The Economic Transformation of Eastern Europe: Views from Within

The Economic Transformation of Eastern Europe: Views from Within

The Economic Transformation of Eastern Europe: Views from Within

The Economic Transformation of Eastern Europe: Views from Within

Synopsis

This volume provides an up-to-date account of how the process of economic transition in Eastern Europe is unfolding from the point of view of Eastern European economists assessing their native economies. The authors have personally experienced the frustrations of the previous Stalinist system of central planning and public ownership, as well as the difficulties and pitfalls of designing new systems based on markets and private ownership. The book focuses on the three countries of Eastern Europe leading the reform efforts--Czechoslovakia, Hungary, and Poland--and points out similarities and differences in their reform strategies.

Excerpt

The unexpected and dramatic political events since 1989 in Eastern Europe (defined traditionally as Albania, Bulgaria, Czechoslovakia, the German Democratic Republic, Hungary, Poland, Romania, and Yugoslavia) have led to unprecedented calls for economic reform. To a greater or lesser degree, all of these nations are currently seeking the means to bring their economies from a system of state ownership and central planning based on the Soviet model (Yugoslavia deviated the most from the Soviet model when it chose a labor-managed approach), to one characterized by private ownership and market solutions, based on the model of the Western industrialized nations.

The path toward this type of systemic change is an uncharted one. Not only does the process involve shifting production decisions in order to respond to consumer demand as determined by the market through prices, but also it must unburden the public sector by shifting the means of production to private hands. It also includes the creation of institutions and policy-making bodies that will allow private agents to operate efficiently and effectively. All of this must preserve the social fabric of the countries, many of which are threatened by rising ethnic tensions and sub- nationalisms. This volume describes the evolving transformations and the burdens they impose on the economic system.

The pace of change varies among the countries. The path of the former German Democratic Republic, now eastern Germany, will not be discussed here because it is a special case. The three other countries that seem most committed to the process of transformation, as reflected in their . . .

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