Electronic Library of Scientific Literature


Volume 48 / No. 3 / 2000




Antonín KLAS

The most complicated problem of assessing the economic effectiveness of education dwells in determining its contribution to the economy performance and growth. The problem is not only a qualified economic theory, but also the lack of consistent data. This is particularly true with the transition economies. The article is based on assumptions that education of the population and its structure are not the only factor, but also a function of the economic level in a country. The existence of close links between the GDP/capita level and the educational structure are illustrated in Table 1. Norway with a high share of GDP/capita has a distinctly different structure of education of the population than for example Portugal with a lower share of GDP/capita. These links justify a possibility how to make use of the educational structure of population for the assessment on contributions of education to the performance of economy. For the purpose of our analysis, a model of linear multiple correlation in the form (1) is used:

H = a . V + b . S + c . Z (1)


HGDP/capita in purchasing power parity
V – share of university educated population in total of 25– 64 aged persons (%)
S – share of secondary educated population in total of 25– 64 aged persons (%)
Z – share of elementary educated population in total of 25– 64 aged persons (%)
a, b, c – regression coefficients (constants).

After calculating a, b, c coefficients from Table 1 we arrive at the empiric relation (2):

H = 241.9 . V + 259.8 . S + 71.8 . Z (2)

(The coefficient of determination: 0.988, level of significance below 2.6 %.)

Since the a, b, c coefficients reflect the socio-economic and technology conditions of selected countries mentioned in Table 1, there can be raised a question, how would the economy of the Slovak Republic look like with similar socio-economic and technology conditions. If substituting data in relation (2) the GDP/capita should amount to USD 17 472. In fact it was only USD 8003, i. e. 45.8 %. Surprisingly, this result matched the findings of other researchers according to which the labour productivity in the Slovak Republic accounted roughly for 46 % on the productivity level of advanced countries.

If we accept an assumption generally approved by the economic theory, the economic performance is in proportion with its production factors, in our case it is the education and other production factors. The real performance of the Slovak economy and the performance calculated on the basis of regression coefficients from the relation (2) can be expressed by the following geometric mean:



k – coefficient of proportionality,
V – education level in the Slovak Republic (SR) and in small advanced countries (SAC) mea-sured by education coefficient,
F – level of other production factors in SR and in SAC.

By enumerating the education coefficient from Table 1 we arrive at the value of 1.82 for SR and the value of 2.1 for SAC. If we put for k = 1, then the only unknown is the relation FSR / FSAC.

On substituting the known values in the relation (3) we arrive at:

0.458 = (1.82 / 2.1)a . (FSR / FSAC)1-a (4)

If we estimate the weight of education factor on the formation of GDP/capita in SR to 22 %, we arrive at the relation (5):

0.458 = 0.8670.22 . (FSR / FSAC)0,78 (5)

By calculating the relation (5) we obtain:

FSR / FSAC = 0.38

It follows from the above that the level of other factors in Slovakia in comparison with small advanced countries can be estimated to 38 %. This low level of technology, management etc. reveal the basic problem of the Slovak economy. Great backwardness of other production factors impairs the relatively high degree of education level of the Slovak population.

As we can see from Table 2, along with the rising economic performance the contributions of university education in comparison with the secondary education are increasing. While in small advanced countries with lower GDP/capita the secondary education dominates in the contribution to the economic performance, in countries with higher GDP/capita the university education dominates. In comparison with secondary education the university education has still stronger impact on the increase of GDP/capita than on the formation of total GDP/capita (see Table 3). The impact of elementary education is distinctly negative. It appears that the more developed is the country, the higher contributions are obtained from the university education, and the less developed is the country, to be the secondary education appears the more efficient. Apparently, this is the consequence of a different technology and socio-economic level that enables more efficient use of the appropriate education degree.

Furthermore, the article investigates the dependence of the migration potential in the SR on the people’s skill a qualification level. In this connection, findings of R. Barro and X. Sala-i-Martin were applied. The migration potential in Slovakia is estimated from 1.1 % to 1.4 % of total population. Tables 6 and 7 show data on propensity to migration by the migrants’ education level and by sectors. For this purpose data on Slovakia and Austria were used. Table 8 presents data on migration of Slovak population to Austria by regions and by qualification degrees.

The highest migration propensity can be seen in the categories of qualified workers in all regions of Slovakia. These data prove that education of qualified workers falls flat, if not accompanied by adequate economic development. It is necessary to say that along with the qualified workers going abroad, the financial means invested in education leave the country as well.

