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Economic Reforms and Constitutional Transition

Author

Listed:
  • Jeffrey Sachs

    (Center for International Development and Department of Economics Harvard University)

  • Wing Thye Woo

    (Department of Economic University of California at Davis)

  • Xiaokai Yang

    (Center for International Development at Harvard University
    Department of Economics, Monash University)

Abstract

This paper investigates the relationship between economic reforms and constitutional transition, which has been neglected by many transition economists. It is argued that assessment of reform performance might be very misleading if it is not recognized that economic reforms are just a small part of large scale of constitutional transition. Rivalry and competition between states and between political forces within each country are the driving forces for constitutional transition. We use Russia as an example of economic reforms associated with constitutional transition and China as an example of economic reforms in the absence of constitutional transition to examine features and problems in the two patterns of transition. It is concluded that under political monopoly of the ruling party, economic transition will be hijacked by state opportunism. Dual track approach to economic transition may generate very high long-term cost of constitutional transition that might outweigh its short-term benefit of buying out the vested interests.

Suggested Citation

  • Jeffrey Sachs & Wing Thye Woo & Xiaokai Yang, 2000. "Economic Reforms and Constitutional Transition," Annals of Economics and Finance, Society for AEF, vol. 1(2), pages 423-479, November.
  • Handle: RePEc:cuf:journl:y:2000:v:1:i:2:p:423-479
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Justin Yifu Lin & David Rosenblatt, 2012. "Shifting patterns of economic growth and rethinking development," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 15(3), pages 171-194, September.
    2. Liu, Wai-Man & Ngo, Phong, 2012. "Voting with Your Feet: Political Competition and Internal Migration in the United States," MPRA Paper 43601, University Library of Munich, Germany.
    3. Shiuh-Shen Chien & Ian Gordon, 2008. "Territorial Competition in China and the West," Regional Studies, Taylor & Francis Journals, vol. 42(1), pages 31-49.
    4. Jeffrey Sachs & Xiaokai Yang & Dingsheng Zhang, 2005. "Globalization, Dual Economy, And Economic Development," World Scientific Book Chapters,in: An Inframarginal Approach To Trade Theory, chapter 16, pages 349-382 World Scientific Publishing Co. Pte. Ltd..
    5. Yang, Xiaokai, 2001. "China's entry to the WTO," China Economic Review, Elsevier, vol. 11(4), pages 437-442.
    6. Justin Yifu Lin, 2007. "Development and Transition : Idea, Strategy, and Viability," Development Economics Working Papers 22709, East Asian Bureau of Economic Research.
    7. Sean M. Dougherty & Robert H. McGuckin, 2001. "The Effect of Ownership Structure and Jurisdictional Governance on Productivity in Chinese Enterprises," Economics Program Working Papers 02-01, The Conference Board, Economics Program, revised Jan 2002.
    8. repec:wsi:jecxxx:v:20:y:2012:i:02:n:s0218495812500082 is not listed on IDEAS
    9. Labrousse, Agnès, 2010. "Nouvelle économie du développement et essais cliniques randomisés : une mise en perspective d’un outil de preuve et de gouvernement," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 7.
    10. Cheng, Wenli & Yang, Xiaokai, 2004. "Inframarginal analysis of division of labor: A survey," Journal of Economic Behavior & Organization, Elsevier, vol. 55(2), pages 137-174, October.
    11. Jian Li & Kunrong Shen & Ru Zhang, 2011. "Measuring Knowledge Spillovers: A Non-appropriable Returns Perspective," Annals of Economics and Finance, Society for AEF, vol. 12(2), pages 265-293, November.
    12. Wang, Chan, 2012. "A very preliminary survey on growth and development," MPRA Paper 39037, University Library of Munich, Germany.
    13. Tran, Hien Thu & Santarelli, Enrico, 2018. "Successful Transition to a Market Economy in Vietnam: An Interpretation from Organizational Ecology Theory," GLO Discussion Paper Series 181, Global Labor Organization (GLO).
    14. Enrico Colombatto, 2006. "Law, Economics and the Institutional Approach to Development and Transition: towards an Evolutionary Perspective," ICER Working Papers 7-2006, ICER - International Centre for Economic Research.
    15. Piet van Gennip, 2005. "Loan Extension in China: a Rational Affair," DNB Working Papers 037, Netherlands Central Bank, Research Department.
    16. Shaomin Li & Kiran Karande & Dongsheng Zhou, 2009. "The Effect of the Governance Environment on Marketing Channel Behaviors: The Diamond Industries in the U.S., China, and Hong Kong," Journal of Business Ethics, Springer, vol. 88(3), pages 453-471, October.

    More about this item

    Keywords

    Transition economies; Constitutional economics; Inframarginal analysis; State opportunism; Dual track approach; Division of labor; Shock therapy; Gradualism;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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