Title VIII Research

Department of State Title VIII Grant

The Davidson Institute, through the continued funding support of the Department of State's Title VIII Research and Training on Eastern Europe and the Independent States of the Former Soviet Union, has administered the research competition "Public Policy and Business Practices Affecting the Development of Markets in CEE and Eurasia" for the past five consecutive years.

• 2004 Grant Cycle
• 2003 Grant Cycle
• 2002 Grant Cycle
• 2001 Grant Cycle
• 2000 Grant Cycle

In its third year of participating in the Department of State Title VIII program, the Davidson Institute received $245,000 in funding. We received eight proposals with funding requests for research on the Balkans and Central and Eastern Europe from which we awarded four grants. The Institute also received thirteen applications for research focusing on the countries of Eurasia from which we awarded five grants.

Project: "Equity Market Integration and Equity Market Development in Central and Eastern Europe"

The research will focus on the development of equity markets in Central and Eastern Europe and their integration into global capital markets which is of critical importance for the economic development of the region, especially given the prospect of EU membership for a number of countries in the region. The study is the first to use new, comprehensive equity market data to measure the degree of global market integration and its time-variation for the CEE markets, as a function of internal (such as insider trading laws, foreign ownership restrictions) and external (such as EU directives regarding EU admission) political factors.

Project: "Development of Marketing Institutions for Women-Made Handicrafts in Kazakhstan and Kyrgyzstan"

The project will facilitate the development of marketing institutions for processed wool and fiber handicrafts produced by women in rural Kazakhstan and Kyrgyzstan. The development of marketing channels is expected to increase income from wool production, strengthen the economic position of women crafts-makers and encourage entrepreneurship.

Project: "Autopsy on an Empire: Understanding Mortality in the Former Soviet Union and Eastern Europe"

This project seeks to explain the widely divergent paths in mortality experienced in countries of the former Soviet Union and Eastern Europe during the transition from communism, and to assess the impact of this health crisis on the prospects for economic growth across the region.

Project: "Corruption, Business-Government Relations, and Decentralization"

This project will examine how the structure of business-government relations shapes corruption levels using comparative data on Russia's 89 regions. The research will show how decentralization affects the extent of corruption. One of the results will be policy recommendations on how to reduce corruption in federal states. This project resulted in one working paper.

WP 727: Explaining Patterns of Corruption in the Russian Regions

By: Phyllis Dininio and Robert W. Orttung

Corruption is a major issue influencing the Russian state as it seeks to evolve from its socialist past. While national level surveys provide a superficial picture of a nation as large and diverse as the Russian Federation, some regions might point the way for reducing corruption in Russia. This variation across countries raises important questions including what factors explain this, can theories used in other contexts be used in Russia, and is there a truly effective anti-corruption policy?

Project: "A Decade of Transition: A Reexamination of Performance and Public Policy Bases on Total Economic Activity"

The research reassesses the decade of transition from the perspective of total economic activity (TEA) (recorded plus unrecorded income growth) to determine which public policies are most conducive to business development; the establishment of free markets, and overall economic performance by estimating the dynamic evolution of "unrecorded income" in 25 transition countries over the period 1989-2000 employing all available methodologies. This project resulted in one working paper.

WP 636: Estimating the Size and Growth of Unrecorded Economic Activity in Transition Countries: A Re-evaluation of Electric Consumption Method Estimates and their Implications

By: Edgar L. Feige and Ivica Urban.

Due to underground or unrecorded economic activities playing a major role in transition economies, evaluations of the success and failure of the transition economy should be based on total economic activity. Using the Electric Consumption Method (ECM), data estimates allow for the sensitivity of the alternative specifying assumptions to be examined. The results show that the size of the unrecorded sector is not only highly sensitive to initial conditions, but they produce negative estimates of unrecorded income. However, it is still possible, using the growth rate of the sector, to make inferences about the transition process by examining the dynamic relationship between recorded and unrecorded sectors.

Project: "The Roots of Law: A Survey of Business Elites in Russia"

This grant will be used to conduct a survey of 500 business managers to identify the economic, social and political factors shaping the legal regime in Russia.

Project: "The Role of Business Associations in Post-Soviet Russia"

The grant will support a survey project on the role of business associations in post-Soviet Russia. By collecting information directly from association directors as well as the managers of constituent and non-constituent firms, I will catalog and assess the value of the services that associations provide; the grantee will explore the determinants of inter-associational variation in the mix of those services; and will identify the factors that influence a firm's decision to participate in this form of collective action.

Project: "Marketing Structures in Agribusiness and Income Distribution During the Transition in Bulgaria"

The researchers propose to document the evolution of the agricultural/agribusiness sectors and make recommendations about changes needed to improve the market structure during the transition in Bulgaria. This includes changes in farm structure, ownership, and methods of marketing, as well as, the relationship between agricultural producers, agribusiness (farm service supply industries and agricultural processing-marketing industries) and consumers.

Project: "Foreign Direct Investment and Intranational Inequalities in Income, Economic Conditions, and Local Government Financial Capacity in Hungary"

This research deals with the impacts of foreign direct investments on intranational inequalities in Hungary. The inequalities are in a) the capacities of subnational government units to deal with their policy responsibilities; b) employment opportunities in different regions of the country; and c) personal incomes. The study also seeks to better understand how FDI interacts with the process of decentralization of policy responsibilities from central to local government jurisdictions. The project involves generating a significant data set of measures relevant to economic policy at the subnational level in Hungary.