In conclusion, there is investigated the harmony between potential rates of the increase of university graduates with the absorption capacity of the economy.




Slovakia has been seeking solution of two really historical tasks, which are overlapping and are also inter-related. At one hand, there is our effort to join the European Union, at the other hand, there is the process of concluding the Slovak economy transformation. The objective of this article is to analyze prerequisites and chances of Slovakia to enter the Union and to explain how is the solution of this task linked to the process of concluding the Slovak economy transformation. Since Slovakia is heading towards the European Union, the model of the European economic system (so called European mo-del) and its comparison with Anglo-Saxon or East Asian models is also analyzed.

The European Union represents a highly integrated community and its economic power is currently fully comparable with the USA. The EU essentially have been influencing our economy and modifies our external economic environment. At present the position of the Union has been dependent upon two strategically significant processes – the institutional reform and further enlargement of the Community, which is in many aspects very different from the previous enlargement waves. One of the differences is that in the past the countries where the transformation process was not finished never had applied for the EU membership.

For the first time, the readiness of Slovakia to access to the EU was evaluated under the Agenda 2000. The European Commission came to the conclusion that despite of the fact Slovakia accomplished major reforms necessary for the market economy, in 1997 did not fulfill the political conditions requested by the European Concil. The situation has substantially changed since that time and Helsinki summit decided Slovakia can be accep-ted for entry talks on readiness to access to the Union. So, chances of Slovakia improved even if the gap between the EU and the Slovak Republic has still remained rather big. The comparison of Slovak economy with the countries, which qualified for the entry ne-gotiations sooner, have testified that Slovakia is not any outsider and its lagging behind is not very big. However, in Slovakia when compared with the other countries, there were negative consequencies of lagging behind of the institutional reform. The negative impact of subjectivism in the economic policy should also not to be ignored.

Regarding the accession of Slovakia into the EU and finishing the economic transi-tion we have to ask: what should the final form of the economic system look like after transformation? We want to remind that such question was not discussed in the former Fe-deral Czecho-Slovak Republic and after the independent Slovak Republic was established the situation did not change either. According to the advocates of the radical economic reform the only appropriate model for our conditions is so called “market economy without adjectives”. In the article we try to demonstrate that such market economy is not a synonym of an effective market economy. In the economic literature (A. Harrison, M. Albert, R. Dore and others) different models of economic systems are distinguished and the most successful ones are considered to be three of them – Anglo-Saxon, European and East Asia models. Each of these models has been deeply rooted in the national history, culture and tradition which cannot be simply transferred to other countries or regions. However, these models are not unchangeable, they have been modified and adapted to the new conditions – at the present time to the information revolution and to the process of globalization.

A final form of the transformed economic system should not probably reflect an ideali-zed “school-book model”, but it should respect a link between Middle and Eastern Europe countries and the European space and (good) European traditions. In our opinion, there is only one reasonable alternative and that is the European model, since it has already de-monstrated its long vitality. The European model remains open to positive features of the Anglo-Saxon, or the East Asian model, its has been modified during the final stage of the integration process and have taken benefits from confronting the age of globalization.

When analyzing the zigzag course of Slovak economic transition we try to reveal the flaws and deformations of the transition process not only in the SR, but also in other transition economies. We critically examine theoretical starting points of the economic reform in the former Czechoslovakia (and subsequently in the SR and CR) which was reduced to “standard economy” from which also the disputable Washington consensus had resulted. We demonstrate that the so called standard economy could not be in reality the starting point of the economic reform. The standard economy does not deal with changes of the economic system (that is the field of the institutional economy) and in the best case it just describes the functioning of the developed market system in the economy with developed institutions. We go back to the discussion about the concept of radical economic reform and the concept of the gradualistic approach. Both these approaches in their pure form are actually one-sided. An optimum strategy (according to tasks being solved) should include both “radical” and gradualistic features.

The article is critical as for privatization which is a fundamental aspect of each economic transition. Both in the Czech Republic and in Slovak Republic, the privatization has become a real Achilles’ tendon of the transition and recovery of mistakes and deformations will take a long time.

We also pointed at the paradox that even after establishing the independent SR, the government did not create its concept own of the economic reform and did not make corrections where urgently needed. A total ignorance of the institutional side of the transition was the common basis of all mistakes. Only the present government has taken some remedial steps, although not always with a due accentuation.

