Book contents
- Frontmatter
- 1 Incentives and careers in organizations
- 2 Endogenous growth: lessons for and from economic history
- 3 Microtheory and recent developments in the study of economic institutions through economic history
- 4 Poverty traps
- 5 Microenterprise and macropolicy
- 6 Markets in transition
- 7 Transition as a process of large-scale institutional change
- 8 A Schumpeterian perspective on growth and competition
- 9 Learning and growth
- Index
7 - Transition as a process of large-scale institutional change
Published online by Cambridge University Press: 05 January 2013
- Frontmatter
- 1 Incentives and careers in organizations
- 2 Endogenous growth: lessons for and from economic history
- 3 Microtheory and recent developments in the study of economic institutions through economic history
- 4 Poverty traps
- 5 Microenterprise and macropolicy
- 6 Markets in transition
- 7 Transition as a process of large-scale institutional change
- 8 A Schumpeterian perspective on growth and competition
- 9 Learning and growth
- Index
Summary
INTRODUCTION
In his essay on economic policy and the political process, Avinash Dixit (1994) quotes Alan Blinder's “Murphy's law of economic policy” (1987, p. 1):
Economists have the least influence on policy where they know the most and most agree; they have the most influence on policy where they know the least and disagree most vehemently.
This statement, its second half at least, seems to be especially valid for the economics of transition. Rarely have economic advisers played such a prominent role in policy debates as has been the case since 1990 in central and eastern European economies. Jeffrey Sachs has attracted worldwide attention for his forceful advocacy of the “big bang” approach to transition. These views were endorsed by one part of the profession and criticized vehemently by another, while many others remained skeptical about what economic theory has to say about the transition from socialism to capitalism. No pre-established theory of transition existed before the fall of the Berlin wall. The ratio to theory to policy papers in transition economics has nevertheless been surprisingly low. The theories with which Western advisers were probably best-equipped were those concerning macroeconomic stabilization. However, most economists will agree that stabilization is only one of the dimensions of transition. Other very important aspects relate to the necessary large-scale institutional changes: the creation and development of markets, including financial markets, the institution and enforcement of property rights and other legal and political changes along with enterprise privatization and restructuring.
- Type
- Chapter
- Information
- Advances in Economics and Econometrics: Theory and ApplicationsSeventh World Congress, pp. 240 - 278Publisher: Cambridge University PressPrint publication year: 1997
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