EERC news
May 27, 2016
The 40th Anniversary Research Workshop was held in Kyiv School of Economics, Kyiv May 21 - 22, 2016.
December 15, 2015
Your idea could be the next winner of the Global Development Awards Competition 2016. Every year, GDN awards up to $US 90,000 worth of grants to research proposals and innovative development projects as part of the Global Development Awards Competition. The deadline for submitting the proposals is 15 January, 2016.
December 02, 2015
Cеминар будет проводиться в КШЕ в Киеве 117-18 декабря 2015 года.
August 05, 2015
The unique KSE MBA program efficiently combines a comprehensive approach to a real-life case learning, analytical methods for decision-making and is specifically designed to educate a new generation of business leaders on how to make the most out of opportunities the global markets offer. KSE MBA combines high academic standards of top EU and US business schools with practical real-life cases from top employers of Ukraine which constitute an essential part of the program curriculum.
April 4, 2011

2009-2011: Inter-regional project on ‘Cities’ by the CIS and the CEE network


The project on cities is a cooperation effort between the CIS and CEE networks and funded by GDN, it is focusing on urban policies and development in Eastern Europe and Commonwealth of independent states within the last two decades. The investigated topics range from existence of multiple equilibria in the system of cities, to drivers of urban economic growth, to real estate risk premium. The background report summarizes recent research on urban development in transition.


A call for proposals was announced on May 7, 2009 by the deadline on June 7,2009. 36 proposals from 16 countries were received. The proposals were evaluated during two grant workshops, one in Kyiv (June 27-29,2009) and one in Prague (August 9-10,2009).. The project team and external experts selected 7 projects  for funding based on proposal quality and geographical and disciplinary diversity, including 3 projects funded by EERC.


Projects funded by EERC:


Oleksandr Shepotylo: Cities in Transition – Background Report


Abstract: Cities in transition face a unique set of challenges that came forth due to interaction of the legacy of socialist urban policies and the transition to the market economy. Socialist urban policies restrained growth of the largest cities and led to distortions in the spatial equilibrium and to more uniform distribution of population within a country. The transition to the market economy tends to reduce distortions but the rate of convergence to the new spatial equilibrium is low. Market rigidities, inadequate urban infrastructure, and inconsistent government policies prevent people from moving to other locations.



Tatiana Mikhailova: Looking for Multiple Equilibria in Russian Urban System


Abstract: In this paper I study the dynamics of city growth in the Soviet Union and Russia throughout 20th century in order to evaluate the existence of multiple spatial equilibria. Russian history throughout XXth and the beginning of XXIst centuries presents a unique case. The big experiment of central planning in spatial economy gives an opportunity to observe, after the breakup of the Soviet system, the adjustment toward a market-based spatial equilibrium



Frederic Laurin :The Real Estate Risk Premium in Central and Eastern European Cities


Abstract: In this paper, we investigate the evolution of office market risks and property prices in Central and Eastern European (CEE) cities. We developed a methodology assessing if office property markets have been accurately valuated in CEE cities, using as a benchmark the past evolution of office markets in Western European cities. Using regression methods applied on Western European data, we are able to estimate a predicted property price and capitalization rate for each CEE cites, given their respective actual real estate and economic conditions. Results show that investors’ valuations are in fact not too far apart from the predicted value based only on real estate and economic fundamentals. We also find that the macroeconomic environment and the general risk assessment seem to have a stronger effect on property prices in CEE than in Western European cities.



Maksim Belitski: Driving Urban Economic Growth – Evidence From Post-Communist World


Abstract: Small business, capital investment, quality of institutions and market reforms make a key contribution to the economy in terms of employment, innovation and growth. More recent studies explaining variability in economic growth have shifted their focus to urban economics of US and European cities (Hall & Hay 1980; Cheshire & Magrini 2006, 2009; Magrini 1998, 2004; Acs 2008, Glaeser 2007; Glaeser et. al 2010 and others) with a very scarce research on urban growth drivers in post-communist world. Author attempts to bridge this gap and investigate urban GDP per capita growth across seven post-communist countries using CIS Urban Audit data for 98 core cities—rather than administrative regions or municipalities. More specifically I undertake dynamic panel data study and test hypotheses on the role of physical and human capital, entrepreneurship, socio-economic, demographic and environmental characteristics, post-communist integration, government size, spatial patterns of integration and creative classes as drivers of urban economic growth during the period of 1995-2008. Variables reflecting spatial and dynamic adjustments are included which are statistically significant and eliminate spatial dependence and make estimates efficient. Not only do the results now provide consistent estimates of parameters, but they also support relevant theoretical insights and show that demographic, socio-economic, cultural, spatial and institutional characteristics are significant factors to economic growth and adjustment. Our findings also imply that post-communist cities form national rather than inherited post-communist space system.



