1. Monitoring Progress in Transition to a Market Economy
Samuel Fankhauser
EBRD
Workshop on Global Monitoring
19 June 2003

2. EBRD Comparative Advantage
Private sector focus
“Foster the transition towards open market oriented economies and to promote private and entrepreneurial initiative...”
Monitoring tools
Transition indicators (progress in transition)
Business environment and enterprise performance survey (BEEPS)

3. Transition Indicators
Aim: monitor progress in transition
Value judgement by “experts”
By EBRD Office of the Chief Economist
Based on strict classification system
Relatively cheap to produce
Some consultation with other IFIs

4. Transition Indicators
Ordinal ranking
10 step scale from 1 (worst) to 4+ (best)
Broad data set
12 years ( ), updated annually
27 countries
8 main dimensions of transition

5. Main Dimensions of Transition
Enterprises
Small scale privatisation
Large scale privatisation
Enterprise restructuring
Markets and trade
Price liberalisation
Trade and foreign exchange system
Competition policy
Financial institutions
Banking reform, interest rate liberalisation
Securities markets & non-bank financial institutions

6. Application: Development Over Time3

7. Application: Cross Country Comparison3

8. Energy efficiency and enterprise restructuring
Application: Analysis
Energy efficiency and enterprise restructuring
Tonnes of oil equivalent per US$ 1,000 of value added in industry
EBRD transition indicator for governance and restructuring 1

9. The BEEPS Aim: in depth assessment…
…of quality of governance, business performance and nature of firm-state interactions
Survey among regional entrepreneurs
By professional survey firm
Representative sample, sound methodology
Substantial cost
Jointly with the World Bank

10. The BEEPS Business perceptions as well as objective indicators
e.g., on bribe tax, frequency of corruption
Wealth of data
26 countries (excluding Turkmenistan)
6,700 enterprises active in the region
100 questions
2 rounds (1999, 2002)

11. Application: Development Over Time
Obstacles to business
All countries 3

12. Application: Cross Country Comparison
Quality of legal system

13. Application: Analysis
Heavy-handed regulation and corruption 3

14. Conclusion
Monitoring the investment climate is a key part of global monitoring efforts
Role of the private sector in promoting growth
Transition indicators are a cheap way of monitoring based on value judgement
BEEPS is a more sophisticated but expensive tool
Both have a wide range of applications