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Winners Take All: The Politics of Partial Reform in Postcommunist Transitions

Abstract

Conventional models of the politics of economic reform tend to be based on an assumption about the costs and benefits of reform, known informally as the J-curve. Reforms are expected to make things worse before they get better. This presents a classic time inconsistency dilemma for reformist governments forced to demand severe sacrifices from the public in the short term for the mere promise of future gains. In response, political economy models of the reform process have tended to stress the importance of insulating governments from the pressures of the short-term losers until a sufficient constituency of winners has been created with a stake in supporting and enhancing the reforms.

Based on evidence from the postcommunist transitions, this article suggests that the most serious political obstacles to the process of economic reform have come not from the short-term losers but from the shortterm winners. Groups that gain substantial rents from the early distortions of a partially reformed economy have a stake in maintaining a partial reform equilibrium that generates high private gains, but at a considerable social cost. In these countries, the main political challenge has been, not to marginalize the losers, but to restrain the winners. This explains the paradoxical outcome of the postcommunist transitions: that political systems which are more inclusive of the losers have been able to adopt and sustain more comprehensive economic reforms than states insulated from popular pressures.

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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Gerard Roland , “The Role of Political Constraints in Transition Economies,” Economics of Transition 2, no. 1 (1994)

Sabena Petra Ramet , “Slovenia's Road to Democracy,” Europe-Asia Studies 45, no. 5 (1993)

Valerie Bunce and Mario Csanadi , “Uncertainty in the Transition: Post-Communism in Hungary,” East European Politics and Society 7, no. 2 (1993)

Ericson, “The Classical Soviet-Type Economy: Nature of the System and Implications for Reform,” Journal of Economic Perspectives 5, no. 4 (1991)

George Tsebelis , “Decision-Making in Political Systems: Veto in Presidentialism, Parliamentarism, Multicameralism and Multipartyism,” British Journal of Political Science 25 (1995)

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World Politics
  • ISSN: 0043-8871
  • EISSN: 1086-3338
  • URL: /core/journals/world-politics
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