The present inquiry addresses the nexus between the development of electronic government and corruption in the provision of public sector services in developing and transition economies. The study analyzes the potential contribution of electronic government in combating petty corruption within the framework of two superimposed principal-agent model and show that electronic government could potentially limit bureaucratic corruption. To address the research question empirically, the study applies random tobit and linear random effects panel estimators to a dataset made of 121 countries, which covers the time period between 2008 and 2018. Estimations reveal that the adoption of electronic government in the delivery of public sector services has been the central factor that contributed to the reduction of petty corruption in developing and transition economies. The level of per capita income, political rights, civil liberties and share of natural resources in gross exports also correspond with less bribery in the public sector service delivery. Furthermore, the study finds that a lower level of socio-economic development corresponds with a greater level of petty corruption. Hence, e-government presents one of the utmost opportunities for socio-economic development and offers solutions for the improvement of the efficiency and effectiveness of public administration.

The paper aims to assess the relationship between Azerbaijani and Kazakhstani exchange rates and crude oil prices volatility. The study applies the structural vector autoregressive (SVAR) model. The paper concentrates on Azerbaijan and Kazakhstan, the post-Soviet countries considered as some of the most oil-dependent countries in the Caspian Sea region. The impulse response functions suggest that the rise of crude oil prices is associated with the exchange rates decrease and thus with an Azerbaijani manat and Kazakhstani tenge appreciation against the U.S. dollar. Moreover, the results suggest that an oil price increase leads to the rise of Azerbaijani international reserves. However, the results are insignificant for the Kazakhstani foreign exchange reserves. Additionally, the study reveals a negative and significant relationship between crude oil prices and USD/KZT in both pre-crisis and the COVID-19 crisis periods. We reveal that the correlation has been stronger during the COVID-19 pandemic. However, the relationship is not significant in the case of the Azerbaijani manat. The USD/AZN exchange rate has been stable since 2017, and the first phase of the COVID-19 pandemic has not caused a change in the exchange rate and a weakening of the Azerbaijani currency, despite significant drops in crude oil prices.

This paper investigates the increased role of extractive industry, particularly oil and gas, within the Dutch disease model between 2000–2018 in the Azerbaijan economy. Dutch disease phenomenon befalls when the national economy produces and exports a single commodity or a particular sector becomes the booming sector. Increased exports of particular goods and spendings of the accumulated mineral revenue appreciate the national currency, decreasing the competitiveness and thus the production or export volume of the non-booming sectors. Azerbaijan is an oil and gas-rich country which naturally actualizes the existence of Dutch disease syndrome . Therefore, the purpose of this research is to separately reveal the Dutch disease effects of resource movement and spending effects based on the theoretical frame­ work constructed from the core theory. The paper contains a comprehensive literature review and overall macroeconomic screening of the Azerbaijan economy to describe the preconditions of Dutch disease. Then, the study employs 42 multivariate linear ordinary least squares (OLS) estimations. The estimated models illustrate the presence of indirect de-industrialization (one form of resource movement effect) and the spending effect of the Dutch disease hypothesis. However, the paper does not find a direct negative influence of booming sectors on aggregated lagging (i.e., manufacturing and agriculture) and non-tradable sectors (services). Moreover, va­riables such as oil price growth rates, real effective exchange rate (REER), nominal effective exchange rate (NEER), and economic crisis periods failed to significantly explain the employment and real wages dynamics. However, these variables described certain influence channels in output and returns on capital growth rates. This paper sheds light on the interconnections between the Azerbaijan economy’s labor resources, government spending, and monetary channels. These interconnections indicate that the Dutch disease hypothesis holds true for Azerbaijan. Of the estimated OLS coefficients, 90.5% were highly stable, which suggests that the results are reliable. This study mainly tests the general theoretical expectations of the original Dutch disease model and presents a common ground to conceptualize the possible harmful effects of the booming oil and gas sectors in Azerbaijan. Any causal derivations should be handled carefully.

