## 2. Conflicts During the Early Transition Phase

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---

### Introduction
- Early transition phase in Central and Eastern Europe and the former Soviet Union was marked by a substantial fall in output (see Appendix Table 1).
- First-wave explanations cited:
  - (a) the sudden breakdown of central planning as a key mechanism for allocation of resources and coordination of economic activities;
  - (b) disruptions of production links and energy supplies as a result of the establishment of national borders;
  - (c) the breakdown of the payments system;
  - (d) the dissolution of the Comecon as a coordinator for external transactions;
  - (e) a credit crunch caused by efforts to establish macroeconomic stability;
  - (f) the introduction of new currencies;
  - (g) misaligned exchange rates leading to overly strong competition by imports from developed market economies.
- Second-wave research emphasized difficulties in establishing market institutions and raised endogeneity concerns when including institutional quality indices among explanatory factors.
- This paper develops and estimates a parsimonious cross-section model of output decline emphasizing:
  - conflicts;
  - institutional quality (proxied by corruption);
  - Soviet-era legacies (instrumented by duration of communist rule).
- An instrumental variable (IV) approach is used to address endogeneity of institutional quality, exploiting the assumption that the extent of Soviet legacies is positively correlated with the length of communist rule and allowing for nonlinear generational effects.

### Relative output performance in the transition process
- Sample: 25 transition countries grouped into four regions:
  - Visegrad: the Czech Republic, Hungary, Poland, and the Slovak Republic;
  - Balkan region: Albania, Bulgaria, Croatia, the former Yugoslav Republic of Macedonia, Romania, and Slovenia;
  - Baltic countries: Estonia, Latvia, and Lithuania;
  - CIS countries: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, the Kyrgyz Republic, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.
- Key empirical observations:
  - Severity of output decline varied considerably across groups.
  - Examples of extremes: fall in output of only 16 percent in the Czech Republic and Poland, and more than 60 percent in Georgia, Moldova, and Ukraine.
  - Most economies recorded their trough (T) within the first five years of transition; Moldova and Ukraine reached troughs in 1999.
  - Post-trough growth paths across the four groups show a high degree of similarity; differences in overall performance are mainly explained by intensity of initial fall.
- China contrasted sharply: China’s output did not decline during transition; explanations emphasize initial conditions (e.g., low share of industry relative to agriculture) and broad macroeconomic stability.

### Soviet legacies
- Two key assumptions:
  - (a) Soviet policies were detrimental to developing market institutions;
  - (b) transition countries began with different endowments of Soviet legacies (weak vs. absent).
- Table 1: Soviet legacies at the outset of transition — legacies and their effects
  - Weak/absent markets (especially for capital, foreign exchange, energy, housing, and labor)
    - Sharp deviations of domestic prices from world market prices
    - Capital- and energy-intensive production structure with a bias against consumption goods
    - Low labor mobility
    - Widespread quasi-fiscal activities
    - Noneconomic locational decisions resulting in large-scale, horizontally and vertically integrated companies, one-company towns, and high transportation costs
    - Absence of well-defined property rights
    - Very limited trade with countries outside COMECON
  - Weak/absent private sector activity
    - Hostile business environment
    - Difficulties in privatization
  - Weak/absent tax systems
    - Institutional weaknesses in tax collection agencies
    - Widespread tax exemptions and corruption
  - Weak/absent commercial banking sector
    - Low quality of banks and loans
    - Fragmentation of banking sector with weak new institutions (“pocket banks”)
  - Weak/absent legal systems
    - Political influence on court decisions
    - Absence of clearly defined property rights
    - Corruption/political approach to legal norms
    - “Telephone” law
  - Weak/absent efficiency and integrity of public administration
    - Multiple layers of government with separation of authority and accountability
    - Overstaffing in government services and administration
  - Weak/absent official accountability
    - Totalitarian political systems with lack of constraints on official discretion
    - Inadequate statistics, resulting in difficulties in obtaining reliable economic data
  - Weak/absent civil societies
    - Lack of transparency
    - Absence of counterweight to official decisions
    - Underdeveloped political institutions
    - Lack of independent press
  - Weak/absent environmental protection
    - Health and clean-up costs
    - Lower productivity, especially in agriculture
- Conceptual framework:
  - Soviet legacies produce both linear negative effects (absence of market institutions) and nonlinear "generational" effects (eradication of human capital/knowledge of markets).
  - Institutional Possibility Frontier (IPF) framework: societies face tradeoffs between social losses from dictatorship (x-axis) and disorder (y-axis); efficient institutional choice is tangency with IPF; location of IPF interpreted as "civic capital."
  - Comparative dynamics described:
    - Visegrad countries: shorter communist duration, more independent organizations, higher integration with Europe → lower costs of government and market failures; moved from point A to B (reducing government failure without overshooting).
    - CIS countries: higher initial government failure; transition overshot toward excessive disorder (C to D), then later moved to E but remained with higher overall costs than Visegrad countries.
  - Example: Personal Income Tax (PIT)
    - In most CEE countries PIT existed and could be repurposed from control to revenue collection (move from A to B).
    - In the Soviet Union PIT did not exist and had to be created de novo (move from C to D), reflecting Hobbesian problems of institution-building.

