Two sides of economic openness: Non-tariff barriers to trade and capital controls in transition countries, 1993-2000

This article presents new measures of foreign economic openness in the transition countries that allow us to distinguish between non-tariff barriers to trade and capital controls. We argue that this distinction is important for the analysis of foreign economic relations in the post-communist world. While most states lowered barriers to trade since 1993, they increased the number of capital controls, which had been low at the beginning of the transition process. The ELITE (Economic Liberalization in the Transition Economies) data set, which is based on the IMF statistics on exchange arrangements and exchange restrictions and encompasses 24 transition countries, further demonstrates important exceptions to this trend. The comparison of the ELITE indicators with alternative measurements of economic openness indicates the need to move towards more refined analyses of the political economy of the transition process.