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Purpose The emerging economies in the Central and Eastern Europe and Central Asia (CEECA) region have posted significant economic growth in the last three decades, with considerable cross-country variation in terms of the speed of growth. The aim of this study is to evaluate the relative importance of government policies in shaping growth dynamics across the CEECA countries versus the impact of other factors beyond government control. Design/methodology/approach We first estimate a set of panel models, by means of Arellano–Bond GMM estimation method, using the 1995–2023 panel data for 25 CEECA countries. To evaluate relative contribution of three vectors of growth drivers (government policies, country characteristics and global trends), we then apply the standardized beta method, using the estimated coefficients from the panel regressions. Findings Our findings show that government policies account for more than half of the variation in economic growth, while country characteristics explain about one-quarter and global economic trends slightly more than one-fifth. Key policy variables influencing growth are fiscal policy and changes in institutional quality, which together account for over 60% of the impact of policy-related factors and explain about one-third of the variation in economic growth across CEECA countries. Trade and capital flow openness, as well as low inflation, are also important for growth, but their impact is comparatively smaller. Originality/value This is the first empirical study on economic growth in post-socialist economies to provide a quantitative estimate of the relative importance of government policies compared to factors beyond government control – such as country characteristics and global economic trends – in shaping growth dynamics.
Arsić et al. (Mon,) studied this question.