ECA policies for improving connectivity

Abstract

Countries in Europe and Central Asia (ECA) have made important progress in furthering regional and global connectivity along the several policy dimensions discussed in this report, including trade, foreign direct investment (FDI), supply chains, migration, internet and telecommunications, and transport. ECA countries have taken critical steps to increase integration and connectivity along many of these dimensions, yet important challenges remain. This chapter considers the historical, political, and economic developments that have led to greater connectivity in many parts of ECA and how policies influenced this connectivity. We consider data on selected connectivity-related policies in the ECA region and comparator countries and regions including tariffs, FDI policies, preferential trade agreements (PTAs), bilateral investment treaties (BITs), product market regulations (PMRs), and domestic regulatory reforms in transition countries (transition indicators). In addition, comovements across the different policy areas for ECA as a whole and ECA subregions are analyzed as a means to understand whether connectivity policies pursued by ECA countries are moving in the same direction or are at odds with each other.