Skip to main content

Ten Years After The Road to a Free Economy: The Author’s Self-evaluation of Privatisation

  • Chapter
Privatisation and Structural Change in Transition Economies

Part of the book series: Euro-Asian Studies ((EAS))

Abstract

Ten years have passed since the publication of my book The Road to a Free Economy: Shifting from a Socialist System — The Example of Hungary. It was the first book to offer comprehensive proposals for the post-socialist transition. This chapter assesses the book as I see it ten years later.2 Is this not an extremely self-centred undertaking? An advertisement for an old book that no one is buying these days? No. There are good ethical and intellectual reasons for assessing the book, as will be made clear.

Editorial note: The present version is an adaptation of the original article Ten Years After The Road to a Free Economy: The Author’s Self-Evaluation’ published by the World Bank. The original article gave a positive appraisal of the proposals concerning the privatisation strategy proposed in the book, and was partly negative concerning the macrostabilisation programme advocated in the book. Since the present volume is dealing with privatisation, the editors omitted the second, self-critical part of the article.

The author is grateful to the symposium participants and to Zsuzsa Dániel, Stanislaw Gomulka, Karel Kouba, and Kazimir Poznanski for stimulating comments and suggestions, to Mária Barát, Ágnes Benedict, Andrea Despot, Cecilia Hornok, and Julianna Parti for efficient research assistance, and to Brian McLean for excellent translation.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 39.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 54.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Andreff, Wladimir (1992), ‘French Privatization Techniques and Experience: A Model for Central-Eastern Europe?’ in Ferdinando Targetti (ed.), Privatization in Europe: West and East Experiences (Aldershot: Dartmouth), pp.135–53.

    Google Scholar 

  • Black, Bernard S., Reinier Kraakman, and Anna Tarassova (2000), ‘Russian Privatization and Corporate Governance: What Went Wrong?’, Stanford Law Review, 52(6), 1731–1808.

    Article  Google Scholar 

  • Blasi, Joseph R., Maya Kroumova and Douglas Kruse (1997), Kremlin Capitalism: The Privatization of The Russian Economy (Ithaca, NY: Cornell University Press).

    Google Scholar 

  • Bolton, Patrick, and Gerard Roland (1992), ‘Privatization Policies in Central and Eastern Europe’, Economic Policy, 15, October, 275–303.

    Article  Google Scholar 

  • Brabant, Jozef M. van (1992), ‘Divestment of State Capital’, in Kazimierz Z. Poznanski (ed.), Constructing Capitalism: The Reemergence of Civil Society and Liberal Economy in the Post-Communist World (Boulder, San Francisco, Oxford: Westview Press), pp.117–40.

    Google Scholar 

  • Braudel, Fernand (1985 [1975]), The Wheels of Commerce (London: Fontana Press, imprint of HarperCollins).

    Google Scholar 

  • Broadman, Harry G. (2000), ‘Reducing Structural Dominance and Entry Barriers in Russian Industry’, (Washington, DC: World Bank, Europe and Central Asia Department, Poverty Reduction and Economic Management Unit).

    Google Scholar 

  • Caballero, Ricardo, and Mohamad L. Hammour (2000), ‘Institutions, Crises and Restructuring’, Annual Bank Conference on Development Economics, Washington, DC: World Bank, 18–20 April.

    Book  Google Scholar 

  • CEIP (1999), Meeting Report, May 1999 (Washington, DC: Carnegie Endowment for International Peace).

    Google Scholar 

  • Coase, Ronald (1960), ‘The Problem of Social Cost’, Journal of Law and Economics, 17(2), 357–76.

    Article  Google Scholar 

  • Coffee Jr, John C. (1996), ‘Institutional Investors in Transitional Economies: Lessons from the Czech Experience’, in Roman Frydman, Cheryl Gray and Andrzej Rapaczynski (eds), Corporate Governance in Central Europe and Russia, Vol. 1 (New York: Central University Press).

    Google Scholar 

  • Coffee Jr, John C. (1998), ‘Investing in a Corporate Monitor for Transitional Economies: The Uncertain Lessons from the Czech and Polish Experiences’, in Klaus J. Hopt, Hideki Kanda, Mark J. Roe, Eddy Wymeersch and Stefan Prigge (eds), Comparative Corporate Governance (Oxford: Clarendon Press).

    Google Scholar 

  • Dabrowski, Marek, Stanislaw Gomulka and Jacek Rostowski (2001), ‘Whence Reform? A Critique of Stiglitz Perspective’, Journal of Policy Reform, 4, 291–324.

    Article  Google Scholar 

  • Desai, Raj M. and Itzhak Goldberg (2000), The Vicious Circles of Control. Regional Governments and Insiders in Privatized Russian Enterprises, World Bank Policy Research Working Paper 2287 (Washington, DC: World Bank).

    Book  Google Scholar 

  • Dyck, Alexander (2000), ‘Ownership Structure, Legal Protections, and Corporate Governance’, Annual Bank Conference on Development Economics, Washington, DC: World Bank, 18–20 April.

    Google Scholar 

  • Economic Commission for Europe (1999), Economic Survey of Europe 1999, No. 3 (New York: United Nations).