### Empirical analysis
- Aim: explain relative differences in output contractions among the four groups using a parsimonious set of explanatory variables:
  - Conflicts within countries or with other countries;
  - Quality of post-Soviet institutions;
  - Duration of Soviet rule.
- Policy variables omitted on grounds that institutions are more fundamental (IMF, 2003). Geographic distance measures were tested but coefficients were not significant.
- Model specification (sign expectations shown):
  - Yi = β0 + β1 Ci (+) + β2 Ii (-) + β3 Si (-) + εi
  - Ij = β4 Vj (-) + β5 Sj + εj
  - Notation and definitions:
    - Y = output loss
    - C = conflict
    - Iv = instrumental variable for institutions (corruption index for 1996)
    - S = years of Soviet rule
    - ε = error term
    - i, j = 1, ..., 25 (transition economies)
- Measurement details:
  - Output loss defined as decline in output from the last pre-transition year (set at 100) to the trough, using a real GDP index based on the last pre-transition year.
  - Conflict is a dummy equal to 1 for countries that experienced armed conflict during their early transition phase, and 0 otherwise, based on SIPRI data.
  - Institutional quality based on Kaufmann and others (2003) governance indices (1996), which aggregate perceptions-based measures across six dimensions; indicators range from -2.5 to 2.5. The corruption indicator is selected as the most directly relevant to economic performance.
  - To address potential endogeneity of institutions, the intensity/duration of Soviet rule (years of Soviet rule) is used as an instrumental variable.

### Conflicts during the early transition phase (Appendix Table 2)
- The table excludes the ongoing Chechnya conflict because "its relative impact on the Russian economy has likely been rather limited." The war in Bosnia is excluded because of lack of sufficiently reliable data.
- Listed conflicts (Country — Years of Conflict — Duration (in years) — Type of Conflict):
  - Armenia — 1991–94 — 4 — war
  - Azerbaijan — 1991–94 — 4 — war
  - Croatia — 1991–95 — 5 — war
  - Georgia — 1989–99 — 11 — violent crisis
  - Moldova — 1991–92 — 2 — violent crisis
  - Romania — 1989–91 — 2 — violent crisis
  - Tajikistan — 1990–99 — 10 — violent crisis
- Source for the conflict listing: SIPRI.

### Empirical estimates — Instrumental Variable Equation (Table 3)
- Dependent variable: CORRUPTION
- Method: Least squares; Included observations: 25; White heteroskedasticity-consistent standard errors and covariance
- Coefficient estimates and statistics:
  - C: 2.1123  Std. Err.: 0.54762  t-Statistic: 3.857288  Probability: 0.0008
  - YEARS: -0.0472  Std. Err.: 0.009236  t-Statistic: -5.112364  Probability: 0.0000
- Goodness-of-fit and diagnostics:
  - R-squared: 0.5517
  - Adjusted R-squared: 0.5323
  - Mean dependent var: -0.4016
  - S.D. dependent var: 0.6339
  - S.E. of regression: 0.4335
  - F-statistic: 28.3100
  - Sum squared resid: 4.3230
  - Prob (F-statistic): 0.0000

