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   Course Title    Transitional Economics
Lecturer    Lucia Padure
Institution    Comrat State University
Country    Moldova


I. AIM AND DESCRIPTION OF THE COURSE

The course intends to assess the general patterns of transitional reforms in post-communist European countries: Central and Eastern Europe (CEE) and Commonwealth of Independent States (CIS). A factual analysis of the economic and political developments in these countries is complemented with comparative analysis of certain reform issues in other transitional countries in Europe, Asia and Latin America. The course will be looking at similarities and differences of economic policies in various transition countries, their outcomes and prospects for the future.

The course is divided into four parts. The first part "Philosophy of Transition" starts with analyzing major features of a command economy, and the causes of its collapse. It further defines the concept of transition and geopolitical, economic and historical background of transition reforms in CEE. This section also addresses questions concerning the role of the state in the emerging market economies, economic and political rationale of governmental intervention, state development in Europe, in general, and CEE, in particular.

The transition to market economy in Central and Eastern European countries (CEE) and the New Independent States (NIS) essentially means changing the correlation between the public and private sector, favoring competition in both of them and increasing efficiency in the public economics. Consequently, the second part of the course "Macroeconomic Policies and Public Finance Reforms" defines major ingredients of changes: liberalization, stabilization and growth, and covers analysis of public finances, tax reforms, and fiscal federalism in emerging economies. A significant portion is devoted to the causes and possible restraints of corruption, rent seeking and shadow economies which represent major threats to successful reforms in the NIS.

Part three "Structural Reforms in Transition" makes a survey of structural reforms: privatization; attracting foreign direct investments; establishing new policies in industry, infrastructure, agriculture, environmental management; and building a new social and financial system, including monetary and banking reforms. Former socialist countries developed strong social assistance systems, and even new constitutions in the majority of them declare the rights for each individual to work, free education and healthcare. Having imperfect tax systems and capital markets, it is difficult to implement these rights. On the other side, the human factor is decisive for economic growth. A separate topic of the course comes to analyze the social impact of economic and political reforms in transitional countries, and the prospects for reforming healthcare, education, and pension systems.

A central issue of concern in studying CEE economies is their reintegration with the world economy and the regionalization patterns in the European transitional countries, as well as how politics and economics interact in CEE. These aspects are covered by the fourth part of the course "Geopolitical Strategies, Regional Developments and Globalization". Though over the entire course comparative analysis with transitional economies all over the world is used, the final lecture is dedicated to a survey of transitional reforms in Europe, Asia, and Latin America -- their differences and similarities.

Course Requirements:

There will be a midterm exam, representing 50% of the final grade; a final exam (30% of the final grade); and a research paper in English (20% of the final grade). Exam questions will be essay, based on the lectures, course readings and seminar discussions. The research paper should address any economic, social, or political issue of transition related to European transitional countries as a group (covering comparative aspects), or separate by countries. Requirements for the paper are 8-10 pages. At the end of the semester each student will give a 10-15 minute presentation of his/her research in front of the class, followed by discussions.

II. ROLE OF THE COURSE IN THE OVERALL DEGREE CURRICULLUM OF THE INTERNATIONAL INSTITUTE OF MANAGEMENT OF MOLDOVA

International Institute of Management (IMI) of Moldova is a non-profit institution of higher education established in 1995 by several Moldovan and French universities. Currently, the institute has 700 students and 60 professors. IMI offers university business and economic education in Romanian, English, Russian and French in the fields of international economic relations, banking and stock exchanges, marketing and corporate management.

This course is to be taught in English for senior students of the International Institute of Management of Moldova having a solid basis in Economics. By the fourth year of studies, students pass already courses in Microeconomics, Macroeconomics, Public Finance, Monetary Economics, Corporate Economics, etc. The purpose of the course Transitional Economics is to enlarge the students’ knowledge in regional economics, mainly the region where they live.

III. METHODS USED IN TEACHING THE COURSE

The course is to be taught one semester with two meetings per week. One meeting per week is a lecture for a larger group of students (around 60), the second – represents seminars with 15-20 students. Seminars are organized in the form of discussions when students talk mainly, or several difficult issues are explained. After the midterm, students will start presenting their research papers followed by discussions. Last two weeks are exclusively dedicated to paper presentations.