The article also highlighted the interesting idea (Arrow, Stiglitz) understanding the transition as creating a new social contract based on rules, political and economic institutions, and especially on trust. Therefore it is not enough to destroy all previous rules and the old restrictions but a long-term systematic effort on creating the new contract as a ba-se for the new society and its economic system is required.

The experience from transition processes in the post-socialistic countries testified that the success of a reform closely depends on harmony between economic policy and institutional side of the transition. If transition economies do not implement pro-market institutional reforms fast enough, and if old institutions have still be operating in the system, this may result in a hybrid system with a growing institutional entropy.




This paper makes an attempt to show empirically the correlation between external imbalances, economic growth and convergence in Sub-Saharan Africa. Taking the World Bank African Development Indicators (1980– 1994), while I found a statistically inverse correlation between growth and external debt, the change in the terms of trade, and consumer price index; the correlation between growth and other explanatory variables including investment has been an equivocal. Moreover, from the other analysis it is appa-rent that countries with high level of capital flight had also low rate economic growth. Finally, holding these variables constant, I found a conditional convergence in Sub-Saharan Africa.



Jaroslav HUSÁR

The new government of the SR has announced a stabilization and restructuring package. Two macroeconomic imbalances were identified – the current account problem and the state budget problem. To understand the imbalances more deeply we concentrated on the explanation of the equilibrium problem that comes from the theory.

In the first part of the article we discussed the problem of economic equilibrium. It is based on macroeconomic position that the economy is in goods-market equilibrium when aggregate supply equals aggregate demand. Money market equilibrium was not discussed. We used the method of comparative statics (equations 9 and 10). In using this method, as it is known, we ignore the question of the time path that our variables may follow as they move from one equilibrium position to another, and the possibly even more fundamental question of whether or not a system that starts out of equilibrium (because some parameter shifts) will ever move back into equilibrium.

We discus the problem of stability of equilibrium in the model of the single compe-titive market. The main stress was on the condition for negative feed back in a single competitive market (Figures 1 up to 4).The mathematical treatment is given in equations 11–19. The condition for the existence of positive or negative feedback in a competitive market are deeply explained.

Due to our economic problems we studied the static properties of a simple makro-model:

C = C(Y)

I =

Y = C + I

We studied the behaviour of this model out of equilibrium. To do this we formulated an adjustment function stating the speed with which income changes in response to a situation of disequilibrium. Our dynamic version of simple linear model (that can be enlarged) of national income is given in equations 26–29. We described how the model behaves when out of balance, and whether or not Y will return to its equilibrium value after a disturbance. To answer these questions we needed a method of discovering where income is at any time t given its initial starting point and the rule, whereby income chan-ges use the differential equations techniques. The main conclusion is that the economic policy cannot ignore the knowledge of the economic theory.



Miroslav GRZNÁR – Ľuboslav SZABO

The objective of the article was to analyze the fixed capital reproduction process in the majority of agrarian company types in the SR, to point at structural fixed capital changes of companies during the transformation period, and to evaluate processes for modernization and utilization.

The SR agriculture has been in the process of transformation. Business subjects have slowly been adapted to the market environment, the agro-and-foodstuff market has reached a relative balance, but the decreased demand in agricultural raw materials has been accounted for the lower businesses’ performance, and for the lack of resources for the reproduction and modernization of the capital assets. That posed a thread to the growth of the businesses’ competitiveness during the EU entry preparation period.

The capital assets of the agricultural businesses during the transformation period were hit by many changes, mainly due to production restructuring. The capital structure is slowly getting closer to the production structure and this process has been accompanied by a decreasing value of the tangible investment property, both in the absolute and relati-ve value per land unit/per one worker. Paradoxically we can see that labour productivity in-creased while the fixed capital in companies declined. This is because the adjustment of the capital structure in enterprises to new production structures has not been finished so far.

Since in agricultural companies the fixed capital is mainly represented by one-purpose buildings and specialized mechanisms, its re-allocation to new business subjects is rather difficult. Due to that a decrease in the tangible investment property cannot be seen as negative, but also as an economic necessity benefiting for decreasing useless fixed costs.

The whole agrarian complex needs resources for modernization and reconstruction of the tangible investment property. At the same time, the depreciation of machines and equipment has still be growing. Non-sufficient own capital and subsidies have remained to be the major resource for financing the fixed capital reconstruction. Agrarian companies have not an easy access to commercial banks’ loans, because banks classify them as high risk partners.

