Transformation as a Political-Economic Process

Abstract

The last years economics has been confronted with a new puzzle: the transformation of an economic system. The profession has enthousiastically adopted the challenge and produced a flood of publications. The question of objectives, of the final state to be reached has been treated extensively. The system elements or institutions which are required to support a fairly efficient market process are rather well known. There is much less unanimity in the profession about the process of transformation, the sequencing of steps, the pace, the appropriate procedures to liberalize, to monetize and to privatize. Of course, economic theory has been preoccupied with comparative statics rather than with dynamics. But dynamics in itself is less accessible for general theory in that the process, other than its objectives, is highly dependent upon the historical initial conditions which differ from country to country.

Helpful support from the Institute for Human Sciences, Vienna, is acknowledged. The author has got valuable suggestions from H. Hoen and seminars at Trento, Tubingen, and Vienna.