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A Political Economy Approach to the Neoclassical Model of Transition

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  • John Marangos

    (University of Ballarat)

Abstract

The neoclassical model of transition from a centrally-administered socialist economic system to a market-based economic system was implemented in Russia and Eastern Europe. The neoclassical process took the form of either shock therapy or gradualism. However, each approach actually involved a combination of shock therapy and gradualist policies, making the distinction between the two approaches unfounded. In addition, both approaches suffered by the innate inadequacies of neoclassical economic analysis as being politically/institutionally naked. Both shock therapy supporters and gradualist neoclassical economists did not provide a specific process of institutional development, favouring a gradual market-driven institutional outcome. With regard to the political structure, democracy was inconsistent with shock therapy, while active state intervention during transition was inconsistent with the ultimate goal of the gradualist neoclassical economists of competitive capitalism. Copyright 2002 The American Journal of Economics and Sociology.

Suggested Citation

  • John Marangos, 2002. "A Political Economy Approach to the Neoclassical Model of Transition," American Journal of Economics and Sociology, Wiley Blackwell, vol. 61(1), pages 259-276, January.
  • Handle: RePEc:bla:ajecsc:v:61:y:2002:i:1:p:259-276
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    Citations

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    Cited by:

    1. Laura Taylor & Mary Wrenn, 2003. "Forging new relationships: Social capital in the transistion," Forum for Social Economics, Taylor & Francis Journals, vol. 33(1), pages 1-11, January.
    2. Bukvić, Rajko, 2013. "Transition in Serbia: Foundations, results and perspectives," MPRA Paper 70166, University Library of Munich, Germany, revised 08 Nov 2013.
    3. Ichiro Iwasaki & Taku Suzuki, 2016. "Radicalism Versus Gradualism: An Analytical Survey Of The Transition Strategy Debate," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 807-834, September.
    4. Dimiter Ialnazov & Nikolay Nenovsky, 2010. "The evolution of post-communist countries: An interpretation from the perspective of cooperation," ICER Working Papers 03-2010, ICER - International Centre for Economic Research.
    5. Ivanova, Ludmila & Dimitrov, Plamen & Ovcharova, Dora & Dellava, Jocilyn & Hoffman, Daniel J., 2006. "Economic transition and household food consumption: A study of Bulgaria from 1985 to 2002," Economics & Human Biology, Elsevier, vol. 4(3), pages 383-397, December.
    6. Bukvić, Rajko, 2011. "Transformaciona kriza i perspektive privrede Srbije u epohi globalizacije i finansijske krize
      [Transformational crisis and perspectives of Serbian economy in the era of globalization and financial
      ," MPRA Paper 69949, University Library of Munich, Germany, revised 2011.
    7. Brian O’Boyle & Terrence McDonough, 2017. "Bourgeois Ideology and Mathematical Economics – A Reply to Tony Lawson," Economic Thought, World Economics Association, vol. 6(1), pages 16-34, March.
    8. Bukvić, Rajko, 2014. "Смещение Неоклассической Экономической Парадигмы ‒ Предпосылка Повышения Качества Макроэкономического Образования
      [Removal of the neoclassical economic paradigm – condition for the improving of mac
      ," MPRA Paper 81295, University Library of Munich, Germany, revised 2014.
    9. Dimiter Ialnazov & Nikolay Nenovsky, 2011. "A Game Theory Interpretation of the Post-Communist Evolution," Journal of Economic Issues, Taylor & Francis Journals, vol. 45(1), pages 41-56.
    10. Bukvić, Rajko & Pavlović, Radica, 2014. "Неокласична Економска Теорија И Проблеми Економског Развоја
      [Neoclassical economic theory and the problems of economic development]
      ," MPRA Paper 70092, University Library of Munich, Germany, revised 08 Apr 2014.
    11. Bukvić, Rajko, 2010. "Foundations, results and perspectives of transition: A case of Serbia," MPRA Paper 69873, University Library of Munich, Germany, revised 2010.
    12. Damir Stokovac & Sandra Sokcevic & Iva Vidos, 2013. "Foreign Direct Investment As A Key Element Of Economic Growth," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 9, pages 391-402.
    13. Bukvić, Rajko, 2015. "Неоклассическая Экономическая Теория И Экономическая Действительность
      [Neoclassical Economic Theory and Economic Reality]
      ," MPRA Paper 70769, University Library of Munich, Germany, revised 2015.

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