Slow and steady wins the race? An appraisal of ten years of economic transition (original) (raw)

The Transition Economies After Ten Years

SSRN Electronic Journal, 2000

While output declined in virtually all transition economies in the initial years, the speed and extent of the recovery that followed has varied widely across these countries. The contrast between the more and less successful transitions, the latter largely in the former Soviet Union, raises many questions about the relative roles played by adverse initial conditions, external factors, and reform strategies. This paper summarizes the macroeconomic performance of the transition economies. We first review the initial conditions confronting these economies, the reform strategy that was proposed, and the associated controversies that arose a decade ago. We then account for the widely different outcomes, highlighting the role of exogenous factors and the macroeconomic and structural policies adopted by the countries. We find that both stabilization policies and structural reforms, particularly privatization, contributed to the growth recovery. We also conclude that the faster is the speed of reforms, the quicker is the recovery and the higher is growth.

Starting Positions, Reform Speed, and Economic Outcomes in Transitioning Economies

2000

At the end of the 1980s and beginning of the 1990s 26 countries in Eastern Europe, the former Soviet Union and Mongolia initiated market reform policies. During the 1980's the average annual growth in real GDP for these countries was about 2.9%, while for the period 1990-1997, the average growth rate was -5.7%. During the same period China was implementing a relatively slow and gradual policy of economic reform and their economy responded with very high real GDP growth. From these experiences it was commonly concluded that rapid economic reform led to (at least) a short-term economic decline and that the more gradual implementation of reforms is more appropriate for countries starting with a long legacy of central planning. However, the above statistics and analysis ignore some interesting variations among the 26 CEE/FSU/Mongolian economies. The reform experience within this sample varies considerably from the rapid implementation observed in Slovenia and Poland to the very slow...

The Missed Puzzle Piece for Economic Transition Success

Comparative Political Economy: Comparative Capitalism eJournal, 2015

Economic Transition has been an agenda since decades, Eastern Europe countries began their process of transition after the fall of Soviet Union. Economic transition refers to the process that shift from centrally planned economy to market economy aiming at improving the economic performance of the country. Moreover, political economics argument explains that the suitable political strategy to improve economic performance, should not be based on a central authority government, claiming that decentralization supports democracy because it reduces the vested interests power and allows for competition, transparency and innovation of subnational governments, additionally it would empower and engage minorities in the political power and hence reduces tensions and improves economic performance. Liberalization is considered as a corner stone in transition economies; where liberalizing the economy aims at achieving efficiency by all means. Results shows that, decentralisation has various bene...

Macropolicies in Transition to a Market Economy: A Three-Year Perspective

The World Bank Economic Review, 1994

Countries in transtion to market economies have had to implement macroeconomic stabilizaton programs at the same time that they were engaged vi massiue changes of their poliical isitutons and the systemic frameorks of therr economies. What has been the interaction of stabilization with economic liberalzaon and dwep institutional reform in the countries of Eastern Europe, in partcular, the reations among initial conditons, political development, reform strategi, and outcomes? Expec in Eastern Europe suggests that when then is a political brakthrough (as n the countries under review) a radical stablzation-liberalization strategy is probably the kast nsky approac to re/om and will not constrain otput orstructural reform over the mediun tenn. Even stabilization that is initially succfid in ai inflation vill later come under pressure because of soci policies and the strral transitions impelled by reform. Several factors are identified that affect the credibility of reforms, and lessons are derived for counties that have stabilized and those that yet face this task. T he collapse of parry and state domination of society and the economy left the countres of Eastern Europe and the former Soviet Union facing a daunting dual challenge: to move toward competitive market economies while at the same time maintaining and strengthening newly gained democracies. The economic transition in these countries is viewed here as having three elements: macroeconomic stabilization; liberalization of prices, markets, and entry, and deep institutional change. This article focuses on the problem of achieving macroeconomic stability and sustaining macroeconomic balance through the transition. Countries in transition must implement stabilization policies in the midst of deep changes in political institutions and in the systemic frameworks of their economies. In the context of such large changes outcomes usually ascribed to macroeconomic policies can strongly influence systemic and political developments. Conversely, Lesek Balccrowicz is professor of economics at the Warsaw School of Economics. Alan Gelb is division chief Transition Economics Division, at the World Bank The authors grateflly acknowledge the contributions of staff of the World Bank, the Intenational Monemry Fund, the Bank for International Setdemcnts, and Planecon and the assistance of Raquel Artecona and Nikolay Gueorguie. Responsibility for errors and shortcomings is that of the authors alone.

The Transition Economies: Eastern Europe and Central Asia

2004

After the fall of the Berlin Wall in 1989, a neoliberal counterrevolution occurred within most of the former Central and Eastern Europe including the former Soviet Union. The countries in this region rejected all hybrid forms of market socialism on the grounds that this so-called ‘third way‘ had proved to be unworkable. Kornai (1986) played a major role in that radical shift of Eastern European elite on the efficiency and reformability of socialist systems.

Central and Eastern Europe in Transition

Contemporary Economic Policy, 1992

zur Erlangung des akademischen Grades doctor rerum politicarum (dr. rer. pol.) im Fach Volkswirtschaftslehre eingereicht an der Wirtschaftswissenschaftlichen Fakultät