Economic development in the Eastern Europe – determinants and discrepancies

Abstract

Even if the Eastern European countries share a common communist past, the efficiency of the transitions these economies have gone through is at least not similar. Former USSR satellites managed to build relatively functional market economies which in turn allowed these countries to join the European Union and deepen the integration within other cooperation structures of the Western World. Unlike the first group of countries, former Soviet Republics, covered by the Eastern Partnership initiative of the EU, have registered varying performances in building efficient market economies, the success of which could be debated. The present study is set to reinforce the debates related to the economic growth and convergence of the Eastern Europe, simultaneously, finding the main directions on which policy-makers and academics should concentrate to increase the effectiveness and favourable impact of the development policies and strategies. The methodology is based on comprehensive quantitative analysis of the data related to economic development of these nations the core of which is log-log ordinary least squares regressions. The results show that there are considerable differences in the income sensitiveness both among the countries and growth determinants, the Eastern EU member states tending to register higher levels in this regard.