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Alternative Methods of Institutional Development for Transition Economies

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  • John Marangos

Abstract

A radical economic change, such as moving from a centrally administered economy to an economy based on market relations, also requires reform of the institutional structure. The shock-therapy process of transition utilises market incentives to internalise the developmental process of institutions instead of relying on the government, an actor external to the whole process. In contrast, gradualists argue that the development of the institutional structure requires government action. Gradualists recommend active state intervention in institutional development. Empirical evidence is inconclusive as to the more appropriate method. It is argued that a combination of the two methods would produce an optimal sequence.

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Bibliographic Info

Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 158 (2002)
Issue (Month): 3 (September)
Pages: 483-

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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200209)158:3_483:amoidf_2.0.tx_2-j

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Cited by:
  1. Claude Mathieu & Yann Nicolas, 2006. "Coûts d'ajustement de la demande de travail : une comparaison entre la France et la République tchèque," Économie et Prévision, Programme National Persée, vol. 173(2), pages 135-152.
  2. John Marangos, 2011. "Social Change versus Transition: The Political Economy of Institutions and Transitional Economies," Forum for Social Economics, Springer, vol. 40(1), pages 119-137, April.

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