Our analyses on reproduction processes in agricultural companies are supported by information acquired from Information Lists of a set of companies which were willing to provide them and which are stored in a database of the Ministry of Agriculture of the Slovak Republic maintained by the VÚEPP in Bratislava. Economic results for 1998 were provided by 2099 business subjects operating on 81,54 % of the agricultural land in the SR. Therefore these results can be taken as significant. In some cases we have used examples from previous years.

Our analyses focused at the most important groups of companies prevailing in the agrarian sector, and we analyzed agricultural cooperatives (AC) and trade companies (TC). Because data for single companies were not available we used average of set of companies sorted by the company type, economic prosperity and the cost level intensity. Supporting the comparability of the sets of companies from the point of view of nature-and-climate conditions, for the purpose of our analyses we selected only companies from maize production region.

The objectives of our research were firstly resources for the reproduction of agrarian companies. Currently these are represented by the profit and sales of investment property -being own resources, and investment subsidies and loans as outside resources. In both companies depreciation and credit lines prevailed. Higher volumes of loans are accessib-le mainly for trade companies. Investment subsidies were more important resource main-ly for agricultural cooperatives.

The analyses of a set of companies indicated that economically prosperous companies have followed the strategy of production intensification, restructuring and reconstruction of their tangible investment property. Regarding their resources for financing the fixed capital reproduction they are more strongly supported also by the agrarian policy mainly by allocation of investment subsidies. Non-profitable companies received much less subsidies for investment.

Subsidies to support investment process have been directed mainly to profitable companies, however, large volumes of funds have flown also to companies which are not able to make use of them efficiently. Therefore it is still necessary to seek better forms for fund support allocation based on efficiency criteria.

Business subject in agriculture still suffer a lack of funds for reproduction of their property tied up with a low liquidity, difficulty to obtain credit lines, growing prices of purchased production equipment and machines, but also with the stagnating production effects. Trade companies, however, have bigger volumes of funds at their disposal to compare agricultural cooperative, and therefore have achieved a higher reproduction rate.

Further on, the analyses focused on the effects of the reproduction process. We used the following indicators for the evaluation: labour productivity in revenues and in value added per capita, and revenues per one crown (Sk) of the investment property.

The results have indicated that an increase in the cost intensity is closely tied to land workers’ equipment by the fixed capital. That means the operational intensity is linked to the capital intensity.

There are only small differences between profitable and non-profitable cooperative regarding their land and workers’ equipment by the tangible investment property. And small differences have been recorded also in the labour productivity measured by revenues per one worker. However, much bigger are differences between them regarding labour productivity expressed by value added per one worker, and regarding revenues per one crown (Sk) of the tangible investment property. Profitable companies not only achieved a lower intermediate consumption per revenues unit, but they could also better use their fixed capital.

Similar results were recorded also in the set of trade companies. However, the revenue productivity here less correlates with the cost intensity. A different situation was indicated regarding the value added where profitable companies considerably exceeded the productivity level in non-profitable companies.

The analyses of fixed capital reproduction in the agrarian sector allows the following:

· the reconstruction and modernization of the investment property is not sufficient and this is mainly due to non-sufficient funds,

· the reason of a low efficiency of the tangible investment property is its high depreciation, especially regarding machines and equipment, non-adequate structure and excessive dimensions of some elements,

· the second cause of a low efficiency of the fixed capital is also stagnation of production effects,

· without credit lines and supportive resources the reconstruction and modernization of the tangible investment property is not feasible. These funds should be preferentially distribute only through loans’ bonuses or repayments to commercial banks which are able to assess the risk and the return on investment plans of business subjects.




In general, the average value of the ratio of liabilities to assets of Slovak companies is currently very high to compared with the companies in developed market economies. In view of still relatively high interest rates this high debt is a big financial burden for companies. Moreover, the volume of long-term loans for companies is very low and a great number of companies are facing liquidity problems. The limited possibilities of companies to finance their activities have a negative impact on investment and the process of restructuring of Slovak companies.

The objective of the article is to define and explain main factors that might have impacted the financial structure of Slovak companies, and on that basis to identify the main conditions for financing as well as to specify microeconomic conditions to be fulfilled so that the financial situation of Slovak companies can improve. Attention is paid to both (1) macroeconomic, legislative and institutional factors and (2) company-specific factors.

The macroeconomic, legislative and institutional factors that are dealt with in the article include inter-company transfer of insolvency, a great volume of loans granted in the privatisation, the lack of free financial sources in the Slovak economy, high risk of investment in companies, not properly functioning financial market, high interest rates, low return on equity, as well as the lack of long-term loans.

