Assessing the Macroeconomic Impact of Structural Reforms in Ukraine

April 23, 2021

Preview Citation

Format: Chicago

Anil Ari, and Gabor Pula. Assessing the Macroeconomic Impact of Structural Reforms in Ukraine, (USA: International Monetary Fund, 2021) accessed November 8, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Ukraine’s economic performance has been anemic since the early 1990s. A major impediment to productivity growth has been low investment, held back by lack of strong and independent institutions. This paper aims to assess the major areas of institutional weakness in Ukraine and quantify the long-term growth impact of catching-up to Poland in terms of the quality of major economic institutions and market development. Our analysis identifies the legal system as the area where the institutional quality is weakest compared to Poland, followed distantly by market competition, openness to trade and financial depth. Using a methodology that accounts for positive spillovers between the structural reform areas, we estimate that even under the most optimistic scenario, where institutional gaps are fully addressed, Ukraine would need 15 years to catch up to Poland’s current income level.

Subject: Central banks, Commodity markets, Corruption, Crime, Financial markets, International reserves, Macrostructural analysis, Production, Structural reforms, Total factor productivity

Keywords: Commodity markets, Corruption, Eastern Europe, Growth impact, Indicator value, International reserves, Reform gap, Reform scenario, Scenario Ukraine, Structural reforms, Total factor productivity

Publication Details

Pages:

37
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/100
Stock No:

WPIEA2021100
ISBN:

9781513582580
ISSN:

1018-5941

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