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The main thesis of the article is that the Eurozone (EMU) crisis is not the main problem of Europe, or the West, but the long-term decline in economic growth. Institutional and policy distortions of the EMU only accelerated the day of reckoning, when the inevitable cuts to the oversized public (mostly welfare) expenditures will have to made. They will be even more necessary given demographic changes. The process of adjustment has encountered a lot of political and social resistance that is going to increase further in the years to come. These difficulties stem largely from the psychological consequences of the prolonged lack of linkages between efforts and results in the welfare state as perceived by its beneficiaries. The resulting learned helplessness syndrome makes it very difficult to proceed with the necessary downward adjustment - an absolute "must" if the West is going to reaccelerate economic growth and come out of the present quagmire relatively unscathed. The economic future of the West thus raises many question marks. [ABSTRACT FROM AUTHOR]

This article looks at the prospects of two emerging economic powers, Russia and China, to become major players in the world economy. The main economic thesis formulated by the author is that economies not only grow, but also undergo structural change. And to successfully accomplish second structural change – from the industry-driven to human capital-intensive services driven economy – it is not enough to increase economic freedom. Civic and even political freedom must emerge or increase to stand a chance to pass the ‘Great Wall’. Russia and China are, then, analyzed from the foregoing perspective. Additionally, many structural and economic policy distortions are pointed at in the case of both countries. Moreover, in the case of Russia, it is stressed that it is not so much an emerging power, but the failed superpower of the past. [ABSTRACT FROM PUBLISHER]

This article deals with a specific legacy, concerning the labour force, with which transition countries have been burdened while instituting systemic change. The majority of authors have concentrated on what this author calls transition cyclical unemployment, resulting from the permanent excess demand and the lack of penalty for financial failure under the communist economic system. However, another, more pernicious legacy has been the distorted skill structure in communist economies. This article explains the sources of a bias in favour of low-skilled workers in the past. In consequence, when transition began, these economies were faced with heavy excess supply of low-skilled and high demand for better skilled workers. The latter stemmed from normal requirements of economic development, that is, the need for continuous output quality improvement, technological upgrading and change in the portfolio of goods and services produced. Among the consequences of the sharp downward change in demand for low-skilled labour have been growing wage differentials and the emergence of a large pool of unemployed (and often unemployable) low-skilled labour, which may be called transition structural unemployment. In macroeconomic terms an unusually high unemployment rate was observed for about a decade following the beginning of transition. [ABSTRACT FROM AUTHOR]

The article looks from an institutional perspective at the process of catching up by poorer countries with the level of development already achieved by the richer ones. The author stresses that resources are of secondary importance, relative to the institutional framework conducive to or discouraging economic development. It is from such a perspective that the present writer approaches post-communist transition, noting the existence of leaders and laggards in the process. Differences in outcomes are ascribed, unsurprisingly, to differences in institution-building (both general and specific rules) and, even more importantly, to differences in what the author calls "civilisational fundamentals" of liberty, law and order, and trust. The main thesis is that the fundamentals in question are the heritage of pre-communist past. Therefore, it is the pre-communist heritage, the presence or absence of the fundamentals in question, which largely determine the transition's success or failure. [ABSTRACT FROM AUTHOR]

The central theme of this article is the role of the new, entrepreneurial private sector, established following the fall of communism, in output recovery, and, more generally, in economic expansion of post-communist economies. This role is considered specifically in the context of the successes in Poland, the Czech Republic, and Hungary. The author notes a substantial difference between the performance of the new private sector and the privatized sector in the short to medium run (three to seven years) since the start of privatization. New private firms typically enter the economic game with well-established de jure and de facto property rights and with industrial relations based on market economy rules. Unlike the public sector or privatized firms, the labor force of these firms is not demoralized by the change to market economy rules. As a result, they often perform better and are quick to increase their share of aggregate output. This also helps the economy as a whole to emerge more rapidly from transitional recession. The author discusses two hypothetical paths of recovery and expansion: one with and one without a dynamic new private sector. Determinants for the establishment and growth of new private firms are considered. In addition to the specific rules and general framework of transition, the study concludes that broad institutional fundamentals of political liberty, law and order, and trust contribute to the successful emergence of this new entrepreneurial sector. [ABSTRACT FROM AUTHOR]

