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It is often suggested that the earliest theorists of neo-liberalism first entered public controversy in the 1930s and 1940s to dispel the illusion that the welfare state represented a stable middle way between capitalism and socialism. This article argues that this is an anachronistic account of the origins of neoliberalism, since the earliest exponents of neo-liberal doctrine focused on socialist central planning rather than the welfare state as their chief adversary and even sought to accommodate certain elements of the welfare state agenda within their market liberalism. In their early work, neo-liberal theorists were suspicious of nineteenth-century liberalism and capitalism; emphasized the value commitments that they shared with progressive liberals and socialists; and endorsed significant state regulation and redistribution as essential to the maintenance of a free society. Neo-liberals of the 1930s and 1940s therefore believed that the legitimation of the market, and the individual liberty best secured by the market, had to be accomplished via an expansion of state capacity and a clear admission that earlier market liberals had been wrong to advocate laissez-faire. doi:10.1017/S0018246X09990392

A study examining the impact of globalization on economy of a country is presented. The study also investigates the exchange rate and monetary policy complications because of such globalization.

A debate is presented, which centers the existence of dynamic agglomeration and economic growth. It is also argued that the socioeconomic processes that explain economic growth operate primarily at the national/societal level and not at the city level.

The sustainability of national economies is measured using green net national product (GNNP) adjustments to aggregate income, investment or wealth data. The practical and philosophical rationale for testing sustainability in a present-value-maximizing development path is discussed.

DOCHERTY I., GULLIVER S. and DRAKE P. (2004) Exploring the potential benefits of city collaboration, Reg. Studies 38, 445-456. As they emerge from extended periods of economic restructuring, many large cities are searching for innovative, more effective ways to achieve and maintain competitive advantage in the international economy. Strategic collaboration, although in the early stages of development, might offer a means for nearby cities to enhance their competitiveness and improve their position in regional and global hierarchies. This paper sets out a range of potential answers to the question 'why collaborate?' by exploring the likely benefits to be gained from such collaboration, and suggests possible ways in which the collaborative process between cities could be established and sustained. City collaboration Global economy Competitiveness Urban hierarchy DOCHERTY I., GULLIVER S. et DRAKE P. (2004) Un examen des avantages potentiels de la collaboration interville, Reg. Studies 38, 445-456. A la suite des periodes de restructuration economique prolongees, beaucoup des grandes villes sont a la recherche de facons plus innovatrices et plus efficaces de reussir et de maintenir leur competitivite dans l'economie internationale. Bien qu'elle soit dans ses premieres phases, la collaboration strategique pourrait fournir un moyen par lequel les grandes villes augmentent leur competitivite et ameliorent leur place dans les hierarchies regionale et mondiale. Tout en examinant les avantages potentiels a decouler d'une telle collaboration, cet article cherche a presenter toute une serie de reponses potentielles a la question suivante: collaborer, pour quoi faire? En outre, l'article suggere des facons qui puissent assurer la mise en train et faire le suivi du processus de collaboration interville. Collaboration interville Economie mondiale Competitivite Hierarchie urbaine DOCHERTY I., GULLIVER S. und DRAKE P. (2004) Untersuchung der potentiellen Vorteile stadtischer Zusammenarbeit, Reg. Studies 38, 445-456. Gegen Abschluss ausgedehnter wirtschaftlicher Umstrukturierung suchen viele Grossstadte nach innovativen wirksamen Wegen, Wettbewerbsvorteile in der internationalen Wirtschaft zu erzielen und zu behaupten. Strategische Zusammenarbeit konnte sich fur benachbarte Stadte selbst im Anfangsstadium der Entwicklung als Mittel zurVerbesserung ihrer Wettbewerbsfahigkeit erweisen, und ihrer Stellung in regionalen und globalen Rangordnungen verbessern. Dieser Aufsatz fuhrt eine Reihe potentieller Antworten auf die Frage 'Warum Zusammenarbeit?' auf, indem er die zu erwartenden Vorteile untersucht, die sich aus derartiger Zusammenarbeit ergeben, und schlagt mogliche Wege zur Aufnahme und Aufrechterhaltung von Zusammenarbeit vor. Zusammenarbeit von Stadten Globale Wirtschaft Wettbewerbsfahigkeit Stadtische Rangordnung DOCHERTY I., GULLIVER S. y DRAKE P. (2004) Un examen de los posibles beneficios que se derivan de la colaboracion entre ciudades, Reg. Studies 38, 445-456. A medida que emergen de prolongados periodos de reestructuracion economica, muchas de las grandes ciudades andan en la busqueda de formas mas efectivas e innovadoras de conseguir y manterner una ventaja competitiva en la economia internacional. Una colaboracion estrategica, aunque sea en los estados iniciales de desarrollo, puede ofrecer a las ciudades cercanas entre si una forma de aumentar su competitividad y mejorar su posicion en jerarquias regionales y globales. Este articulo presenta una variedad de posibles respuestas a la pregunta '?Para que colaborar?' explorando los posibles beneficios que se pueden obtener de tal colaboracion, y sugiere posibles formas mediante las cuales el proceso de colaboracion entre ciudades se podria establecer y sostener. Colaboracion entre ciudades Economia global Competitividad Jerarquia urbana JEL classifications: O21, R12, R58

