Nomenklatura, state monopoly, and private enterprise

Abstract

So far attention has been focused on the determinants of self-employment in Western market economies. In this chapter we shift our attention to the centrally planned economies of Eastern Europe and the former Soviet republics.¹ In particular, we investigate political economic conditions that may stimulate or inhibit a transition from a centrally planned economy to a market economy. These conditions can be seen as possible determinants of self-employment, as self-employment is only allowed in a market economy. In our analysis we use a general-equilibrium model of the kind presented in Chapters 2 and 3 of this book.