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How entrepreneurship could be promoted after the collapse of a socialist economic system


  • Åslund, Anders


The purpose of this paper is to provide empirical observations from postcommunist countries to suggest which policy sets applied make most sense for the promotion of micro-enterprises. Three overall conclusions can be drawn. First, an early, comprehensive and radical reform is the superior approach for the promotion of entrepreneurship, because the prevalence of rent seeking interests is so easily established and it is so difficult to break. The second conclusion, however, is that a certain space for small enterprises can be created even in a very corrupt economy dominated by severe rent seeking. A third conclusion is that the Russian deregulation of 2002 represents the worst of all worlds, because all its elements were incremental.

Suggested Citation

  • Åslund, Anders, 2012. "How entrepreneurship could be promoted after the collapse of a socialist economic system," Journal of Asian Economics, Elsevier, vol. 23(2), pages 157-167.
  • Handle: RePEc:eee:asieco:v:23:y:2012:i:2:p:157-167 DOI: 10.1016/j.asieco.2011.09.003

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    References listed on IDEAS

    1. World Bank, 2002. "Transition, The First Ten Years : Analysis and Lessons for Eastern Europe and the Former Soviet Union," World Bank Publications, The World Bank, number 14042.
    2. Simon Johnson & Daniel Kaufman & Andrei Shleifer, 1997. "The Unofficial Economy in Transition," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 159-240.
    3. World Bank & International Finance Corporation, "undated". "Doing Business in Juba 2011," World Bank Other Operational Studies 13441, The World Bank.
    4. Hellman, Joel S. & Jones, Geraint & Kaufmann, daniel, 2000. ""Seize the state, seize the day": state capture, corruption, and influence in transition," Policy Research Working Paper Series 2444, The World Bank.
    5. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, vol. 83(2), pages 409-414, May.
    6. repec:wbk:wboper:12195 is not listed on IDEAS
    7. Simon Johnson, 1994. "Private Business in Eastern Europe," NBER Chapters,in: The Transition in Eastern Europe, Volume 2: Restructuring, pages 245-292 National Bureau of Economic Research, Inc.
    8. Simon Johnson & John McMillan & Christopher Woodruff, 2000. "Entrepreneurs and the Ordering of Institutional Reform: Poland, Slovakia, Romania, Russia and Ukraine Compared," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(1), pages 1-36, March.
    9. David Lipton & Jeffrey D. Sachs, 1990. "Creating a Market Economy in Eastern Europe: The Case of Poland," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 75-148.
    10. repec:hrv:faseco:30728045 is not listed on IDEAS
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    More about this item


    Small enterprises; Postcommunist transition; Economic systems; Tax system; Regulation;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy


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