Mikhail Zadornov, vice-chairman of the Russian State Duma's committee on the budget and taxes, believes that in order to break the Russian economy's dependence on oil prices, the country needs to undertake major reforms of its bureaucracy, banking, natural monopolies, judicial and tax systems, but that this reform is being stymied by the approaching elections. Businesses in Russia argue that the main bar to investment in the country is the unfavourable tax climate, but that the government lacks consensus on what ways to reform the tax system. Aleksei Kudrin, the Deputy Prime Minister and Finance Minister, agrees that reform is required in order to make investment in Russia less risky.

This article discusses the debate among authorities and academics about the cause of the Russian financial crisis that culminated in August of 1998. The authors attempt to determine if debt, currency, budget, investment or banking crises was the 'basic' crisis; what the most important cause may have been; whether the debt and monetary policy in the spring of 1998 lead to the devaluation of the ruble; why hyperinflation, followed by a drop in the ruble exchange rate and a crash of the economy did not occur as predicted; and reasons for the turn in production and economic growth, which was not predicted.

Established in 1948, Israel can be considered a new developing state in transition; on the other hand, it can be viewed as a modern western society and the only strong democracy in a rather unstable region. While the former implies lack of public administration tradition and the need to invest in basic infrastructures, the latter requires, among other responsibilities, the adoption of norms of systematic policy planning and accountability. In Israel, security problems, limited (and loss of) resources, lack of stability and huge waves of immigration have displaced more mundane issues such as administrative reforms and systematic policy planning approaches. From its inception, there was constant criticism of the state's lack of established norms, functions, and skilled practitioners, particularly in policy analysis and evaluation. At first the criticism came from academia (especially Dror 1968, 1971), but in time it crossed lines and was raised by parties and Members of Parliament (the Knesset), and constituted a major issue in the work of different committees concerned with reforms in the public service and in government reorganization. This paper (1) will discuss the main reasons for the shortcomings of Israeli public policy analysis, evaluation and planning, and (2) will present shifts in conceptualization during recent years, with regard to systematic policy making.

This paper is a multi-location, single-period, single-product inventory problem with an opportunity for centralisation. The decentralised model in which a separate inventory is kept at every location is compared to the centralised system in which the demands are satisfied from one central warehouse. The two systems are then compared when excess demands are penalised and lost, and in the more general case where a portion or all of the excess demand at a location may be reallocated among other locations with the remaining inventory. The revenue, salvage, cost, and penalty functions at each location are assumed to be identical. Expected profits are evaluated and conditions under which the centralised model outperforms the decentralised one are derived.

How has global economic integration affected the ability of national governments to sustain social democratic regimes in order to ensure economic security and some measure of equality? This question is [...]

Marxists and Leninists have adopted varying positions regarding the centralization of economic and political institutions. Marxists such as Karl Kautsky and Otto Bauer advanced the view that ownership should be taken away from the state and distributed among trade unions, cooperatives and local governments. On the other hand, Leninists proposed the creation of centralized governments that would handle political and economic planning decisions.

The advantage to efficiencies of the decentralization of decisions and of individual responsibility is even greater, perhaps, than the nineteenth century supposed; and the reaction against the appeal to self [...]

This article began as a contrast between the politics and processes of budgeting and revenue mobilization in Latvia under Soviet rule and as an independent country. The dynamics of events in Latvia and opportunities presented during our research broadened its scope. The article became a broad review of the economic and political processes in Latvia since independence, with an emphasis on the effects of attitudes inherited from fifty years of Soviet rule, traditional Latvian values, and emerging public policies. The interdependence between government and business infrastructure is dramatically shown in the bank scandal of 1995. The bank failures caused near catastrophic reductions in tax revenues.

Policy-makers should utilize relevant information from models simulating economy's behavior in unpredictable situations, while designing monetary and fiscal policies. The Newtonian paradigm of economic policy-making must consider the priorities of the policy-makers, agents, and citizens. Such an approach will enable tackling technical complexity in policy-making process. The process has to look at tax, expenditure, borrowing, the exchange rate, the balance of payments, growth, and the money supply. The Treasury's modeling team should act as an independent Central Economic Modelling Agency.

