Assistance to the transition economies: were there alternatives?
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1. Twelve years after the fall of the Berlin Wall, domestic and international analysts
of the transition economies by and large agree that the transition from central planning to a market economy has been exceedingly difficult. There has also been a major debate about the extent to which the
transition to date has succeeded or failed. In this paper, I provide an assessment of the policies that were followed and I discuss the extent to which there were known alternatives that could have resulted in superior outcomes in terms of
(a) GDP growth and other principal performance indicators, (b) building honest and competent institutions, and (c) creating a more transparent and less corrupt system of corporate and national governance.
2. I start in Section 2 by providing a brief overview of performance since 1989. In
Section 3 I discuss the recommendations that were made and policies that were followed. I conclude in Section 4 by assessing the extent to which alternative paths could have been followed and what the likely outcomes would have been.
3. While my goal is to present a relatively comprehensive view of the transition countries as a whole, I obviously cannot cover in-depth all the countries of the former Soviet bloc, former Yugoslavia and Albania. In presenting data and examples, I hence focus primarily on the five Central European countries (Czech Republic, Hungary, Poland, Slovakia, and Slovenia)
that were the first to launch the transition, and on Russia as the principal country of the former Soviet Union and now of the Commonwealth of Independent States (CIS). My secondary focus is on the three Baltic countries (Estonia, Latvia, and Lithuania) that staged a relatively fast transition, the Balkan countries that have not been affected by war or other conflicts (Albania, Bulgaria, and Romania), and
Ukraine as the second-largest economy of
the former Soviet Union and now CIS.
JOUR
Svejnar, Jan
2002
Background paper on Transition Economies. Operations Evaluation Department, Washington, DC: The World Bank. Unpublished
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