Agricultural Productivity in Transition Economies

There have been dramatic changes in productivity over the past fifteen years in transition countries. In general one can observe a U-shaped pattern: an initial decline in productivity with a recovery later on. However, the depth and length of the initial decline differs enormously between countries. The analysis by Jo Swinnen, Kristine Van Herck and Liesbet Vranken suggests that productivity changes were related to the extent of the pre-reform distortions and the reform implementation in the countries. In the most advanced reformers, the decline was relatively mild and recovery started fairly early on, and productivity growth, in particular labor productivity, has been strong for more than a decade. However, it is also clear that initial conditions mattered. The institutional and human capital hurdles to create a market economy were larger in the countries further east and it is therefore no surprise that transition productivity declines in those countries have been deeper and longer.

Publication year:2009