Projects funded by CERGE-EI:


Ciprian Necula, Alina Nicoleta Radu, Uladzimir Valetka, Kamila Muhamedkhanova: Size Distribution and Growth of Cities in Transition Economies: A Cross-Country Investigation


Abstract: The purpose of the present paper is to study the dynamics of the city size distribution in CEE and CIS transition economies, and identify the determinants of the variation of this distribution in time and across countries. We build a comprehensive unified database for CEE and CIS countries concerning city dynamics. We test the Gibrat`s law employing panel unit root tests that takes into account the presence of cross-sectional dependence and Nadaraya-Watson non-parametrical kernel regression. We construct a consensus estimate of the Pareto exponent of the city distribution using various econometric methods in order to investigate the fulfillment of Zipf`s law. We also test for non-Pareto behavior of the distribution when all the cities in a country are considered, using the Weber-Fechner law, the logarithmic hierarchy model, and the log-normal distribution. Not only we consider various distributions, but also study the “within distribution” dynamics by analyzing the individual cities relative positions and movement speeds in the overall distribution using a Markov chains methodology. In order to explain the differences in the city distributions and obtain valid statistical inference, we estimate, using cross-section dependence robust standard errors, a panel data fixed effects model to control for unobserved country specific determinants.



Volodymyr Vakhitov: Are There Urbanization Economies in a Post-Socialist City? Evidence from Ukrainian Firm-Level Data


Abstract: In this work I test a set of hypotheses broadly stated by Jacobs (1969) that diversity of firms, individual innovation activities, inter-industry knowledge spillovers and developed urban amenities are essential for a successful development of a city and critical for an individual firm’s productivity. The estimation framework is summarized in Rosenthal and Strange (2004) and generally is based on estimating the total factor productivity. Even though the idea has been around for quite a while, and many researchers attempted various estimation techniques to test the stated hypotheses, two factors tell my paper apart. First, we managed to collect a very rich firm-level panel which includes not only the standard variables for the TPF estimation like output, capital and labor measures, but also innovation and FDI activities of firms, individual firm demands for intermediate outputs from other sectors, as well firms’ ownership structure. I believe this additional information will not only help us precisely measure the standard diversity variables, but also provide additional insights into interactions between firms, which are always stressed in the related literature. Second, recent advances in econometrics analysis (such as Olley and Pakes (1996) semi-parametric procedure for production function estimation or Blundell-Bond (1998) type estimators of dynamic effects) might help to control for specific micro data issues such as endogeneity and simultaneity bias. Additional attention is be devoted to particularities of a post-socialist urban landscape, which had determined the initial location of industries in cities, and effects of such location for firms’ productivity.



Rasa Baločkaitė: Transformations of the Soviet Union Utopias: Case of Visaginas, Lithuania and Tychy, Poland


Abstract: Visaginas, formerly Sniečkus, (Lithuania) was built as a planned socialist town and a satellite settlement to the Ignalina Nuclear Power Plant. Both the plant and the town were established in order to integrate Lithuania into the All-Union economic structures via the energy supply system,. The specific characteristics of the town were a particular mono industry, high living standards, ethnic composition (mostly Russian speaking migrants, Lithuanians as minority), absence of any history prior to 1973 and strong pro-Soviet attitudes. For years, it was a success  story and the vanguard site of the socialism. After the declaration of Lithuanian Independency in 1990, the town became the site of tensions and uncertainties. The aim of this research study is to illuminate how post-Soviet transition has been experienced by this particular type of community shaped by socialism. Community experiences are retrospectively reconstructed via content analysis of the local media. The particular characteristics of the town (ethnic composition, employment structure, etc.) made the process of transition extremely complicated. While other planned socialist towns established new identities and new trajectories of development, in the case of Visaginas, not the future, but the past played a crucial role in shaping the town’s identity.

Paper 1 more


Abstract: After collapse of the Soviet Union, the post Soviet states have had to reform their political and economic systems, beside that, they had to redefine their collective identities and to find ways of dealing with the unwanted Soviet past and the Soviet heritage, or the dissonance heritage. Coping with the “unwanted past” was dramatic issue in the planned Soviet towns, i.e. largely mono industrial satellite settlements to the Soviet industries, constructed by decision of Soviet authorities and having no or little heritage than the Soviet one. In the article, three planned Soviet towns (Visaginas in Lithuania, Nova Huta and Tychy in Poland), their identity transformations and self representations during post Soviet period are investigated.

Paper 2 more


Martin Gregor, Lenka Šťastná: Local Government Efficiency: The Case of Czech Municipalities


Abstract: We measure cost efficiency of 202 Czech municipalities of extended scope in period 2003–2008. The study is the first application of overall efficiency measurement of the local governments in the new EU member states, and the second in post-communist countries. We measure government efficiency through established quantitative and qualitative indicators of the provision of education, cultural facilities, infrastructure and other local services. First, we employ non-parametric approach of the data envelopment analysis and adjust the efficiency scores by bootstrapping. Second, we employ the stochastic frontier analysis and control for effects of various demographic, economic, and political variables. We compare scores under our preferred specification, i.e. pseudo-translog time-variant stochastic-frontier analysis with determinants, with alternative scores. The determinants that robustly increase inefficiency are population size, distance to the regional center, share of university-educated citizens, capital expenditures, subsidies per capita, and the share of self-generated revenues. Concerning political variables, increase in party concentration and the voters’ involvement increases efficiency, and local council with a lower share of left-wing representatives also tend to be more efficient. We interpret determinants both as indicators of slack, non-discretionary inputs, and unobservable outputs. The analysis is conducted also for the period 1994–1996, where political variables appear to influence inefficiency in a structurally different way. From comparison of the two periods, we obtain that small municipalities improve efficiency significantly more that large municipalities.