Transition and Growth in Post-Communist Countries
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Transition and Growth in Post-Communist Countries

The Ten-year Experience

Edited by Lucjan T. Orlowski

Transition and Growth in Post-Communist Countries documents the first ten years of economic transition in Central and Eastern Europe.
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Chapter 10: Reforming welfare states in post-communist countries

Nicholas Barr

Extract

10. Reforming welfare states in postcommunist countries1 Nicholas Barr This chapter argues that the communist welfare state was, for the most part, well-adapted to the old order and – precisely for that reason – is systematically and predictably ill-suited to a market economy. Since the range of the welfare state – income transfers, health and health care, and education and training – is far too large for a single chapter, discussion is restricted in several ways. First, though reform involves both an economic transition, from central planning to a market economy, and a political transition, from totalitarian to more democratic forms of government, this chapter discusses only economic aspects. Second, the chapter focuses on what is distinctive about the transition from plan to market, as opposed to developmental issues, or more general discussion of the reform of the state sector. Thus the chapter concentrates on systemic issues and hence on the principles of reform rather than on country-specific detail. Third, there is no attempt to cover all the components of the welfare state. Most of the chapter is about income transfers and, within those, pensions; there is some discussion of education, but only aspects which are directly relevant to systemic change. Health, though vitally important for economic, political and social reasons, is not discussed, partly for reasons of space, and partly because the issues it raises are more managerial than systemic. Put another way, discussion of reforming outdated health sectors in transition economies (TEs) sounds very much like discussion of reforming outdated healthcare systems...

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