2 0.538301
0.000*
Constant
-148035.4 0.627456
0.000*
R-squared 0.7491 Adjusted R-squared 0.7290
Prob(F-statistic) = 0.0000
Test for 2002
GDPppp
C  1  LEI   2  EI   i
Test for 2008
Pairwise Granger Causality Tests
Included observations 26
Null Hypothesis:
F-Statistic
Probability
Hp
EDUCATION does not Granger Cause GDP
0.07391
0.92902
Rejected
GDP does not Granger Cause EDUCATION
5.17497
0.01607*
Accepted
LIFE does not Granger Cause GDP
0.25266
0.77930
Rejected
GDP does not Granger Cause LIFE
3.70301
0.04385*
Accepted
There can be EG without HD but if there is HD, then
there will definitely be economic growth.
HD: sufficient condition
Path of development and democracy
(2)
(1)
HDI/Eco. Growth with distribution
Democracy
(3)
(0) Social Capital & Middle class
(0) middle class and social capital create democratic institutions (1); then democracy,
social capital and middle cl. bring about human development and economic growth (2).
the middle class, and social capital are reinforced by the human development and
growth (3) (top down process).
Final remarks 2
1.
Dirigiste capitalist economies perform worst: growth without
development; voice without social opportunities
2.
State capitalist economies had growth without voice do not
enjoy pluralism and democracy
3.
Poverty and inequality in the majority of countries. CEECs
better than CIS and former Yugoslav. A common thing  in the
life expectancy
4.
The worst situation can be found in Russia, Ukraine, Moldova,
Tajikistan, Kyrgyzstan and Georgia, where both the levels of HDI
and of GDP are still lower today than in 1989-90.
4.
Higher HDI is always associated with democracy and semidemocracy regimes rather than authoritarian regimes.
Competitive vs Corporatist model of Capitalism
• EBRD market oriented reforms are not
significant for growth.
• Competitive capitalist model var. (competition,
+trade/foreign-owned banks, +private sector,
+reforms toward a market economy) are not
significant for economic growth nor for the per
capita GDP
• Corporatist capitalist model var (+levels of
public expenditure in health and education and
democratic political rights and civil liberties)
cause a higher HDI and GDP per capita.
Final Remarks on Variety of capitalism
• Freedom and social rights: the corporative
model is able to guarantee a better
combination! As a good soc.team wt 11
• Countries of the corporative model show
always better socio-economic var.: inequality,
poverty, Voice & Accountability, HDI.
Countries of the Dirigiste model show worse
indicators.
• A better institutional framework improves the
level of HD:
institutional framework  human development  economic growth