The enabling environment calls not only for markets for all kinds of intermediate and final products and services but also for all kinds of primary inputs, including capital and labor with their distinct characteristics. It furthermore requires markets that allocate different kinds of resources over time. Moreover, markets can function more or less smoothly only when there is an adequate institutional and legal framework for economic activity, ownership, enterprise formation, entrepreneurial decisionmaking, and other essential features of reasonably mature economies. These rules and regulations, and their institutional infrastructure, need not be overly complex. Indeed, simplicity and clarity are beneficial features of the legal and institutional frameworks. But that does not necessarily facilitate their speedy gestation. Finally, activities of microeconomic agents must be coordinated through macroeconomic policies that in part mirror the consensual preferences held by society's agents. This reflection should preferably be accommodated in such a way that economic agents can express their sociopolitical aspirations in a reasonably unhindered manner.
Rather than aiming primarily at maximizing static resource allocation and ensuring some minimum pace of reproduction, the overarching economic task should be the identification of a more dynamic growth path and the application of policies within established institutions and requisite policy instruments that are likely to facilitate reaching this growth path and advancing along it. At that stage, purely allocative decisions can temporarily be left to the market. However, maintaining dynamism in economic development is not something that can be reached by a once-and-for-all change in economic structure. It must be a fairly continuous process of identifying and exploiting temporary advantages or conditions that promise to yield such advantages provided the proper preliminary measures to seize the opportunity are indeed grasped. Seen in this perspective, the task of ensuring functioning markets should not be viewed out of proportion with the wider obligation incumbent upon good economic governance to ensure sustainable long-term modernization and development ( Brabant 1993a,b).
From these broad observations, it follows that, regardless of what may eventually crystallize, the market economy is an abstract notion, as discussed. Whatever real-life variant may be aimed at, it can be introduced only gradually. The speed of doing so is, of course, a function of the prevailing disarray and the acceptable cost of adjustment. That is to say, some changes in the development strategy and, more important, in the economic model can be introduced rapidly. These shifts may also be sought more gradually. In either case, unanticipated developments may call for fine-tuning the transformation strategy, perhaps even temporarily reversing it for tactical reasons. In contrast to the diversity in pace of
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Publication information: Book title: The Evolutionary Transition to Capitalism. Contributors: Kazimierz Z. Poznanski - Editor. Publisher: Westview Press. Place of publication: Boulder, CO. Publication year: 1995. Page number: 178.