Abstract
Using a behavioral model of political decisionmaking, it is argued that an increasing population size and/or an increasing efficiency of production in a private enterprise economy relative to a centrally planned economy may create the conditions for a self-interested nomenklatura in a Soviet-type economy to consider a transition to a market economy. This transition may be thwarted, however, by the threat for prospective private enterpreneurs of exploitation after the change of regime. Some form of political pluralism guaranteeing sufficient political influence to private entrepreneurs appears to be required for a successful transition. The analysis shows that such a combined political and economic reform can be in the interest of the nomenklatura, thereby providing an endogenous behavioral explanation for a change of regime.
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A first and very preliminary draft of this paper was presented at the EEA and EARIE meetings in 1990, both in Lisbon. The authors are grateful for comments from Michael Ellman and Wim Swaan, from participants at the aforementioned meetings and the LOS-centre seminar (Bergen, Norway), as well as for financial support from the Netherlands Organization for Scientific Research. The usual disclaimer applies.
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van Winden, F., de Wit, G. Nomenklatura, state monopoly, and private enterprise. Public Choice 77, 573–594 (1993). https://doi.org/10.1007/BF01047861
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DOI: https://doi.org/10.1007/BF01047861