The early (drastic) output fall has been the major bone of contention among theorists in the early years of transition. This author looks at the issue from the vantage point of the communist economic legacy, i.e. so-called 'pure socialist production', unneeded under a less wasteful economic system. Excessive inputs, excessive investments, excessive armaments, as well as some other excesses disappeared in the early phase of a shift to the market (and democracy). Likewise disappeared trade with the former 'fraternal' countries, which also began restoring economic sanity and did not need 'pure socialist production' anymore. The article reviews the most often found explanations of the output fall in early transition and finds them much less satisfactory than the elimination of the 'pure socialist production' of the past. [ABSTRACT FROM AUTHOR]

Focuses on the development of the Polish private sector. Implications of the privatization of the economy; Factors contributing to the Polish economic shift; Description of the industrial sector.

Investigates the relationship between the privatized sector and generic private sector in post-communist privatization. Interaction between the evolving framework and the expansion of the generic private sector; Importance of the emerging general trust as a standard transition program; Circumstances leading to the emergence of the institutional framework.

This article deals with the foreign trade of East-Central European countries in post-communist transition. It is primarily concerned with explaining certain early transition developments, unexpected and often neglected by policy makers and experts alike. The contribution of foreign trade to the generally unexpected steep output fall registered by each of these countries is discussed, stressing the inevitability of the disappearance of distorted demand patterns with the fall of communism and explaining why distorted demand was bound to affect not only the level of domestic output but also imports associated with the distorted demand. Exports to other former CMEA countries therefore fell precipitously. Other issues analysed in the article concern causes and beneficial effects of the rapid Westward reorientation of foreign trade, as well as the disappearance of another legacy of the communist past, East-Central European Countries', that is dual export structure. [ABSTRACT FROM AUTHOR]

Illustrates briefly an answer to the question of why economic reforms fail under the Soviet-type system in spite of the interest of improving the performance of their ailing economies. Incentives for the ruling stratum to maintain the status quo in the state sector; Incentives for the ruling stratum to liquidate or keep small the private sector; Conclusions.

Evaluates the economic transition program of Poland. Emergence of the `Balcerowitcz Plan'; Effect of property rights' structure on monetary policy in Poland; Fixed exchange rate of the stabilisation program; Sources and effect of the fiscal crisis and decreasing budget.

Analyzes the output loss in the economy of Union of Soviet Socialist Republics. Sources of the fall of output; Implications of output loss for welfare; Policy implications on output loss.

Presents the results of a survey of East-Central European countries regarding their post-communist economic conditions. Forces shaping economic activity; Pattern of change in output; Macroeconomic policies; Foreign trade.

Focuses on the efficacy of Japan's imports and exports of technology policy. Distinctive features of the technology import policy; Dynamics and structure of technology imports; Role of technological imports in economic development; Prospects for technology imports; Export of technology to developing countries.

Although the extraordinary popularity of privatization in Eastern Europe evokes familiar images in the Western economies, in a number of respects the process in our region will be less similar to the "classic" Western model than to the experience of some underdeveloped countries. East European privatization proposals represent a broad variety, and we should separate from this the plans put forth by members of the more or less dethroned power elite in an effort to retain some of their privileges. A rapid implementation of privatization would, in fact, also serve to prevent this eventuality. However, in the absence of solvent demand, state enterprises cannot be sold quickly. The author describes two proposals based on the distribution of shares gratis and outlines what he sees as the optimal schedule for privatization. Although the extraordinary popularity of privatization in Eastern Europe evokes familiar images in the Western economies, in a number of respects the process in our region will be less similar to the "classic" Western model than to the experience of some underdeveloped countries. East European privatization proposals represent a broad variety, and we should separate from this the plans put forth by members of the more or less dethroned power elite in an effort to retain some of their privileges. A rapid implementation of privatization would, in fact, also serve to prevent this eventuality. However, in the absence of solvent demand, state enterprises cannot be sold quickly. The author describes two proposals based on the distribution of shares gratis and outlines what he sees as the optimal schedule for privatization. [ABSTRACT FROM AUTHOR]

