Which of the countries that we have discussed during the second half of the semester have been using administrative barriers to the mobility of labour? Briefly outline the functioning of the system and comment on its possible implications for access to education.

Let us assume that a revolution just happened in North Korea. You have been appointed to the position of a special advisor on North Korean reform, your task is to discuss the possible future scenarios of development and provide policy recommendations. Therefore, try to prepare a brief memo outlining:

1) What are the risks and benefits of fast reunification with South Korea?

2) Whether you expect the suitable reforms to follow the logic of the Washington Consensus. Ideally, use examples from the economic history of neighbouring countries: how much did they really or not rely on market policies during their development?

3) Finally, choose 2 possible privatization methods and discuss what kind of implications for the restructuring, quality of governance, but also the future of North Korean economic elites they might have.

Imagine that you are member of a team which attempts to outline future risks and opportunities for the EU. Specifically, you have been asked for an opinion on the future of countries with the state capitalism model. Therefore, prepare a memo that will:

1) Outline what the term means. Are there any specific or distinct versions of state capitalism?

2) Outline the system's main advantages and weaknesses. Do not forget to discuss the stability of the model.

3) Attempt to speculate on its implications for the future development of the countries with such a model - compare it with either the "managerial capitalism" in general or with a particular variety of market economy that can be found in an EU country.

Some transition economies decided to privatize the state-owned enterprises into the hands of insiders – managers and employees of the companies (the MEBO method). Why would they do that?

How would you describe the role and development of stock markets (stock exchange and OTC) after mass privatizations (voucher privatizations)?

Which of the following reasons can at least partially explain the remarkable long spell of fast growth in Chinese economy, especially the features of China’s growth performance which contrasted with the performance of Central European economies?

How would you describe the current model of functioning of Chinese economy? Is traditional (textbook-like) market economy or a traditional Soviet-styled central planning? Explain similarities or differences between the current Chinese economy and the two afore-mentioned models.

Which of the following claims on price liberalization and its effects are true?

Which methods of privatization are more likely to preserve the role of incumbent economic elites? Please explain how this can work and provide some examples.

Let us consider a simple modification of the Dewatripoint-Maskin model of the soft budget constraints. 

 Assume that the share of “bad ideas” (1-α) is 10/100 (10%). All projects cost 1 million USD to start (initial financing) regardless of their quality. The subsequent information about revenues are gross, i.e. neither the initial costs nor the costs of the bailout have been subtracted from them.

Bad projects lead to 0 revenue after the first period while good projects will lead to the revenue of 2.5 mil. USD for the enterprise and 1 mil. for the manager (private gain for the manager).

Good projects end after the first period while the delays in bad projects imply that a decision must be made – either to liquidate the project or to save them by a bailout.

In the case of liquidation, the state gets 0.25 mil. USD at the end of the second period (scrap value of the liquidated enterprise), while the manager receives a punishment which has the equivalent of losing 0.5 mil. USD.

In the case of the bailout (with additional costs of 1 mil. USD), the project is allowed to continue for an extra period and it finally leads to the revenue of 1.25 mil. USD for the enterprise and a positive private payoff of 0.5 for the manager.

Analyze the managers’ motivation to attempt to implement a bad project as well as the center’s motivation to provide bailouts.

Assume that the state/center only cares about the revenues for the enterprise (or the scrap value), the profits/losses of the manager are assumed to be her private business.