### Instrumental variable estimates for the output-loss model (Table 4)
- Dependent variable: OUTPUTLOSS
- Method: Least squares; Included observations: 25; White heteroskedasticity-consistent standard errors and covariance
- Coefficient estimates and statistics:
  - C: 380.112187  Std. Err.: 87.11934  t-Statistic: 4.36310  Probability: 0.0003
  - CONFLICT: 17.06674  Std. Err.: 4.25784  t-Statistic: 4.00830  Probability: 0.0006
  - ICORRYEARS: -412.6368  Std. Err.: 101.7532  t-Statistic: -4.05530  Probability: 0.0006
  - YEARS2: -0.1747  Std. Err.: 0.044  t-Statistic: -3.96990  Probability: 0.0007
- Goodness-of-fit and diagnostics:
  - R-squared: 0.6242
  - Adjusted R-squared: 0.5705
  - Mean dependent var: 38.6230
  - S.D. dependent var: 16.1398
  - S.E. of regression: 10.5773
  - F-statistic: 11.6269
  - Sum squared resid: 2349.4430
  - Prob (F-statistic): 0.0001
- Note: "The negative sign on the coefficient for the square of the length of the Soviet rule is explained by the inclusion of the same variable (not squared) in the IV equation."

### Key findings and interpretation
- The paper proposes a parsimonious model of output contraction focusing on two factors: armed conflicts and institutional development.
- The novel empirical contribution is the use of instrumental variables to obtain unbiased estimates of the impact of institutions on output, exploiting the link between Soviet legacies at the outset of transition and subsequent institutional development.
- Soviet legacies are proxied by the length of communist rule, with an added nonlinear term to capture potential generational or "memory" effects (e.g., effects that intensify when Soviet rule extends "significantly beyond one generation (e.g., 30–40 years)").
- Empirical result: "More than 60 percent of the variance in relative output performance among transition economies can be attributed to just two factors––conflicts and institutions."
- Country-group classification (Soviet Legacies vs. Conflicts):
  - Limited Soviet Legacies & Low Conflicts: Visegrad countries
  - Limited Soviet Legacies & High Conflicts: Baltics
  - Substantial Soviet Legacies & Low Conflicts: Balkans
  - Substantial Soviet Legacies & High Conflicts: CIS
- The Chinese transition is noted as exceptional because of the absence of armed conflict at the launch of transition and the relatively short period of central planning (from 1949 until the onset of reforms).

### Caveats, extensions, and policy-relevant observations
- Measurement limitations:
  - Duration of Soviet rule is used as a proxy for institutional impact; the authors acknowledge that this is a simplification and subject to limitations.
  - Alternative measures (e.g., numbers of political prisoners or forced exiles) exist but have important data limitations.
- Institutional development depends on factors beyond initial Soviet legacies; possible beneficial pre-transition legacies include:
  - (a) measures of educational standards were high relative to other economies at comparable income levels;
  - (b) gender equality was relatively more advanced than in comparator countries, especially in Central Asia;
  - (c) existence of various safety nets that, despite poor design, made reforms easier.
- Potential research extensions:
  - Refining the proxy for the degree to which communism permeated pre-transition societies.
  - Analyzing the nature of Soviet legacies further, including country-specific offsetting effects (example: independent labor unions such as Solidarity in Poland).
  - Assessing the role for EU accession signals and acquis communitaire as drivers of institutional development, while noting potential endogeneity concerns (EU may give more positive signals to faster-growing countries).

*Source: _wp0568 — 2. Conflicts During the Early Transition Phase (extracted from the provided PDF).*

### References..............................................................................................................

### References

### Text Tables
- 1.  Soviet Legacies at the Outset of Transition ...................................................................9
- 2.  Duration of Soviet Rule in Transition Economies .......................................................14
- 3.  Instrumental Variable Equation ...................................................................................15
- 4.  Instrumental Variable Estimates for the Model ...........................................................15

### Figures
- 1.  Output Decline in Four Groups of Transition Economies, 1989–2002 .........................5
- 2.  Output Recovery in Four Groups of Transition Economies ..........................................6
- 3.  Evolution of Real GDP for China and Other Transition Economies 
              since the Onset of Transition .......................................................................................7
- 4. Channels for Impact of Soviet Legacies on Post-Soviet Output Decline ......................8
- 5.  Institutional Possibility Frontier ..................................................................................10
- 6.  Institutional Possibility Frontier for Visegrad and CIS Countries...............................11
- 7. Schematic Classification of Transition Economies .....................................................16

