IESET.
Hypotheses·growth·czech_slovak_market_transition_comparison

The long-run prosperity gap between the Czech Republic and Slovakia since their 1993 dissolution is better explained by divergence in market institutions and FDI openness than by state-led industrial strategy.

In a panel of post-communist transition economies, the Czech Republic’s higher post-1993 GDP per capita and total factor productivity are positively associated with a larger gap in market-institution quality and FDI inflows, while government consumption (a proxy for state footprint) does not show a comparable or larger positive association with the gap.

PARTIALengine/runs/czech_slovak_market_transition_comparison

PARTIAL — coef=+0.117, p=0.000181; claim direction not auto-inferred

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. coef=+0.117, p=0.000181; claim direction not auto-inferred

why it matters

Growth claims can look convincing in single success stories. This test asks whether the pattern survives a broader comparison.

how the test works

It compares 11 country or place units from 1993 to 2024, using a panel fe decomposition design, with fixed effects for country and year.

what was measured
Possible pathway
  • Market institutions index
  • Foreign investment inflows pct income
What we checked
  • Real income pc
  • Productivity index
  • Manufacturing va share
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/czech_slovak_market_transition_comparison
1007550250199320092024CZESVKPOLHUNSVNHRVBGR
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show real_gdp_pc across 11 sampled countries over 1993–2024.
The shapes above are stylised — none of the lines are real data.
Placeholder for czech_slovak_market_transition_comparison. Published chart will be generated from engine/runs/czech_slovak_market_transition_comparison/chart_data.json.

Pre-registration

pre-registered
first-spec commit 5ce4495 · 2026-05-02T19:11:20Z
run generated · 2026-06-29T17:52:46Z

The long-run prosperity gap between the Czech Republic and Slovakia since their 1993 dissolution is better explained by divergence in market institutions and FDI openness than by state-led industrial strategy. In a panel of post-communist transition economies, the Czech Republic’s higher post-1993 GDP per capita and total factor productivity are positively associated with a larger gap in market-institution quality and FDI inflows, while government consumption (a proxy for state footprint) does not show a comparable or larger positive association with the gap.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Refuted if the combined coefficient magnitude of market institutions and FDI on log GDP-pc is not larger than the coefficient on government consumption, or if the market-institutions coefficient is negative and significant at p<0.05.

formal test & threshold
test:      panel_fe_decomposition_cze_svk
threshold: (|beta_market_institutions| + |beta_fdi|) > |beta_govt_consumption| AND beta_market_institutions > 0 at p < 0.10.

Method

Template
panel_fe_decomposition
Fixed effects
country, year
Clustering
country
Sample
11 countries · 1993 – 2024
Evidence type
causal

Decomposition panel FE with country and year fixed effects. The Czech- Slovak gap is decomposed into contributions from market institutions, FDI, and government consumption. Two-spec rule: also run a long-difference cross-section (1993 vs 2024) regression of log GDP-pc growth on changes in the same three factors.

Data

VariableSourceTransform
real_gdp_pc
outcome
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log_level
tfp_index
outcome
pwt:rtfpnatier 3
level
manufacturing_va_share
outcome
world_bank_wdi:NV.IND.MANF.ZStier 2
level
market_institutions_index
channel
fraser_efw:summary_indextier 4
level
fdi_inflows_pct_gdp
channel
world_bank_wdi:BX.KLT.DINV.WD.GD.ZStier 2
level
govt_consumption_pct_gdp
channel
world_bank_wdi:NE.CON.GOVT.ZStier 2
level
initial_gdp_pc_1993
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
level_at_1993
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
eu_membership_dummy
control
constructed:1 from 2004 for EU accession countriestier 5
binary
human_capital
control
pwt:hctier 3
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — czech_slovak_market_transition_comparison

Verdict: PARTIAL — coef=+0.117, p=0.000181; claim direction not auto-inferred

Pre-registration

  • Claim: The long-run prosperity gap between the Czech Republic and Slovakia since their 1993 dissolution is better explained by divergence in market institutions and FDI openness than by state-led industrial strategy. In a panel of post-communist transition economies, the Czech Republic’s higher post-1993 GDP per capita and total factor productivity are positively associated with a larger gap in market-institution quality and FDI inflows, while government consumption (a proxy for state footprint) does not show a comparable or larger positive association with the gap.
  • Falsification rule: Refuted if the combined coefficient magnitude of market institutions and FDI on log GDP-pc is not larger than the coefficient on government consumption, or if the market-institutions coefficient is negative and significant at p<0.05.
  • Falsification test: panel_fe_decomposition_cze_svk

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): +0.117
  • Std error: 0.03063
  • p-value: 0.000181
  • Observations: 231, countries: 11
  • Within R²: 0.936
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • world_bank_wdi:NY.GDP.PCAP.KD → real_gdp_pc (outcome, publisher=world_bank_wdi, n=12104)
  • pwt:rtfpna → tfp_index (outcome, publisher=pwt, n=6407)
  • world_bank_wdi:NV.IND.MANF.ZS → manufacturing_va_share (outcome, publisher=world_bank_wdi, n=9698)
  • fraser_efw:summary_index → market_institutions_index (decomposition_channels, publisher=fraser_efw, n=4557)
  • world_bank_wdi:BX.KLT.DINV.WD.GD.ZS → fdi_inflows_pct_gdp (decomposition_channels, publisher=world_bank_wdi, n=9936)
  • world_bank_wdi:NE.CON.GOVT.ZS → govt_consumption_pct_gdp (decomposition_channels, publisher=world_bank_wdi, n=9133)
  • world_bank_wdi:NY.GDP.PCAP.KD → initial_gdp_pc_1993 (controls, publisher=world_bank_wdi, n=12104)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • constructed: 1 from 2004 for EU accession countries → eu_membership_dummy (controls, publisher=constructed, n=352)
  • pwt:hc → human_capital (controls, publisher=pwt, n=8637)

Generated by scripts/run_panel_fe.py at 2026-06-29T17:52:46+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Authored framework. Read the transparency note.