Table of Contents

Forward
Acknowledgements
Introduction

1. Transition from socialism: where to?

1.1 What triggered the transition?
1.2 The conditions for market reform under socialism
1.3 'Socialist Friedmanism' or 'Galbraith's socialism'?
1.4 The last experiment: the Polish reforms of the 1980s
1.5 The politics of 'the worse, the better'
1.6 From market socialism to capitalist restoration
1.7 Transition targets: visions and illusions

2. Different points of departure

2.1 Geopolitics: initial position and final outcome
2.2 Economic systems and structures
2.3 Financial destabilization and the shortageflation syndrome
2.4 Growth cycles and stagnation in the socialist economy

3. Systemic change and economic performance

3.1 Economic reforms and growth: China and Vietnam
3.2 Transition and contraction: Eastern Europe and the former Soviet republics
3.3 The drawbacks and merits of the postsocialist legacy

4. Transitional recession: expectations, reality, interpretations

4.1 Liberalization, stabilization, and the great slump of the 1990s
4.2 Policy mistakes
4.3 The failure of 'shock therapy' and 'creative destruction'
4.4 The systemic vacuum: neither plan, nor market
4.5 The revolution in property rights and the decline in production

5. The Washington consensus revisited

5.1 Policy without growth: missing elements
5.2 Toward a new consensus
5.3 The means and the ends of economic policy

6. Transition policy and development strategy

6.1 Transition as a process of the redesign of systems
6.2 Transition as an instrument of development strategy
6.3 Institution-building: from shock failure to gradual therapy

7. Transition from plan to market: concept and implementation

7.1 Privatization, the new private sector, and corporate governance
7.2 Interest groups and the formation of a growth lobby
7.3 Informal institutions: corruption and organized crime

8. Financial reform and policy

8.1 The new fiscal system
8.2 Social security reform, savings, and growth
8.3 Exchange rate regimes
8.4 Financial sector development

9. The redistribution of the costs and benefits of transition

9.1 Privatization: the struggle over the distribution of wealth
9.2 Equity and equality: expectations and outcomes
9.3 The mechanisms of distribution
9.4 Equity issues in policymaking
9.5 The 'nouveaux riches' versus the 'nouveaux pauvres'
9.6 Income distribution and growth

10. Marketization and democratization

10.1 The compatibility of the market and democracy
10.2 The feedback loop
10.3 The dilemma of the 'postcommunist constituency'

11. From recovery to sustained growth

11.1 Market imperfections and crisis
11.2 Recovery and the new role of the state
11.3 The size of government, equity, and growth

12. The internationalization of postsocialist economies

12.1 Transition and globalization: the issue of coordination
12.2 The role of international organizations
12.3 The special mission of the IMF and the World Bank
12.4 Integration in the world economy
12.5 The two faces of emerging markets
12.6 Economic aid, direct investment, and foreign capital
12.7 Openness, capital flows, and four policy dilemmas

13. The long-term perspectives

13.1 Alternative paths: stagnation, growth, sustainable development
13.2 Rosy forecasts, black scenarios, and wise policies
13.3 Detours and dead-ends
13.4 Is there a happy ending?

14. Doubts and conclusions

Appendix: Policy conclusions and the post-Washington consensus
Statistical appendix
Part one: Selected economic indicators, 1990-8
Part two: The forecast for 1999-2002
References
Index