### Appendix Tables
- 1. Real GDP Index for Transition Economies, 1989–2003...................................18

*Source: _wp0568 - References (PDF).*

### 2.  Conflicts During the Early Transition Phase................................................19

### _wp0568 - 2.  Conflicts During the Early Transition Phase................................................19

### Introduction
- Early transition phase in Central and Eastern Europe and the former Soviet Union was marked by a substantial fall in output (see Appendix Table 1).
- First-wave explanations cited:
  - (a) the sudden breakdown of central planning as a key mechanism for allocation of resources and coordination of economic activities;
  - (b) disruptions of production links and energy supplies as a result of the establishment of national borders;
  - (c) the breakdown of the payments system;
  - (d) the dissolution of the Comecon as a coordinator for external transactions;
  - (e) a credit crunch caused by efforts to establish macroeconomic stability;
  - (f) the introduction of new currencies;
  - (g) misaligned exchange rates leading to overly strong competition by imports from developed market economies.
- Second-wave research emphasized difficulties in establishing market institutions and raised endogeneity concerns when including institutional quality indices among explanatory factors.
- This paper develops and estimates a parsimonious cross-section model of output decline emphasizing:
  - conflicts;
  - institutional quality (proxied by corruption);
  - Soviet-era legacies (instrumented by duration of communist rule).
- An instrumental variable (IV) approach is used to address endogeneity of institutional quality, exploiting the assumption that the extent of Soviet legacies is positively correlated with the length of communist rule and allowing for nonlinear generational effects.

### Relative output performance in the transition process
- Sample: 25 transition countries grouped into four regions:
  - Visegrad: the Czech Republic, Hungary, Poland, and the Slovak Republic;
  - Balkan region: Albania, Bulgaria, Croatia, the former Yugoslav Republic of Macedonia, Romania, and Slovenia;
  - Baltic countries: Estonia, Latvia, and Lithuania;
  - CIS countries: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, the Kyrgyz Republic, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.
- Key empirical observations:
  - Severity of output decline varied considerably across groups.
  - Examples of extremes: fall in output of only 16 percent in the Czech Republic and Poland, and more than 60 percent in Georgia, Moldova, and Ukraine.
  - Most economies recorded their trough (T) within the first five years of transition; Moldova and Ukraine reached troughs in 1999.
  - Post-trough growth paths across the four groups show a high degree of similarity; differences in overall performance are mainly explained by intensity of initial fall.
- China contrasted sharply: China’s output did not decline during transition; explanations emphasize initial conditions (e.g., low share of industry relative to agriculture) and broad macroeconomic stability.

### Soviet legacies
- Two key assumptions:
  - (a) Soviet policies were detrimental to developing market institutions;
  - (b) transition countries began with different endowments of Soviet legacies (weak vs. absent).
- Table 1: Soviet legacies at the outset of transition — legacies and their effects
  - Weak/absent markets (especially for capital, foreign exchange, energy, housing, and labor)
    - Sharp deviations of domestic prices from world market prices
    - Capital- and energy-intensive production structure with a bias against consumption goods
    - Low labor mobility
    - Widespread quasi-fiscal activities
    - Noneconomic locational decisions resulting in large-scale, horizontally and vertically integrated companies, one-company towns, and high transportation costs
    - Absence of well-defined property rights
    - Very limited trade with countries outside COMECON
  - Weak/absent private sector activity
    - Hostile business environment
    - Difficulties in privatization
  - Weak/absent tax systems
    - Institutional weaknesses in tax collection agencies
    - Widespread tax exemptions and corruption
  - Weak/absent commercial banking sector
    - Low quality of banks and loans
    - Fragmentation of banking sector with weak new institutions (“pocket banks”)
  - Weak/absent legal systems
    - Political influence on court decisions
    - Absence of clearly defined property rights
    - Corruption/political approach to legal norms
    - “Telephone” law
  - Weak/absent efficiency and integrity of public administration
    - Multiple layers of government with separation of authority and accountability
    - Overstaffing in government services and administration
  - Weak/absent official accountability
    - Totalitarian political systems with lack of constraints on official discretion
    - Inadequate statistics, resulting in difficulties in obtaining reliable economic data
  - Weak/absent civil societies
    - Lack of transparency
    - Absence of counterweight to official decisions
    - Underdeveloped political institutions
    - Lack of independent press
  - Weak/absent environmental protection
    - Health and clean-up costs
    - Lower productivity, especially in agriculture
- Conceptual framework:
  - Soviet legacies produce both linear negative effects (absence of market institutions) and nonlinear "generational" effects (eradication of human capital/knowledge of markets).
  - Institutional Possibility Frontier (IPF) framework (Djankov and others (2003)): societies face tradeoffs between social losses from dictatorship (x-axis) and disorder (y-axis); efficient institutional choice is tangency with IPF; location of IPF interpreted as "civic capital."
  - Comparative dynamics:
    - Visegrad countries: shorter communist duration, more independent organizations, higher integration with Europe → lower costs of government and market failures; moved from point A to B (reducing government failure without overshooting).
    - CIS countries: higher initial government failure; transition overshot toward excessive disorder (C to D), then later moved to E but remained with higher overall costs than Visegrad countries.
  - Example: Personal Income Tax (PIT)
    - In most CEE countries PIT existed and could be repurposed from control to revenue collection (move from A to B).
    - In the Soviet Union PIT did not exist and had to be created de novo (move from C to D), reflecting Hobbesian problems of institution-building.

