The Search for a Stable Mode of Reform
Reform is a change in the system. The economic system generally has three functions: incentives, resource allocation, and interest distribution. Systemic change will necessarily alter the efficiency of these three functions. Improving the efficiency of incentives and resource allocation will directly improve the productivity of resources of a given quantity and quality.>sup>1>/sup> However, if, in the course of improving incentives and resource allocation, a disequilibrium in the distribution of interests appears, then it will not only increase the cost of reform but it may well become the major cost. The reasons for this are, first, if, in the course of reform, a group of people suffers losses, it will overtly or covertly adopt an uncooperative or resistant attitude, thus increasing the cost of implementing reform. Second, unfairness in the distribution of interests will directly instigate friction among different interest groups. Losses resulting from such friction will become a direct part of the price of reform. Third, disequilibrium in interest distribution will also lead to behavior that disregards or even disrupts the existing economic order; disruption of economic order itself is a social loss. Fourth, disruption of the existing pattern of interests caused by reform can lead to relatively strong social unrest (such as the panic buying that occurred in 1988). Such social unrest would either deprive people of the expectation of stability or exact a greater price from them to overcome.
Volume (Year): 29 (1996)
Issue (Month): 2 (March)
|Contact details of provider:|| Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=110901|
When requesting a correction, please mention this item's handle: RePEc:mes:chinec:v:29:y:1996:i:2:p:39-59. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen)The email address of this maintainer does not seem to be valid anymore. Please ask Chris Nguyen to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.