The land that lean manufacturing forgot?

We have conducted the first large-scale survey on management practices in transition countries. We found that Central Asian transition countries, such as Uzbekistan and Kazakhstan, have on average very poor management practices. Their average scores are below developing countries such as India. In contrast, the Central European transition countries such as Poland and Lithuania operate with management practices that are only moderately worse than those of Western European countries such as Germany. As we find these practices are strongly linked to firm performance, this suggests that poor management practices may be impeding the development of Central Asian transition countries. We find that competition, multinational ownership, private ownership and Received: July 7, 2011; Acceptance: May 18, 2012 1 We thank Nolan Noble, Stephen Jeffrey and Anupriya Kumar for excellent research assistance. We thank an anonymous referee and the editor, Wendy Carlin, for offering very constructive and helpful suggestions. We are grateful to Erik Berglöf, Simon Commander, Ralph De Haas and Jeromin Zettelmeyer for helpful comments. Funding for the survey came from the World Bank and the European Bank for Reconstruction and Development (EBRD). Bloom and Van Reenen were paid by the EBRD to help run this survey. We also thank the ESRC for support of the Centre for Economic Performance of the LSE. Economics of Transition Volume 20(4) 2012, 593–635 DOI: 10.1111/j.1468-0351.2012.00444.x 2012 The Authors Economics of Transition 2012 The European Bank for Reconstruction and Development. Published by Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main St, Malden, MA 02148, USA human capital are all strongly correlated with better management. If causally interpreted, this would imply that the continued opening of markets to domestic and foreign competition, privatization of state-owned firms and increased levels of workforce education should promote better management, and ultimately faster economic growth. JEL classifications: L2, M2, P21.