The Classical Soviet-Type Economy: Nature of the System and Implications for Reform

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Richard E. Ericson

Journal of Economic Perspectives, Fall 1991

Below I will outline the traditional Soviet economic system, developing its logic of institutions and interactions, and pointing out their natural economic consequences. This will lead me to a list of defining characteristics of that system, characteristi...

The USSR before the Fall: How Poor and Why

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Abram Bergson

Journal of Economic Perspectives, Fall 1991

This essay appraises the scholarly findings on the level of consumption and output in the USSR, compared with that in the West. Such aggregative calculations are onerous for any country, and not very surprisingly have encountered particular difficulty whe...

The Lessons of Limited Market-Oriented Reform

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Thomas A. Wolf

Journal of Economic Perspectives, Fall 1991

The waves of reform and restructuring now engulfing most of Eastern Europe did not begin from the same starting point in each country. While they all share a common economic legacy—the traditional Soviet-type centrally planned economy—some cou...

Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Peter Murrell

Journal of Economic Perspectives, Fall 1991

This paper addresses whether neoclassical economics can provide the intellectual underpinning for a theory of reform. I examine whether the neoclassical model satisfies an essential condition to qualify for this role: does it give us a satisfactory explan...

Legality and Market Reform in Soviet-Type Economies

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By John M. Litwack

Journal of Economic Perspectives, Fall 1991

The classical Soviet-type system operates in the virtual absence of economic legality, which is a prerequisite to a successful transition to a market economy in the Soviet Union and the nations of Eastern Europe. In the absence of economic legality, the l...

The Process of Socialist Economic Transformation

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Stanley Fischer and Alan Gelb

Journal of Economic Perspectives, Fall 1991

In this paper, we consider the reform process in those Central and East European countries that have made the decision to move from a more-or a less-planned socialist system to a private market economy, one in which private ownership predominates and most...

Financial Control in the Transition from Classical Socialism to a Market Economy

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Ronald I. McKinnon

Journal of Economic Perspectives, Fall 1991

The transition from socialism to capitalism poses severe problems of financial management that have yet to be resolved in principle, let alone in practice. One unfortunate consequence is continual financial turmoil as socialist economies of the Soviet Uni...

Microeconomic Issues in the Transition to a Market Economy

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Jan Svejnar

Journal of Economic Perspectives, Fall 1991

The socialist system introduced microeconomic distortions that probably transcend those observed in the third world. The recent developments in Poland, Yugoslavia, and the Soviet Union also support the hypothesis that macro stabilization will be difficult...

Credit Markets, Credibility, and Economic Transformation

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Guillermo A. Calvo and Jacob A. Frenkel

Journal of Economic Perspectives, Fall 1991

This paper focuses on the special role that capital markets play in the transformation of centrally planned economies into well-functioning market economies. We demonstrate that underdeveloped credit markets inhibit the effectiveness of price reform, mone...

Agriculture and the Transition to the Market

[Symposium: Economic Transition in the Soviet Union and Eastern Europe]

By Karen Brooks, J. Luis Guasch, Avishay Braverman, and Csaba Csaki

Journal of Economic Perspectives, Fall 1991

Agricultural sectors in Eastern and Central Europe are large, and a substantial number of people are directly affected by changes in producer prices, farm employment, and land ownership. Retail food markets are among the most distorted in the pre-transiti...

The Introduction of Markets in a Hypercentralized Economy: The Case of Romania

By Avner Ben-Ner and J. Michael Montias

Journal of Economic Perspectives, Fall 1991

This paper discusses communist Romania, the economy in the Ceausescu era, 1965-1989, the economy after the Revolution of December 22, 1989, and current problems and prospects for the Romanian economy.

The Economic Transition of Czechoslovakia from Plan to Market

By Josef C. Brada

Journal of Economic Perspectives, Fall 1991

The Communist government of Czechoslovakia was ousted in the so-called Velvet Revolution of November 1989, and the new regime adopted as its goal the transformation of the economy to one based on markets and private property, and also one more dynamic and...

On the First Year of German Monetary, Economic and Social Union

By Irwin L. Collier

Journal of Economic Perspectives, Fall 1991

This paper considers the first year of German monetary, economic, and social union, discussing the issue of the DM/east mark conversion rate; privatization and property rights; the supply and demand for reconstruction services; and a difference in concept...

Yugoslavia: The Case of Self-Managing Market Socialism

By Saul Estrin

Journal of Economic Perspectives, Fall 1991

For many years the Yugoslav economic system appeared to offer a middle way between capitalism and Soviet central planning. The Yugoslavs' brand of market socialism placed reliance on markets to guide both domestic and international production and exchange...

Hungary: In Transition to a Market Economy

By Paul G. Hare

Journal of Economic Perspectives, Fall 1991

Hungary began its transition to a market economy as long ago as 1968 with the adoption of the New Economic Mechanism, when detailed central planning was abandoned and the economy was regulated by means of financial and economic levers. However, after a pe...

The Rise and Decay of the Socialist Economy in Bulgaria

By Marvin Jackson

Journal of Economic Perspectives, Fall 1991

The political reconstruction of Bulgaria has gone on more slowly than in Central Europe, but the role of the former communists is weaker than in neighboring Romania or Serbia and, of course, much more so than in the Soviet Union (except for the Baltic Rep...

Poland under "Solidarity" Rule

By Stanislaw Wellisz

Journal of Economic Perspectives, Fall 1991

The coalition cabinet in which Solidarity played a leading role, but which also included Communists and their allies, won Parliamentary approval on September 12, 1989. This coalition inherited from the Communists an economy in deep crisis: inflation was r...

Policy Watch: U.S. Economic Policy toward the Soviet Union and Eastern Europe

By Susan M. Collins

Journal of Economic Perspectives, Fall 1991

As the Soviet Union and the countries in Eastern Europe take steps towards market economies and democratic political systems, the U.S. and other western countries have been confronted by a range of difficult and important questions about the appropriate e...

Retrospectives: Lange and von Mises, Large-Scale Enterprises, and the Economic Case for Socialism

By Joseph Persky

Journal of Economic Perspectives, Fall 1991

In the debates over "economic calculation" launched by Ludwig von Mises in 1920 and extending well into the 1940s, the central issue concerned the ability of a socialist economy to achieve allocative efficiency. Von Mises emphasized that a collectivist st...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Fall 1991