Ruhr Economic Papers

Ruhr Economic Papers #131

Prospective NATO or EU Membership and Institutional Change in Transition Countries

by Ansgar Belke, Ingo G. Bordon, Inna Melnykovska and Rainer Schweickert

University of Duisburg-Essen, 08/2009, 31 S./p., 8 Euro, ISBN 978-3-86788-147-0



This paper quantifies the impact of incentives related to potential membership on institutional change as measured by the World Bank Governance Indicators (WBGI). Based on a panel of 25 transition countries for the period from 1996 to 2008 we show that pre-accession incentives provided by EU and NATO clearly matter for institutional development. In addition, path-dependency determined by cultural norms may be overcome by economic liberalization while foreign aid seems to hamper institutional development.

JEL-Classification: F15, F20, F50, P20,

Keywords: EU; NATO; transition economies; institutional change; governance