The Soviet Union and the nations of Eastern Europe are undergoing a historically unprecedented restructuring as they move inexorably from centrally planned economies toward market economies. This historic transition must be guided by a coherent set of stabilization policies to reduce the threat of macroeconomic collapse and the threat of inflation. As a precursor to price liberalization, private property rights must be created, distributed and credibly enforced in order to ensure that these rights can be freely traded at market prices. The creation and distribution of property rights must find a balance between the competing goals of equity on the one hand and efficient governance structures on the other. Finally, provision must be made for a social safety net, sufficiently broad to minimize the short run burden of an inevitably costly adjustment process in order to avoid a crisis of constitutional authority. A program of “Socialist Privatization” is proposed as a political means of establishing market capitalism on the basis of an equitable distribution of wealth.
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Find related papers by JEL classification: P1 - Economic Systems - - Capitalist Systems P2 - Economic Systems - - Socialist Systems and Transition Economies P3 - Economic Systems - - Socialist Institutions and Their Transitions O1 - Economic Development, Technological Change, and Growth - - Economic Development O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy D7 - Microeconomics - - Analysis of Collective Decision-Making E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook H1 - Public Economics - - Structure and Scope of Government
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