Abstract
Assessments of postcommunist economic reforms by systems specialists and those stewarding G-7 assistance are sharply polarized. Both acknowledge that official Eastern European data indicate catastrophic falls in GNP far deeper than the Great Depression of 1929 and a myriad of other failures including rampant inflation, anticompetitive abuses, graft, corruption, and the persistence of socialist ownership and controls. But while the former interpret these outcomes as a consequence of the communist legacy and transmuted anticompetitive institutions, the latter in Schumpeterian fashion interpret them as a successful prelude to competitive capitalism, as the postcommunist East traverses the J curve of recovery to rapid modernization. This essay surveys the recent literature and, siding with the systems theorists, explains why the G-7's interpretation of macroindicators is misleading.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Aslund, Anders. "Why Goulash-Communism is a Liability Now,"Transition, World Bank, 5, May–June 1994a, p. 6.
__. "Lessons of the First Four Years of Systemic Change in Eastern Europe,"Journal of Comparative Economics, 19, 1, August 1994b, pp. 22–38.
Blanchard, Olivier J.; Boycko, Maxim; Dabrowski, Marek; Dornbusch, Rudiger; Layard, Richard; Shleifer, Andrei.Post-Communist Reform, Cambridge, MA: MIT Press, 1994.
Blanchard, Olivier J.; Dornbusch, Rudiger; Krugman, Paul; Layard, Richard; Summers, Lawrence.Reform in Eastern Europe, Cambridge, MA: MIT Press, 1994.
Brada, Josef C.; King, Arthur E. "Is There Still a J Curve for the Economic Transition from Socialism to Capitalism,"Economics of Planning, 25, 1, 1992, pp. 37–53.
Bush, Keith.From the Command Economy to the Market, Dartmouth, VT: Aldershot Brookfield, 1991.
Campbell, Robert, ed.The Postcommunist Economic Transformation: Essays in Honor of Gregory Grossman, Boulder, CO: Westview Press, 1994
Chavance, Bernard,The Transformation of Communist Systems (translated by Charles Hauss), Boulder, CO: Westview Press, 1994.
Dornbusch, Rudiger; Nölling, Wilhelm; Layard, Richard, eds.Postwar Economic Reconstruction and Lessons for the East Today, Cambridge, MA: MIT Press, 1994.
Economic Commission for Europe.Economic Survey of Europe in 1993–1994, New York, NY and Geneva, Switzerland: United Nations Publication, 1994.
Ellman, Michael. "Transformation, Depression, and Economics: Some Lessons,"Journal of Comparative Economics, 19, 1, August 1994, pp. 1–21.
Fogel, Daniel S., ed.Managing in Emerging Market Economies, Boulder, CO: Westview Press, 1994.
Friedman, Thomas. "Yeltsin's Economic Checknya,"The New York Times, February 1, 1995, p. 5.
Goldman, Marshall.Russia's Failed Transition: Lost Opportunities, New York, NY: Norton, 1994.
Gomulka, Stanislaw. "The Causes of Recession Following Stabilization,"Comparative Economic Studies, 33, 2, Summer 1991, pp. 71–89.
Hanson, Philip.From Stagnation to Catastroika, New York, NY: Praeger Publishers, 1992.
Keren, Michael; Ofer, Gur, eds.Trials of Transition, Boulder, CO: Westview Press, 1992.
Kornai, János. "Transformational Recession: The Main Causes,"Journal of Comparative Economics, 19, 1, August 1994, pp. 39–63.
Leamer, Edward E.; Taylor, Mark P. "The Empirics of Economic Growth in Previously Centrally Planned Economies," April 1994, unpublished manuscript.
McKinnon, Ronald.The Order of Economic Liberalization: Financial Control in The Transition to a Market Economy, Baltimore, MD: Johns Hopkins, 1991.
Milner, Boris Z.; Lvov, Dmitry S.Soviet Market Economy: Challenges and Reality, New York, NY: North Holland, 1991.
Osband, Kent. "Economic Crisis in a Shortage Economy,"Journal of Political Economy, 100, 4, August 1992, pp. 673–89.
Poznanski, Kazimierz, ed.The Evolutionary Transition to Capitalism, Boulder, CO: Westview Press, 1994.
Roberts, Bryan. "Welfare Consequences of Price Liberalization," paper presented at the American Economics Meetings, Washington, DC, January 8, 1995.
Rosefielde, Steven. "Beyond Catastroika: Prospects for Market Transition in the Commonwealth of Independent States,"Atlantic Economic Journal, 20, 1, March 1992, pp. 1–8.
Rosefielde, Steven; Pfouts, R. W. "Economic Optimization and Technical Efficiency in Soviet Enterprises Jointly Regulated by Plans and Incentives,"European Economic Review, 32, 6, 1988, pp. 1285–99.
Rutland, Peter. "Privatisation in Russia: One Step Forward: Two Steps Back?,"Europe-Asia Studies, 46, 7, 1994, forthcoming.
Sacks, Jeffrey.Poland's Jump to the Market Economy, Cambridge, MA: MIT Press, 1994a.
__. "Russia's Struggle with Stabilization,"Transition, World Bank, 5, 4, May–June 1994b, pp. 7–10.
Schmidt, Klaus M.; Schnitzer, Monika. "Privatization and Management Incentives in the Transition Period in Eastern Europe,"Journal of Comparative Economics, 17, 1993, pp. 264–87.
Sterling, Claire.Thieves World, New York, NY: Simon Schuster, 1994.
Stiglitz, Joseph E.Whither Socialism, Cambridge, MA: MIT Press, 1994.
Sutela, Pekka, ed.The Russian Economy in Crisis and Transition, Finland: Bank of Finland, 1993.
Taylor, Lance. "The Market Met Its Match: Lessons for the Future from the Transition's Initial Years,"Journal of Comparative Economics, 19, 1, August 1994, pp. 64–87.
Transformation in Progress, proceedings of the First Roundtable Conference, Budapest: Institute for World Economics, Budapest, 1994.
Yavlinsky, Grigory; Bragrinsky, Serguey. "The Inefficiency ofLaissez-Faire in Russia: Hysteresis Effects and the Need for Policy-Led Transformation,"Journal of Comparative Economics, 19, 1, August 1994, pp. 88–116.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Rosefielde, S. Eastern european economic reform: Transition or mutation?The emergence of market economics in Eastern Europe Christopher Clague and Gordon Rausser, editors Blackwell Publishers, 1992. Atlantic Economic Journal 23, 323–332 (1995). https://doi.org/10.1007/BF02298769
Issue Date:
DOI: https://doi.org/10.1007/BF02298769