Slovenia – Understanding Reforms (original) (raw)

After 20 Years of Status Quo: The Failure of Gradualism in Slovenia's Post-Socialist Transition

Institutions & Transition Economics: Macroeconomic Issues eJournal, 2012

In the past 20 years, the Slovenia has been praised as the richest former socialist country, having accomplished the advancement from borrower into donor status at the World Bank and having entered the European Monetary Union as the first country from former socialist block. In the due course of transition to market, Slovenia adopted the gradualist approach to economic reform, emphasizing gradual privatization, excessive regulation of the labor market and financial sector as well as the slow stabilization of public finances. In this paper, we review macroeconomic performance of Slovenia in past two decades in a comparative perspective. The paper outlines the growth trajectory of Slovenia from the onset of Habsburg Empire to the present. We showed that until 1939, Slovenia has almost fully converged to the income per capita frontier of Austria and Italy while the income per capita diverged substantially in the period 1945-1990 from Western European frontier. We review the contours of...

Institutional change in search of the market: The case of Slovenia

1995

Six main characteristics of an economic order are discussed and empirically evaluated for the case of Slovenia. All of them pertain to the institutional setting ab urbe condita; they comprise the legal and jurisdictional situation, the role of private property, the institutionalised strive at competition among firms and individuals, the liberty of markets, the solution of the big assignment problem, and the approach to foreign-trade relations. All six aspects impinge upon the conditions which confront investors in material and in human capital in Slovenia. The analysis shows that Slovenia has had, for three years now, by and large the same problems that other countries in transition had. For example, it still has, among others, tight regulations regarding foreign exchange transactions, and a highly socialist property system burdened with too complicated procedures of privatisation. The authors conclude that in Slovenia, as in the other formerly socialist economies, transformation sh...

Economic Effects in Slovenia within Integration in European Union

Journal of Empirical Research in Accounting & Auditing An International Journal

The study is going to analyze the economic development of Slovenia before and after membership in European Union. We will discuss whether economic cooperation between Slovenia and European Union members increased or decreased after European Union membership. This article provides a comprehensive and contemporary comparative analysis of the economic performance, the economic structure and the trade relations between Slovenia and European Union countries, allowing us to detect basic trends and developments. We will compare the economic performance of Slovenia and other European Union members, looking at aggregate figures from integration in European Union such as foreign trade, Foreign Direct Investment, Gross Domestic Product and its structure, level of structural unemployment and employment, inflation and level of income.

The Puzzle of State Ownership in Slovenia

Montenegrin Journal of Economics, 2016

models before privatisation takes off Paradoxically, one of the biggest economic issues facing countries today is the danger of deflation. It was a completely different story 20 or even more years ago in former socialist countries. An important characteristic of those economies was the so-called shortage economy (Kornai, 1980), meaning the supply of goods was less than the effective demand for them. The transformation from a rigid planned economy to a market economy led to an increase in effi