### Empirical analysis
- Aim: explain relative differences in output contractions among the four groups using a parsimonious set of explanatory variables:
  - Conflicts within countries or with other countries;
  - Quality of post-Soviet institutions;
  - Duration of Soviet rule.
- Policy variables omitted on grounds that institutions are more fundamental (IMF, 2003). Geographic distance measures were tested but coefficients were not significant.
- Model specification (sign expectations shown):
  - Yi = β0 + β1 Ci (+) + β2 Ii (-) + β3 Si (-) + εi
  - Ij = β4 Vj (-) + β5 Sj + εj
  - Notation and definitions:
    - Y = output loss
    - C = conflict
    - Iv = instrumental variable for institutions (corruption index for 1996)
    - S = years of Soviet rule
    - ε = error term
    - i, j = 1, ..., 25 (transition economies)
- Measurement details:
  - Output loss defined as decline in output from the last pre-transition year (set at 100) to the trough, using a real GDP index based on the last pre-transition year.
  - Conflict is a dummy equal to 1 for countries that experienced armed conflict during their early transition phase, and 0 otherwise, based on SIPRI data.
  - Institutional quality based on Kaufmann and others (2003) governance indices (1996), which aggregate perceptions-based measures across six dimensions; indicators range from -2.5 to 2.5. The corruption indicator is selected as the most directly relevant to economic performance.
  - To address potential endogeneity of institutions, the intensity/duration of Soviet rule (years of Soviet rule) is used as an instrumental variable.

*Italic: Content unit: 2. Conflicts During the Early Transition Phase — extracted from the source PDF provided.*

### Appendix Table 2 lists the conflicts in transition countries during the early transition phase. The ongoing

### _wp0568 - Appendix Table 2 lists the conflicts in transition countries during the early transition phase. The ongoing

### Conflicts during the early transition phase (Appendix Table 2)
- The table excludes the ongoing Chechnya conflict because "its relative impact on the Russian economy has likely been rather limited." The war in Bosnia is excluded because of lack of sufficiently reliable data.
- Listed conflicts (Country — Years of Conflict — Duration (in years) — Type of Conflict):
  - Armenia — 1991–94 — 4 — war
  - Azerbaijan — 1991–94 — 4 — war
  - Croatia — 1991–95 — 5 — war
  - Georgia — 1989–99 — 11 — violent crisis
  - Moldova — 1991–92 — 2 — violent crisis
  - Romania — 1989–91 — 2 — violent crisis
  - Tajikistan — 1990–99 — 10 — violent crisis
- Source for the conflict listing: SIPRI.