The transition of China's economic structure from a planned economy to a market economy provides valuable lessons for other transition economies. The theory of induced institutional innovation explains the reasons behind the success of Chinese reforms despite the absence of a master plan. Moreover, China's transition did not disturb the production of medium to large-scale companies as compared to the 'big bang' approach of Eastern European countries.

Highlighting an important facet of diversity among organizations operating in different institutional environments, this article presents a model of the growth strategy of the firm in planned economies in transition such as Eastern Europe, the former Soviet republics, and China. Focusing on the stylized state-owned enterprises, we explore the interaction between institutions and organizations in these countries. Given the institutional constraints, neither generic expansion nor acquisitions, two traditional strategies for growth found in the West, are viable for firms in these countries. Instead, firms settle on a network-based strategy of growth, building on personal trust and informal agreements among managers. The institutional environment that leads to this unique strategy of growth is examined, and the boundary conditions, limitations, and implications of this model are discussed. (Reprinted by permission of the publisher.)

Rolling planning entails the continual revision of dynamic programs where the finite horizon N found ahead at the time of each revision remains constant. The rolling plan is perceived as a realization of an evolutionary mechanism of intertemporal decentralization since the decisions made about resource allocation are carried out without verification by future agents. The possibility of designing an evolutionary mechanism is established for a multi-sector Ramsey model.

Russian management is going through a difficult transition period as the economy shifts from central planning to free market principles. The tasks and responsibilities of Russian managers during these times of change are examined, with particular focus on their relationships with shareholders and government supervisory agencies. The government is trying to facilitate the transition from command to a market economy by introducing new methods and instruments of industrial policy. However, the newly created private sector still considers these government measures to be insufficient. Although they are growing more independent of the government, Russia's newly privatized companies continue to expect some support from government bodies to meet the enormous social commitments to employees that they have inherited from the communist regime. In the absence of government control, industrial companies are becoming increasingly dependent on their shareholders.

The collapse of communism was partly due to the improper structure of economic planning. A rational allocation of resources, according to economic criteria, was not the basis of communist economic planning, as the interests of individual enterprises played an important role in fund allocation. Slowly, the power shifted from the top bureaucracy to the lower levels and the system eventually collapsed.

The fortunes of states pursuing a program of economic reform have been varied. While the economies of the former communist countries of Eastern Europe have shrunk in size, the growth [...]

Obituaries for socialism in the wake of the Soviet Union's collapse are premature and do not consider mechanisms that could make it more viable. Even such capitalist systems as the US's use a variety of non-market mechanisms to function better. Market socialism can apply many of those techniques, or variations of them, to produce an even better economic system than capitalism. Most notably it could improve and greatly expand income redistribution and give the public more ownership of corporations.

The restrictions imposed on a new explanation of the causes of storming behavior based on the game-theoretic modelling can be rejected if the common knowledge assumption is properly applied. The restrictions were imposed to avoid the existence of multiple Nash equilibria in the game. Storming pertains to the production of a substantial amount of the monthly output target in the last few days of the month.

This paper investigates the issue of monetary overhang in centrally planned economies (CPEs). The analysis compares the money stocks in CPEs with those in market economy counterparts. Contrary to conventional belief, the findings here suggest that the money stocks in traditional CPEs do not tend to be excessive. This implies that CPEs suffer more from structural distortion than from monetary overhang in their traditional stage., I. INTRODUCTION The problem of monetary overhang has serious implications for the former centrally planned economies (CPEs) in their transition to market equilibrium. Many analysts believe that monetary overhang is [...]

A study estimating the growth of agricultural production efficiency between 1965 to 1989 for nine centrally planned economies was conducted. The nine economies were that of Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, Romania, Yugoslavia, the Soviet Union and China. Research indicates that production efficiency improved from 1978 to 1989. Slowdown of growth during the 1980s was due to the slower growth of inputs.

The possibility of long wave economic cycles are considered under both market capitalism and command socialism. Capitalist long waves can be generated by a two-stage multiplier-accelerator model and socialist long waves can be generated by an equivalent model strictly for investment cycles. Under certain conditions chaotic dynamics can occur at turning points in both cases. It is argued that a systemic crisis leading to a systemic transformation is most likely to occur at such a point.

A report on the transition of Romania from a centralized economy to a consumer-oriented economy reveals a stark contrast between the period before and after the fall of communism. During the communist era, there were shortages in basic staples caused by the rationing of food, energy and materials and by an economic crisis. Currently, Romanian stores stock a variety of products, but many citizens cannot afford them. Predictions for Romania's economy as well as recommendations for companies selling goods in the country are provided.