Assessing the Effects of Some Structural Measures in Slovenia

2016

The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged According to IMAD analyses, the structural imbalances in Slovenia have been accumulating for several years, which have in turn impeded economic recovery and, in particular, the achievement of lasting, stable economic growth and long-term fiscal sustainability. We have used the Development Report 1 and Economic Issues, 2 our annual publications, as the basis for identifying the main challenges to Slovenia's economic policy. In these reports a wide range of indicators are used to analyse the main factors affecting Slovenia's long-term development. They reveal that the key structural imbalances in Slovenia include low productivity, low activity on the part of some population groups, inadequate adjustment to demographic changes, a persistently high structural public deficit and high general government debt. The difficulties in these areas, which are closely interlinked, are considered to be the key reason for the weakness in the current economic recovery. Owing to their structural nature, they also dampen potential for long-term growth and undermine the long-term sustainability of the public finances. In view of the gradual economic recovery, we estimate that the time is now ripe for Slovenia to implement a set of comprehensive structural reforms. In times of deep recession, structural measures were more difficult to introduce because the unstable economic and political situation meant that economic policy makers had to focus on short-term counter-cyclical measures. The factors that are now assisting Slovenia regarding the implementation of structural reforms include: (i) the recovery of economic activity, which is at least partly based on domestic demand; (ii) the elimination of uncertainties related to the stabilisation of the banking system; (iii) favourable pricing terms of funding; and (iv) political stability. In such an environment, economic policy has some leeway regarding the design and implementation of measures, which are usually easier to carry out in the first half of the political cycle. This analysis presents simulations of selected measures that address the key challenges ahead for Slovenia. They have been selected on the basis of various criteria, the most important of which include their ability to improve the situation in targeted areas, the empirically supported effectiveness of measures in other countries, and their acceptability in relation to other imbalances in the economy or their impact on its well-being as a whole. The choice of simulated measures was also conditional on the limitations inherent to the models used. In contrast to the measures that have been used the most in recent years, the simulated measures are primarily intended to remedy multiple problems at the same time rather than address only one area. In order to enhance the effectiveness of the set of measures, it will be necessary to define and list them by priority, as too broad a set can reduce the focus on those which are the most important. The credibility and speed of implementation also have a positive impact on the effectiveness of the reform programme, particularly in the short and medium term. 3 Empirical estimates suggest that, despite some negative short-term effects, these structural measures would have a significant and permanent positive impact on long-term economic potential and fiscal sustainability in Slovenia. As expected, positive macroeconomic and fiscal effects dominate in the long term. However, it is also necessary to point to certain, albeit small, negative long-term consequences of the simulated measures: for example, according to the model-based assessments conducted, some of the measures on the product market reduce employment. The model-based simulations also indicate that there are considerable short-term positive effects for measures aimed at reducing administrative barriers as well as those which match supply and demand on the labour market and reduce costs for businesses. Some other measures on the product market could also lower costs and prices, but this would further exacerbate current deflationary pressures. Moreover, some measures could decelerate the urgently needed fiscal consolidation process, at least in the short term. However, it should be noted that, in the long term, structural measures tend to have a positive impact on public finances through endogenously stimulated economic growth. These measures must be defined and implemented by taking full advantage of the flexibility offered within the existing rules of the Stability and Growth Pact 4 regarding temporary deviations from the medium-term budgetary objective. This holds particularly true for the years to come, when the general government deficit in Slovenia is forecast to fall significantly below 3% of GDP. Since there are several factors which can increase the uncertainty of the estimates, the results of the simulations should be interpreted with caution. The results of model-based simulations or estimates relying on parameters taken from other studies may be biased due to changes in the economy's structure,

Slovenian catching up with the developed countries: when and how?

International Journal of Emerging Markets, 2006

The process of catching up in development depends on the accurate assessment of the current status of economic development, internal government efforts and external conditions. The article first analyses the possible world development scenarios. It concentrates on three scenarios of which in the short term the most probable is the growth leader scenario, the best scenario being the scenario of growth shift. The time lag is larger when Slovenia is compared to the successful small EU member states, rather than with the EU 15 average. The original time distance calculations show that, as regards the exports of goods per capita, we are lagging behind some small member state for up to 33 years, that figure being a little lower as regards exports of technologically intensive products. The optimistic scenario of catching up in 16 years does not seem very probable as it would not be easy that the Slovenian economy's growth rate would be 2 percentage points higher than that of the EU 15 average. This time would be shorter if the necessary changes were made to the government policy towards promoting the knowledge-based economy (a precondition for productivity growth), and thus more effective responsiveness and flexibility, as well as internationalisation (also with the aim of restructuring and greater specialisation), innovative capabilities and, last but not least, overcoming the present mentality and coordination and implementation deficits.

Impact of International Finance and other Institutions on Key Policies of Slovenia

2015

The objectives of the case study: - to provide an overview of the development of the economic and political situation from the pre-crisis period until today; - to acquire an insight into the impacts on Slovenia’s recent reforms; - to identify the key actors and their role when reforms are recommended and put in place; - to understand how and between which sectors the burden of economic adjustments is divided.