The Linkage Between Economic and Political Reform in the Socialist Countries: A Supply-Side Explanation

Political reforms in the socialist countries cannot be understood with the traditional demand-side theories. The property-rights structure is a crucial element in deciding the level of social demand for democracy. But the institutionalization of political pluralism can only be explained by elite strategic thinking. Typically, Leninist elites do not opt for political reforms if they can successfully restructure the economic systems without making political changes. There are two primary reasons for the regime to take steps toward political pluralism: one is to stifle the conservative opponents in the regime who are against economic reform; the other is to strike a social contract with the society to make economic reform acceptable to the population. When the elites are forced to tinker with political reforms, the single-party multicandidate model usually precedes the multiparty solution. Democratization, however, may fail to bring about economic recovery and is vulnerable to the elite's change of mind and the pressure from more orthodox Leninist regimes.