Abstract
This chapter explores a historical example of a systemic change that occurred in the late twentieth century, that is, the transition from a socialist planned economy to a capitalist market economy. Starting from the debate among Marxists on the “transition from capitalism to socialism,” it moves to the process of dissolution of the socialist regime. In the early stage of the transition to a market economy, liberalization and denationalization emerged at the forefront, while the task of forming sound institutions was recognized later. In the transition process among Central European countries, both path dependence and goal orientation played a non-negligible role. However, exogenously given goals may reveal its incongruence in several areas.
Kiichiro Yagi, “Taisei Tenkan to Seido no Seiji-Keizaigaku (System Transition and Institutional Political Economy),” Russia Eurasia Keizai: Kenkyu to Shiryo (Russian and Eurasian Economy: Studies and Materials), no. 928 (Nov./Dec. 2009). Institute of Eurasian Studies.
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Notes
- 1.
This genre was born at the same time of the historical change around 1990 and matured around 2000. The European Bank for Reconstruction and Development (EBRD) was founded in April 1991 to support the transition countries in Europe, and CIS contributed much for the growth of this genre. It promoted the journal Economics of Transition since 1993 and published its official report, Transition Report, since 1994. As one of the most representative surveys of this genre, confer to Lavigne (1999).
- 2.
His view was evidently pro-Chinese. When new leaders in China turned to depreciate the Cultural Revolution under Mao, he resigned from the presidency of the Franco-Chinese Friendship Society in protest.
- 3.
A group of economists that focuses on the structure and functions of property rights. This approach stimulated the progress in the theory of firm. Representative scholars are Armen Alchian, Harold Demsetz, Oliver Hart, Svetozar Pejovich, and Erik G. Furubotn.
- 4.
David Kotz interpreted the change toward market economy in Russia as the coup d’etat of the state elites to legitimize their usurpation by the introduction of private ownership and market economy. See Kotz and Weir (1997).
- 5.
I traced this adaptive modification of Chinese Marxism in Yagi (2009).
- 6.
Pfaff (2006) further added the fourth and the fifth propositions: “In a consolidated mono-organizational dictatorship, a repressive equilibrium can be instituted such that political voice (insurgent and reformist) will be too costly for most citizens no matter how dissatisfied (p. 25). Exit can trigger voice, but during an episode of political contention propelled by exit, beyond a certain point the occurrence of exit depressed the occurrence of voice” (p. 29). While the fourth reflects Pfaff’s view of East Germany before 1989, the fifth expresses his view of the situation after the opening of the wall.
- 7.
This is originally the term that John Roger Commons proposed as the key perspective for his institutional economics. “Habit is a repetition of acts, determined if they be ‘determined’—by physiological process that occurred in the past. But the binding, or ‘determining’ force of custom is the similarity of expectations of gain or loss imagined in the future. This ‘futurity, while from the subjective standpoint it belongs to the individualistic science of sociology, yet, from the transactional standpoint, it is none other than the existing securities, conformities, liberties, and exposures based on social sanction” (Commons 1934, pp. 740–741).
- 8.
http://www.europarl.europe.eu/enlargement/ec/pdf/cop_en.pdf. (Access on 30/08/2019).
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Yagi, K. (2020). System Transition and the Institutional Political Economy. In: Yagi, K. (eds) From Reproduction to Evolutionary Governance. Evolutionary Economics and Social Complexity Science, vol 20. Springer, Tokyo. https://doi.org/10.1007/978-4-431-54998-7_6
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