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Institutional Reform: Irresistible Forces and Immovable Objects

  • Christopher A. Hartwell

Abstract

Economists’ conception of institutional change prior to the transition from communism was mostly treated either as an exogenously-inspired event or a slow, gradual process. However, the events of 1989–1991 proved the necessity of creating new frameworks for thinking about how institutions can be changed or reformed. This chapter examines institutional reform in Central and Eastern Europe and the former Soviet Union, with a focus on the various policies enacted as well as the timing and sequencing of institutional reforms. The key lesson of successful institutional reform is based on the need to successfully shape expectations; countries that moved fastest in both their political and economic policy reform also set the stage for successful institutional development in the long-run.

Keywords

Institutions Institutional Change Reforms Macroeconomic Stabilization Property Rights Transition Type II Policies 

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© Christopher A. Hartwell 2015

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  • Christopher A. Hartwell

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