    Google Scholar 

  • Ellerman, David (1998), ‘Voucher Privatization with Investment Funds: An Institutional Analysis’, Policy Research Working Paper 1924 (Washington, DC: World Bank).

    Google Scholar 

  • Hayek, Friedrich A. (1960), The Constitution of Liberty (Chicago: Chicago University Press).

    Google Scholar 

  • Hayek, Friedrich A. (1989), Order — With or Without Design? (London: Centre for Research into Communist Economies).

    Google Scholar 

  • Klaus, Václav (1997), Renaissance: The Rebirth of Liberty in the Heart of Europe (Washington, DC: Cato Institute).

    Google Scholar 

  • Konings, Jozef (1997), ‘Firm Growth and Ownership in Transition Countries’, Economic Letters, 55, 413–18.

    Article  Google Scholar 

  • Konings, Jozef, Hartmut Lehmann and Mark E. Schaffer (1996), ‘Job Creation and Job Destruction in Transition Economy: Ownership, Firm Size and Gross Job Flows in Polish Manufacturing 1988–91’, Labor Economics, 3(3), 299–317.

    Article  Google Scholar 

  • Kornai, János (1990), The Road to a Free Economy: Shifting from a Socialist System — The Example of Hungary (New York: W.W. Norton; also available in Hungarian (1989), Indulatos röpirat a gazdasági átmenet ügyében (Budapest: HVG Kiadó).

    Google Scholar 

  • Kornai, János (1992a), ‘The Principles of Privatization in Eastern Europe’, De Economist, 140(2), 153–76.

    Article  Google Scholar 

  • Kornai, János (1992b), The Socialist System. The Political Economy of Communism (Princeton, NJ: Princeton University Press).

    Book  Google Scholar 

  • Kornai, János (1993), ‘The Evolution of Financial Discipline under the Postsocialist System’, Kyklos, 46(3), 315–36.

    Article  Google Scholar 

  • Lewandowski, Janusz, and Jan Szomburg (1989), ‘Property Reform as a Basis for Social and Economic Reform’, Communist Economies, 1(3), 257–68.

    Article  Google Scholar 

  • McKinnon, Ronald (1992), The Order of Economic Liberalization: Financial Control in the Transition to a Market Economy (Baltimore, MD: Johns Hopkins University Press).

    Google Scholar 

  • Murrell, Peter (1992a), ‘Conservative Political Philosophy and the Strategy of Economic Reform’, East European Politics and Societies, 6(1), 3–16.

    Article  Google Scholar 

  • Murrell, Peter (1992b), ‘Evolution in Economics and in the Economic Reform of Centrally Planned Economies’, in Christopher Clague and Gordon C. Rausser (eds), The Emergence of Market Economies in Eastern Europe (Oxford: Blackwell).

    Google Scholar 

  • Murrell, Peter (1992c), ‘Evolutionary and Radical Approaches to Economic Reform’, Economics of Planning, 25(1), 79–95.

    Google Scholar 

  • Murrell, Peter, and Yijiang Wang (1993), ‘When Privatization Should Be Delayed: The Effect of Communist Legacies on Organizational and Institutional Reform’, JournaI of Comparative Economics, 17(2), 385–406.

    Article  Google Scholar 

  • Nellis, John (1999), ‘Time to Rethink Privatization in Transition Economies?’, Finance and Development, 36(2), 16–19.

    Google Scholar 

  • OECD (Organization for Economic Co-operation and Development) (1998), Economic Survey of the Czech Republic, 1998 (Paris: OECD).

    Google Scholar 

  • OECD (2000), Economic Survey of the Czech Republic, 2000 (Paris: OECD).

    Google Scholar 

  • Pinto, Brian, Vladimir Derbentsov and Alexander Morozov (1999), ‘Dismantling Russia’s Non-payments System: Creating Conditions for Growth’, (Washington, DC: World Bank, Europe and Central Asia Department, Poverty Reduction and Economic Management Unit).

    Google Scholar 

  • Poznanski, Kazimierz Z. (1993), Poland’s Transition to Capitalism: Shock without Therapy’, in K.Z. Poznanski (ed.) Stabilization and Privatization in Poland (Boston: Kluwer Academic Publishers).

    Chapter  Google Scholar 

  • Roland, Gerard (2000), Transition and Economics: Politics, Markets, and Firms (Cambridge, MA: MIT Press).

    Google Scholar 

  • Schumpeter, Joseph A. (1968 [1911]), The Theory of Economic Development. An Inquiry into Profits, Capital, Credit, Interest and Business Cycles (Cambridge, MA: Harvard University Press).

    Google Scholar 

  • Schumpeter, Joseph A. (1976 [1942]), Capitalism, Socialism, and Democracy (New York: Harper and Row).

    Google Scholar 

Download references

Authors

Editor information

Editors and Affiliations

Copyright information

© 2003 Palgrave Macmillan, a division of Macmillan Publishers Limited

About this chapter

Cite this chapter

Kornai, J. (2003). Ten Years After The Road to a Free Economy: The Author’s Self-evaluation of Privatisation. In: Kalyuzhnova, Y., Andreff, W. (eds) Privatisation and Structural Change in Transition Economies. Euro-Asian Studies. Palgrave Macmillan, London. https://doi.org/10.1057/9780230378339_2

Download citation

Publish with us

Policies and ethics