Liberalization and its Consequences

Liberalization and its Consequences

A Comparative Perspective on Latin America and Eastern Europe

Edited by Werner Baer and Joseph L. Love

The essays in this volume describe, analyse and compare the achievements and the failures of societies that adopted market-based economies within a democratic polity after a long period of communist rule (Russia and Eastern Europe) or military authoritarianism (Latin America). Together, they also trace the rocky course of liberal economic policies over the whole twentieth century.

Chapter 4: Economic transition in Eastern Europe: how much political support does it have?

Josef C. Brada, Donald V. Coes and William Maloney


Baer 01 chap 1 19/10/00 11:47 am Page 74 4. Economic transition in Eastern Europe: how successful is the project and how much political support does it have? Josef C. Brada HOW SHOULD WE JUDGE THE TRANSITION? The question above is of course the wrong question to ask. The opinions of outsiders are largely irrelevant to how the populations of East Europe judge how their economies have performed, just as they are irrelevant to the political support that these populations will provide for these efforts at transformation. I nevertheless ask this question, precisely to caution the reader against attempting to answer it, or at least to answer it in the way that it has generally been approached. Many intellectuals and policymakers have, of course, sought to answer it, but in ways that strike me as problematic and unlikely to lead to satisfactory answers. The Economic Consequences of Transition Evaluations of economic performance fall into two categories. In one of these we find analyses that point to the decline in output in the transition economies and view this as evidence that transition strategies were wrong, largely because they called for excessively aggressive stabilization policies, and because they relied on market mechanisms too soon and too extensively. These policies are often seen as the result of a liberal economic ideology that was imposed on the region by western advisors and especially by the International Monetary Fund (IMF) and the World Bank, which, by virtue of their command over resources and expertise,...

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