Integration to the WTO and Economic Transition in the South Caucasus Economies

Abstract

Economic transition story in the South Caucasus economies started after the collapse of the Soviet Union. Theoretically, integration to the World Trade Organization (WTO) system should improve the economic transition performance. This research uses the yearly transition indicators by the EBRD to discover the relationship between economic transition performance and integration to the WTO in the contexts of before-and-after WTO membership and before-and-after the end of concession period defined for a new member to implement all obligations. Author employs bivariate de-trended regression analysis estimated by using Ordinary Least Squares (OLS), individually for Armenia and Georgia, and within a panel analysis covering all three countries of the region. Research findings provide strong evidence of significant positive or acceleratory effect of integration to the WTO on economic transition in the South Caucasus. Surprise finding is insignificant impact over competition policy index, which is supposed to be affected by integration.