### Empirical estimates — Instrumental Variable Equation (Table 3)
- Dependent variable: CORRUPTION
- Method: Least squares; Included observations: 25; White heteroskedasticity-consistent standard errors and covariance
- Coefficient estimates and statistics:
  - C: 2.1123  Std. Err.: 0.54762  t-Statistic: 3.857288  Probability: 0.0008
  - YEARS: -0.0472  Std. Err.: 0.009236  t-Statistic: -5.112364  Probability: 0.0000
- Goodness-of-fit and diagnostics:
  - R-squared: 0.5517
  - Adjusted R-squared: 0.5323
  - Mean dependent var: -0.4016
  - S.D. dependent var: 0.6339
  - S.E. of regression: 0.4335
  - F-statistic: 28.3100
  - Sum squared resid: 4.3230
  - Prob (F-statistic): 0.0000

### Instrumental variable estimates for the output-loss model (Table 4)
- Dependent variable: OUTPUTLOSS
- Method: Least squares; Included observations: 25; White heteroskedasticity-consistent standard errors and covariance
- Coefficient estimates and statistics:
  - C: 380.112187  Std. Err.: 87.11934  t-Statistic: 4.36310  Probability: 0.0003
  - CONFLICT: 17.06674  Std. Err.: 4.25784  t-Statistic: 4.00830  Probability: 0.0006
  - ICORRYEARS: -412.6368  Std. Err.: 101.7532  t-Statistic: -4.05530  Probability: 0.0006
  - YEARS2: -0.1747  Std. Err.: 0.044  t-Statistic: -3.96990  Probability: 0.0007
- Goodness-of-fit and diagnostics:
  - R-squared: 0.6242
  - Adjusted R-squared: 0.5705
  - Mean dependent var: 38.6230
  - S.D. dependent var: 16.1398
  - S.E. of regression: 10.5773
  - F-statistic: 11.6269
  - Sum squared resid: 2349.4430
  - Prob (F-statistic): 0.0001
- Note: "The negative sign on the coefficient for the square of the length of the Soviet rule is explained by the inclusion of the same variable (not squared) in the IV equation."

### Key findings and interpretation (Summary and Conclusions)
- The paper proposes a parsimonious model of output contraction focusing on two factors: armed conflicts and institutional development.
- The novel empirical contribution is the use of instrumental variables to obtain unbiased estimates of the impact of institutions on output, exploiting the link between Soviet legacies at the outset of transition and subsequent institutional development.
- Soviet legacies are proxied by the length of communist rule, with an added nonlinear term to capture potential generational or "memory" effects (e.g., effects that intensify when Soviet rule extends "significantly beyond one generation (e.g., 30–40 years)").
- Empirical result: "More than 60 percent of the variance in relative output performance among transition economies can be attributed to just two factors––conflicts and institutions."
- The paper classifies country groups in a two-by-two schematic (Soviet Legacies vs. Conflicts) with the following placement:
  - Limited Soviet Legacies & Low Conflicts: Visegrad countries
  - Limited Soviet Legacies & High Conflicts: Baltics
  - Substantial Soviet Legacies & Low Conflicts: Balkans
  - Substantial Soviet Legacies & High Conflicts: CIS
- The Chinese transition is noted as exceptional because of the absence of armed conflict at the launch of transition and the relatively short period of central planning (from 1949 until the onset of reforms).

### Caveats, extensions, and policy-relevant observations
- Measurement limitations:
  - Duration of Soviet rule is used as a proxy for institutional impact; the authors acknowledge that this is a simplification and subject to limitations.
  - Alternative measures (e.g., numbers of political prisoners or forced exiles) exist but have important data limitations.
- Institutional development depends on factors beyond initial Soviet legacies; possible beneficial pre-transition legacies include:
  - (a) measures of educational standards were high relative to other economies at comparable income levels;
  - (b) gender equality was relatively more advanced than in comparator countries, especially in Central Asia;
  - (c) existence of various safety nets that, despite poor design, made reforms easier.
- Potential research extensions:
  - Refining the proxy for the degree to which communism permeated pre-transition societies.
  - Analyzing the nature of Soviet legacies further, including country-specific offsetting effects (example: independent labor unions such as Solidarity in Poland).
  - Assessing the role for EU accession signals and acquis communitaire as drivers of institutional development, while noting potential endogeneity concerns (EU may give more positive signals to faster-growing countries).

*Source: _wp0568 — Appendix Table 2 and accompanying text (IMF working paper content provided in the source PDF).*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2005/_wp0568.pdf_