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Course syllabus
ECONOMICS OF TRANSITION
Main information:
Bachelor Course
Master Course
ECTS: 6
Lecturers by partner institution:
 Faculty of Economics, University of Ljubljana (prof.dr. Janez Prašnikar, prof.dr. Polona
Domadenik, prof.dr. Tjaša Redek)
 University of Banja Luka (prof.dr. Mladen Ivanić /currently: President of Bosnia and
Herzegovina/, prof.dr. Dragan Mikerević).
 University of Mostar (prof.dr. Hasan Muratović, professor emeritus, School of Economics
and Business; University of Sarajevo, Sanela Demirović, M.A. City of Mostar, Secretariat of
the Mayor).
 University of Podgorica (prof. dr. Radoje Žugić /currently: Minister of Finance of the
government of Montenegro/, prof.dr. Milan Lakićević ).
Aims of the course
The course ‘Economics of transition’ focuses on the analysis of the past and present economic
performance as well as future development challenges in economies of transition, with the focus
on the South-Eastern Europe (SEE). The purpose of the course is to provide the students with a
thorough understanding of the path-dependent economic development, where common socialist
legacy provided many similarities in the business environment. The path dependency is especially
relevant in the SEE region, especially former Yugoslavia, where in addition to common socioeconomic system roots also common historical and cultural elements provide a strong binding
feature. The course will equip the students with required understanding of the economic and
business environment characteristics in the region.
The course will comprise two major parts. The first will be common, providing a summary analysis
of the economic development in transition countries. The starting point of this part of the course
is the analysis of the socialist period, which defined the common initial conditions for transition.
This introductory discussion is followed by the analysis of the transition process itself. Transition
was a divergent process because of the differing approaches (gradual vs. shock therapy) as well as
(especially SEE region) also lags due to political and nationalistic tensions. Nonetheless, transition
economies shared a number of similarities during the high-growth period, just before the crisis. In
addition, the EU accession was/is the major polit-economical goal, already successfully fulfilled by
the majority of non-FSU countries, with the exception of the majority of former Yugoslav
economies. While EU is one of the major economic growth factors and political goals, other factors
of future growth and competitiveness in SEE economies will be dealt with: success of structural
reforms (especially those concerning the labour market), favourable business environment, FDI
and trade. Finally, two pressing groups of issues the transition countries are currently facing will
be addressed in a systematic way: (1) financial crisis and (2) future growth sources and challenges,
including the role of industrial policy.
The second part of the course will focus on the former Yugoslav economies. The purpose of the
second part of the course will be to provide country specifics in terms of their past transition
development experience as well as current situation and main future challenge overview.
Economic development perspective will be linked also to broader with ‘doing business and
cultural’ aspects, providing the students with an in-depth understanding of the region and main
‘doing business’ characteristics. Three sub-regions will be carefully analysed: Republic of Srbska,
Federacija BiH (both part of Bosnia and Hercegovina, but very culturally different) and
Montenegro. In all cases, lectures will provide first a detailed overview of the country-specific
economic development at macro level, followed by relevant corporate developments. Country
experts
will
be
included
to
provide
the
best
possible
overview.
Syllabus* (Lectures held 9:00-11:00)
Lecture title
Date
Lecturer
Basic literature
Location: Faculty of Economics, University of Ljubljana, Slovenia
Manove, M. (1971) A model of Soviet-type economic planning. American Economic Review,
61(3): 390-406.
The pre-transition
(socialist) period
29.6.2015
Janez Prašnikar
Privatization
30.6. 2015
Tjaša Redek
Transition and structural
reforms
1.7. 2015
The challenges of
economic crisis
2.7.2015
Prašnikar, J., Svejnar, J. (1993). Workers' participation in management versus social ownership
and government policies: Yugoslav lessons for transforming socialist economies. In: Atkinson,
A.: Alternatives to capitalism, London: Macmillan Press: 106-125.
Estrin, S., Hanousek, J., Kočenda, E., Svejnar, J. (2009). The Effects of Privatization and
Ownership in Transition Economies. Journal of Economic Literature, 47:3, 1–30.
EBRD Report, 2009, 2014.
Tjaša Redek
Janez Prašnikar
Bole, V., Oblak, A., Prašnikar, J., Trobec, D. 2014. Financial frictions and indebtedness of firms:
Balkan countries vs. Mediterranean and Central European countries. Presented at the IEA World
Congress, Dead Sea, Jordan, 6. Junij 2014.
Slovenia
3.7.2015
Polona Domadenik
Domadenik, P. & Prašnikar, J. & Svejnar, J., 2014. "Legal Corruption, Politically Connected
Corporate Governance and Firm Performance," IZA Discussion Papers 8321, Institute for the
Study of Labor (IZA) (in the process of review in the Journal of Business Ethics).
Transfer to BiH (Banja Luka)
Country analysis: BIH
(Republic of Srpska)
6.7. 2015
Mladen Ivanić
Micro analysis
7.7. 2015
Janez Prašnikar,
Dragan Mikerević
Country analysis: BIH
(Federacija BIH)
9.7. 2015
Hasan Muratović
Micro – Mostar
10.7.2015
Sanela Demirović
13.7. 2015
Radoje Žugić
Prašnikar, J., Mikerević, D., Voje, D. (2014). Blockholding and organisational diversity : the case
of transition economy. Journal for East European Management Studies, 19(3): 277-304
Transfer to Mostar
Transfer to Kotor
Country analysis: Macro
Montenegro
Janez Prašnikar,
Milan Lakićević
Country analysis: Micro
Montenegro
Koman, M., Lakicevic, M., Prašnikar, J. & Svejnar, J. (2015). Asset stripping and firm survival in
mass privatization: testing the hoff-stiglitz and campos-giovannoni models in montenegro.
Journal of Comparative Economics (in print).
14.7.2015
Tjaša Redek
Preparation for exam
15.7.2015
Exam
16.7.2015
Oblak, A., Redek, T., Dumančić I., Stanić, M. Vujačić, N. (2014). Industrial policy in Croatia,
Montenegro and Serbia. In, Prašnikar. J. (ed.): Industrial policy in Retrospective. Ljubljana:
Finance, d.o.o. (2014): 85-109.
Bibliography
A selection of articles and book chapters. The basic literature by topics is provided.
Additional papers or data sources may be used. Any additional material will be provided in class.
Teaching methods
The course will use a combination of standard lectures, in-class work (case studies), and field trips
(company visits).
Prerequisites
The students are expected to be familiar with introductory levels of macroeconomics and
microeconomics.
Examination methods
The students will be expected to:
1. be actively involved in class work
2. prepare and present a seminar paper
3. take and pass the written exam