One of the key challenges for businesses during the Covid-19 pandemic has been to maintain financial sustainability despite the public crisis and consumer demand shocks. While some companies have managed to digitize and cope with the new realities, others have not. This will determine the future of companies and the direction of anti-crisis tools in management strategies. The purpose of this study is to analyze the use of digitalization as an anti-crisis tool among Azerbaijani businesses during the Covid-19 outbreak. The data set is based on voluntary survey data gathered from key businesses of the Azerbaijan economy. Our analysis applied k-means clustering, the related-samples Wilcoxon Signed Rank test and the independent-samples Mann-Whitney U test to learn whether there was any connection between digitalization and financial sustainability. Our findings indicate that 42% of the businesses that participated in the study obtained benefits by using digitalization as a crisis management tool during the Covid-19 pandemic period, but 38% of the respondents did not report any significant changes in their businesses despite increased digitalization efforts. Moreover, 20% of the businesses examined experienced negative changes after digitalization. The results of the independent-samples Mann-Whitney U test indicated that those businesses that had high scores before and after the increased digitalization efforts during the Covid-19 pandemic, achieved higher median profits, while the businesses with lower scores experienced a financial loss. As can be seen from the results, the chances of benefiting from digitalization are rather uncertain for local businesses. The main policy conclusion from this study is that businesses in Azerbaijan need to address the digitization challenge comprehensively to increase benefits and reduce costs. The results of our study are useful for business owners, policy makers, and top managers when developing strategies for enterprise-level digitization, especially during and after viral outbreaks.

Understanding long-term agricultural productivity is essential for designing agricultural policies, planning and targeting other economic policies (e.g., industrial policy), and managing agricultural business models. In a developing and oil-rich country such as Azerbaijan, agriculture is among the limited opportunities to diversify oil-based value added and address broad welfare issues, as farmers and agricultural workers account for a large share of total employment and the labor force. However, previous studies have not focused on an empirical assessment of the long-term and subsectoral productivity of crop commodities. Rather, they have used a highly aggregated and short-run perspective, focusing mainly on the impact of the oil sector on agricultural sectors. Here, we applied principal component analysis and hierarchical cluster analysis to identify similarities and differences in the productivity of specific crop commodities (e.g., cotton, tea, grains, tobacco, hay, fruits, and vegetables) between 1950 and 2021. We show that some crops are similar in terms of their variation, growth rates, and transition from the Soviet era to the post-Soviet period. Although the dynamics of change are different for food and non-food crops and for high- and low-productive commodities, it is still possible to narrow down specific subsectors that could reach the same productivity levels. This helps map out the productivity levels of crop commodities over time and across different subsectors, allowing for better policy decisions and resource allocation in the agricultural sector. In addition, we argue about some outlier commodities and their backward status despite extensive government support. Our results provide a common basis for policymakers and businesses to focus specifically on productivity and profitability from an economic standpoint.

The main purpose of the present research is to establish an exploratory picture of innovativeness in Armenia, Azerbaijan, and Georgia. The main trends and key determinants of innovativeness in the South Caucasus have rarely been investigated in mainstream economic research. However, the South Caucasus is a rapidly developing post-Soviet region, and it is geographically strategic for several key players in the global economy, including China and the European Union (EU). In fact, the role of the South Caucasus in international economic agreements is growing due to increased partnerships between Eastern and Western countries. Thus, the region’s current and future innovativeness will determine its integration into global value chains (GVCs). This study employs figure analysis to examine and compare the innovativeness of individual countries and the region as a whole against relevant economic and institutional indicators discussed in the literature. Using scatter plots, a polynomial trendline approach allowed the data to be divided into more meaningful periods of analysis to better understand peaks and dips in national innovativeness in association with selected economic and institutional indicators in the South Caucasus. Overall, the results show that economic growth and economic freedom play an important role in innovativeness in the South Caucasus, while institutional factors present more of a mixed picture. More specifically, the region’s overall innovativeness was positively correlated with rule of law and property rights to a certain extent, but this association was not consistent. In addition, Armenia and Georgia experienced higher growth in national innovativeness between 2011 and 2020, while this growth was weaker in Azerbaijan. This paper’s results may help the South Caucasus countries conceptualize their innovativeness in terms of the region’s overall innovativeness and key economic and institutional variables. Moreover, more sophisticated quantitative techniques and econometric models may be applied in future research.