The issue of export orientation has long been debated among scholars and decision makers in smaller, foreign-trade-dependent. East European centrally planned economies (CPEs). Beginning with the late 1960s many programs were formulated and later put into operation that aimed at achieving such an orientation with, however, scant effects in each case, In the last few years, a sharply deteriorating balance of payments position has given the issue new urgency, but the aim seems to be as elusive as evcr. Discussions, as well as practical measures, have generally been limited to certain sectoral domestic economic policies, or to linkages between them and foreign economic policies affecting the process of attaining this goal. Only rarely was a more fundamental question asked, namely whether models of central planning make it possible to achieve export orientation, given our knowledge of economic theory in general and of trade theories in particular. An answer to the above theoretical question has important policy implications. If it is negative, i.e., if certain fundamental features of central planning make it all but impossible to attain export orientation, then there ought to be a shift from repeated attempts to improve the functioning of central planning, or from sectoral changes, in this case changes in the foreign trade sector, or policy changes, to changes of the fundamental features of the model itself that keep East European economies from achieving this aim. For with.out the changes, policies aimed at achieving export orientation, no matter how well intentioned and formulated, are doomed to failure. Theoretical remarks in this article are intended to provide some preliminary answers to the question posed in the previous paragraph. [ABSTRACT FROM AUTHOR]

Examines inflation in the European countries with planned economy. Transformation of the inflationary gap into inflation; Sources of inflation int he planned economy; Rates of growth of prices.

Presents a study that describes the type of institutions inherited from Soviet-style economies to show that certain types of laws and institutions shape economic behavior in market economies. Limitations of institutional reforms and macroeconomic policies; Interdependence and lack of complementary market institutions; Reformation of existing but distorted institutions.

Deals with the characteristics of Soviet-type economies, particularly on the similarity of their intra-industry structures regardless of the varying sizes of these economies. Twofold underspecialization and its hypothesized effects; Assessment of the Soviet-type industrialization pattern.

Outlines the problems of privatization in Eastern Europe. Comparison of privatization in former communist and Western countries; Denationalization in socialist countries; Scope and framework of privatization.

Discusses key issues relevant to the transition of socialist economies to the free market. Impact of economic liberalization on the political system of socialist countries; Difficulties of moving autocratic countries towards the market system; Policy implications on economic affairs. INSETS: SUBORDINATING THE ECONOMY TO POLITICS;THE ANTI-DRUNKENNESS CAMPAIGN AND PROPERTY RIGHTS;POLITICS AND RENT-SEEKING IN THE ECONOMY.

Argues that the over-large manufacturing sectors of East European economies are caused by defects in the frameworks within which industries operate. Concentration on restructuring within industry; Losses resulting from industries' efforts to catch up with industrialized companies in the West; Factors forcing certain Eastern European countries away from a normal pattern of development.

Argues that economic reform in Eastern Europe can be achieved only by leaders untainted by former communist regimes. Decline of moral standards under communism; Deficiency in entrepreneurship; Treatment of the private sector in socialist countries; Statement that changes in human behavior occur much more slowly than changes in the economic system.

Comments on the egalitarian preferences displayed by blue-collar workers in Eastern Europe. Reasons why blue-collars feel threatened by rewards for efficiency following economic liberalization; Threat posed by workers' egalitarianism on economic development in Eastern Europe; Policy implications on economic affairs in the region.

Focuses on the liberalization of socialist economies in East Europe. Market reforms; Soft budget constraint on enterprises; Role of vertical relationships between superiors and subordinates in bond market.

Determines whether buying out the privileges of the ruling party Apparatchiks can overcome resistance to reform in Eastern Europe. Notion of the property rights theory; Issues concerning compensation contracts; Degree of control of a ruling class in a socialist system.

Analyzes the impact of the expansion of private enterprises in Eastern Europe. Problems facing private sector in socialist economies; Consequences of the high risk associated with private entrepreneurship; Characteristics of private business.

Analyzes the prospects for perestroika as of 1990. Arguments on the untenability of Soviet economic reform; Consistency of Soviet economic policy; Aspects of the economy under perestroika.