Radical and Gradualist Strategies for Reform

Abstract

The wave of systemic changes has triggered a lively theoretical discussion on the course of the overall reform programme The major dividing line in the theoretical debate is between the radical ‘big bang’ school, also called the shock therapy approach, and the gradualist, evolutionary school. Shock therapists advocate the application of sweeping, state-led reforms attacking all aspects of the economy at once. Gradualists prefer a self-grown order and a carefully prepared sequence of steps, each preparing the ground for a smooth introduction of the next one. The controversy generated by the debate on shock therapy versus gradualism reflects in large measure differences over speed. At issue is the desirability of effecting a quick break with the old system by adopting a rapid transition strategy. This contrasts with a slower approach to transition, in which the institutions inherited from the old system are gradually modified ostensibly in line with the social, political and cultural specifics of a given country.⁸⁸