Lectures are needed, first of all, because the lack of textbooks for all the students. Lectures are based on Handouts provided for students and transparencies for overhead projector. Several copies of readings, which are compiled from relevant chapters from textbooks in the reading list, are available in the Institute library. In addition, the lectures point out the major issues, ideas and thoughts of the professor in the field, which are to be covered by students in their exam papers. Seminars’ discussions are based on the readings placed in the library. Finally, students have a chance to develop their creativity and present their own views by writing a research paper. The objective of a paper is to improve research qualifications of students, their presentation skills, ability to answer questions and knowledge of English.

IV. COURSE CONTENT

Part I. PHILOSOPHY OF TRANSITION

1. Defining the region: Central and Eastern Europe (CEE) and Commonwealth of Independent States (CIS)

1.1. Historical and cultural background in CEE

1.2. Geopolitical patterns in CEE and rationale for CEE grouping

1.3. Defining the concept of transition

2. Rethinking the role of the state in the modern world and challenges faced by the state in transition

2.1. State and governments: concepts of their functioning, economic and political rationale for state intervention in the economy.

2.2. Libertarian versus social-democrat ideology in post socialist countries

2.3. Development of state in Europe, state traditions in CEE: differences from the West

Part II. MACROECONOMIC POLICIES AND PUBLIC FINANCE REFORMS

3. Politics of macroeconomic reforms in the region: comparative analysis

3.1. Patterns of macroeconomic reforms: speed, sequence, CEE setting

3.2. Liberalization: purposes, forms and implementation

3.3. Threats to macroeconomic stabilization and growth in CEE.

4. Improving Public Finances

4.1. Public expenditures and tax policy in transition economies

4.2. Debt management and financing budget deficits

4.3. Fiscal decentralization in transition

4.4. Corruption and rent-seeking

Part III. STRUCTURAL REFORMS IN TRANSITION

5. Privatization, industrial and agricultural policy

5.1. Privatization: types and methods in CEE, problems and difficulties of privatization

5.2. Reforms in industry and agriculture: a comparative survey in the region. Environmental issues.

5.3. Reforming financial systems, monetary and banking policy.

6. Social safety nets: alternatives of reforms

6.1. People in transition: poverty and inequality issues

6.2. Health problem of transition economies and public healthcare reforms

6.3. Reform of pension system in transition countries

6.4. Adapting education and training to the market economy.

Part IV. GEOPOLITICAL STRATEGIES, REGIONAL DEVELOPMENTS AND GLOBALIZATION

7. Politics and economics: their interaction in the region

7.1. Political systems in CEE and CIS, major trends in parliamentary and presidential elections.

7.2. Problems of statehood development and nation building

7.3. Current political environment for economic reforms in CEE and CIS

8. Integration into the world economy and Western assistance to the transition

8.1. Regionalization patterns in CEE: actual arrangements in CEE and CIS space

8.2. The reorientation to the West, forms and drawbacks of assistance in CEE and CIS.

8.3. EU accession: conditions and problems

8.4. New approaches to globalization and CEE world integration. International Monetary Fund (IMF): historical aspects and present role in the region

9. Comparative Analysis of Different Economic Systems: Choices and Constraints for CEE

9.1. The European model: variants of industrialized capitalism, special features and major elements of European capitalism development

9.2. The Asian model: defining Asian model of development, Lewis’ two sector model, reforms in South-Eastern Asian countries

9.3. The Latin American model: regional particularities (economic and demographic trends) and current developments in Latin America

READINGS

Lavigne, M. The Economics of Transition (From Socialist Economy to Market Economy), Macmillan Press Ltd, 1995.

The Origins of Backwardness in Eastern Europe, edited by Daniel Chirot, University of California Press, 1999.

From Plan to Market, World Development Report 1996, Oxford University Press,

1996, pp.241.

The State in a Changing World, World Development Report 1997, Oxford University

Press, 1997, pp.265.

Spulber, N. Redefining the State: Privatization and Welfare Reforms in Industrial and Transitional Economies, Cambridge University Press, 1997.

Amsden, A., Kochanowicz, J., Taylor, L. The Market Meets its Match: Restructuring the Economies of Eastern Europe, Harvard University Press, 1994.

Gregory, P., Stuart, R. Comparative Economic Analysis, Hpoghton Mifflin Company, 1999.

Alcock, A. A Short History of Europe, St.’Martin Press, NY, 1998.

North, D., Thomas, R. The Rise of the Western World, Cambridge University Press, 1999.

Cardoso, E., Helwege, A. Latin America’s Economy: Diversity, Trends, and Conflicts, The MIT Press, 1997.



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