On the basis of these factors the framework conditions are identified to be fulfilled in order the unfavourable financial situation of Slovak companies can start improving. These conditions include macroeconomic stability, restrictive fiscal policy, support of foreign direct investments, dealing with the growing liquidity problems of companies and their extention over companies, improvement in the willingness of companies to meet their financial obligations, declaration of bankruptcies of financially weak companies or application of alternative instruments (e. g. capitalization of receivables), enhancement of liquidity and transparency of secondary markets for assets, improvement of the legal position of a creditor, better protection of legal rights of minority shareholders, and sol-ving the problems of banking sector and improvement of liquidity and transparency on the capital market.

The next part of the article is dealing with an empirical analysis of the dependence of indebtedness of Slovak companies on certain company-specific factors. The analysis has focused on a sample of 274 corporations involved in industrial production. The data needed to conduct the analysis were provided by the RM-System Slovakia from its database and are based on financial statements of the companies. The analysis is focused on the period from 1993 to 1998. The method of analysis is the multiple ordinary least squares regression analysis, with indebtedness being a dependent variable, and company size, return on assets and the ratio of fixed assets to total assets being independent variables. Supplementary the method of correlation analysis is applied.

The results of the analysis are compared with the results of similar studies in other countries, including both countries with developed market economy (G7 countries) and some countries with transition economy (Poland and Hungary). Additionally, the results are explained by and compared with the implications of the theory of the optimal financial structure of a company.

As it results from the study, there is a positive correlation of indebtedness to company size and a negative correlation of debt rate to return on assets, as well as to the ratio of fixed assets to total assets. The results are similar to those obtained in studies of Polish and Hungarian companies, but different from those obtained in most of the G7 countries. The observed differences suggest that the fundamental determinants of financial structure of companies in transition economies are different from those in developed market economies.

As Slovakia and other transition economies are approaching market economies and thereby adapting their macroeconomic, institutional and legal environment, it can be ex-pected that these changes will be followed by substantial changes in patterns of indebtedness of companies in these transition economies.

It can be concluded that the improvement in the financial situation and a successful financial policy of Slovak companies requires in particular the restructuring of assets and activities at the company level, as well as adopting certain supporting measures that are to be taken to improve the framework conditions of financing of companies.

A properly designed structure of financial sources has a positive impact on the whole economic efficiency of a company. Financial policy has also a considerable influence on the growth and development of a company and its activities. It is therefore very important for Slovak companies to pay a permanent attention to the question of the optimal financial structure, in order to be competitive not only on domestic markets, but also on international markets.




On universities and academies on the territory of Slovakia teaching of objects, concerning economy, opened in the 18-th century. On the University of Trnava in 1769 the chair of politico – cameral sciences was founded. The second one was that of statistics. Just before, in 1763 the College of politico – economic – cameral sciences in Senec near Bratislava was established. In 1777 the Trnava university transferred to Buda. The College of Senec ceased to exist. Royal academies in Bratislava and Košice (Academies of Law starting at the middle of 19th century) were places of university level teaching of economy. A certain importance had lyceums, first of all in Bratislava and Kežmarok.

At the end of 18th century first writings of authors not teaching on universities appeared. Such authors are Jozef Benčík (with his writing in 1792), Nikola Skrlec Lomnički (Skerlecz Miklós) (1731– 1799), Jozef Podmaniczky with writing in 1791.

The most important economist of this period is Gregorius Franciscus Berzeviczy (1763– 1822), born and died at Veľka Lomnica in Slovakia. He was student of the lyceum of Kežmarok until 1781.

Finishing the lyceum he became lawyer and worked in Pest. After short employment he continued in his studies at the Göttingen university in Germany. He was influenced there by the statistician Schlözer and the cameralist Beckmann.

Having returned back home, Berzeviczy tried in vain to obtain an important public office. He had several less important posts. Perhaps the most important experience for his knowledge was his work on the diet of 1790– 1792.

Very important impact on his life had the process with the “Hungarian Jacobeans”. He was not accused, but it forced him to abandon in 1795 his service and return to Lomnica. Until his death in 1822 he was acting as researcher an writer in the field of economy and policy.

Berzeviczy wrote about the industry and commerce of Hungary, about the situation of peasants, about agriculture, about European and world commerce etc. His book on theory of public economy remained unpublished and appeared only in a late Hungarian translation.

Berzeviczy wrote in German and Latin. In the evolution of economic thought in Slovakia his work represent the most important contribution of the period before nationalist tendencies’ prevailing.