Gene Hsin Chang made a major contribution on disequilibrium markets by stating that supply is rarely limited by demand in centrally planned economies. Oversupply would be more of a result mismanaged inventory rather than idle capacity. However, Burkett doubts Chang's analysis because it tends to oversimplify disequilibrium modeling.

The production results of a Soviet centrally planned economy are evaluated and analyzed. Comparisons of plan fulfillment between heavy industries and consumer goods industries reveal that planning priorities are not reflected in its fulfillment. Soviet planning priorities were formerly assumed to be expressed in the observable fulfillment for a certain period. This may be true only for fuels, electric power, and non-food consumer goods.

China's enterprise system has undergone reform hinging on property rights relating to profit distribution between employees, government, and the businesses themselves, in addition to the problem of corruption by agents such as bureaucrats. Reform meant that it was possible to aim for higher profit retention though without increasing work done. Problems in the system tended to be linked to distribution rather than production, though production was affected. The system itself and the context, including capital and labour markets, both contributed to the problems. The contract management system appears to offer more security than the shareholding system, but the main unresolved issue is how to control corruption while providing incentives for enterprises.

The increasing centralization of national economies has created crisis conditions for growing numbers of local economies. Efforts to deal with the problem have so far been largely unsuccessful. Now, unless the internationalization of economic activity is guided by the principles of democracy and economic efficiency, it will lead to even more centralization. In the EC, for example, this will worsen the difficulties of 'crisis regions.' A key cause of the problem is the assumption that macroeconomic control can be exercised at a single level only. The solution depends on developing a multilevel system of macroeconomic management,at subnational and supranational levels as well as the national level. A twin-track approach, localizing and internationalizing, is needed to make localeconomic well-being a goal of economic policy, and to help create a more environmentally sustainable world economy. (Reprinted by permission of the publisher.)

The emergence of a new problematique - transitional economies - that cannot be handled within traditional paradigms and models is linked to the difficult transformation of Eastern Europe and the former Soviet Union to a Western-style market economy. The case of the former East Germany stands out, for here the transformation is occurring at unprecedented speed and in the most condensed form. Several phases of such transformation can be envisaged: introduction of basic principles of the market economy, building of infrastructural, financial, administrative and legal preconditions for the efficient running of scale economies, and bringing about the shift to socially oriented and ecologically sustainable economic performance. The transformation needs help from the West. Coordinated and strategically directed assistance to self-help is required that may take the form of recovery programme for Eastern Europe and the former Soviet Union (a new version of the Marshall Plan). (Reprinted by permission of the publisher.)

It is first shown that Oskar Lange's claim to have invalidated Mises's contention of the impossibility of rational decision making in a socialist economy is neither logically nor essentiall convincing. Furthermore it is argued that the Mises objection is also valid in case of Vanek's labor-managed economy and its variants. Logical mistakes aside, a basic problem is that one cannot discriminate between private and public ownership by use of models in which ownership is irrelevant as in case of the Walrasian system or the neoclassical theory of the firm: Institutional economic approaches are to be applied; they are able to clarify undogmatically the economic function of ownership. In spite of a long debate, we do not have a convincing theoretical proof that market socialism can work -- apart from the negative experiences with real existing socialism.

The paper gives an assessment of the theoretical foundations of development planning laid in the 1950s and 1960s, and the conceptual shifts since the turbulent 1970s questioning previous patterns of macroeconomic regulation. The call today is for management styles suited to cope with evolutionary processes. Their crucial elements in the face of overall change are sensitive early diagnosis, flexible adjustment, continuous individual and social learning, the building of technological potential, and self-organization. There is an emerging search for an evolutionary ethics accepting responsibility for the further continuation of life on the planet in view of ecological constraints and recognizing basic principles of evolution such as openness, non-equilibrium, and the positive role of fluctuations in reaching higher levels of complexity and order. Value systems have an ever more explicit impact on the direction of social change.

Spagat, Michael -- Contract Enforcement in Sellers' Markets I present an infinitely repeated game model where a monopolist seller has a contractual obligation with several buyers in each period. If a contract is violated the buyer can collect some compensation and impose a penalty on the seller. There are an infinite number of subgame perfect equilibria in this model, but I employ the concept of e-validated equilibrium to pick out a unique equilibrium outcome for the game where the seller is able to dominate the buyers. This model is clearly applicable to supply problems of Soviet-type economies, but it can explain certain phenomena of Western economies as well. J. Comp. Econom., December 1991, 15(4), pp. 681-697. Brown University, Providence, Rhode Island 02912.