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Why the Transition from Communism Is So Difficult

Author

Listed:
  • Mancur Olson, Jr.

    (University of Maryland)

Abstract

After the defeat of fascism, there were economic miracles, but after the collapse of communism, economic performance has been poor. This address develops a theory of power that explains this difference and other puzzles. When those with power have an encompassing stake in society, they have an incentive to make it productive. When those with power have only a narrow interest in society, their incentive is to seek redistributions without concern for social costs. After fascism, the encompassing interests of majorities prevailed, whereas after communism narrow interests, such as large and uneconomic state enterprises, have had disproportionate political influence.

Suggested Citation

  • Mancur Olson, Jr., 1995. "Why the Transition from Communism Is So Difficult," Eastern Economic Journal, Eastern Economic Association, vol. 21(4), pages 437-461, Fall.
  • Handle: RePEc:eej:eeconj:v:21:y:1995:i:4:p:437-461
    as

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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume21/V21N4P437_461.pdf
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    Citations

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    Cited by:

    1. Nikolay Nenovsky & Yorgos Rizopoulos, 2004. "Peut-on mesurer le changement institutionnel du régime monétaire ?," Revue d'Économie Financière, Programme National Persée, vol. 75(2), pages 17-36.
    2. Nikolay Nenovsky & Yorgos Rizopoulos, 2004. "Measuring the Institutional Change of the Monetary Regime in a Political Economy Perspective (Groups of interest and monetary variables during the Currency Board introduction in Bulgaria)," William Davidson Institute Working Papers Series wp732, William Davidson Institute at the University of Michigan.
    3. Neyapti, Bilin, 2001. "Central bank independence and economic performance in eastern Europe," Economic Systems, Elsevier, vol. 25(4), pages 381-399, December.
    4. Koford, Kenneth, 2000. "Citizen restraints on "Leviathan" government: transition politics in Bulgaria," European Journal of Political Economy, Elsevier, vol. 16(2), pages 307-338, June.
    5. Lazarev, Valery & Gregory, Paul, 2003. "Commissars and cars: A case study in the political economy of dictatorship," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 1-19, March.

    More about this item

    Keywords

    Communism;

    JEL classification:

    • P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform

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