IZA DP No. 4483: Prospective NATO or EU Membership and Institutional Change in Transition Countries
published in: Economics of Transition, 2011, 19 (4), 667-692
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.