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Microeconomic Issues in the Transition to a Market Economy

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  • Jan Svejnar

Abstract

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 to achieve in the transforming socialist economies in the absence of adequate micro adjustments. In this paper, I address what I consider to be the most important micro issues related to the transition from socialist to market economies. First I summarize the initial microeconomic conditions, covering labor, capital, and energy markets; the product markets, industrial organization, and trade; and the market for land and housing. Then, I describe the main changes that have taken place in the early stages of the transition. Finally, I discuss the micro policy agenda that needs to be addressed if the transition is to be successful

Suggested Citation

  • Jan Svejnar, 1991. "Microeconomic Issues in the Transition to a Market Economy," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 123-138, Fall.
    • Handle: RePEc:aea:jecper:v:5:y:1991:i:4:p:123-38
    Note: DOI: 10.1257/jep.5.4.123
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.5.4.123
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    References listed on IDEAS

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    1. Granick,David, 1987. "Job Rights in the Soviet Union," Cambridge Books, Cambridge University Press, number 9780521332958.
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    Cited by:

    1. Debra Moore Patterson, 1996. "Reform in Eastern Europe: A General Equilibrium Model with Distortions in Relative Prices and Factor Markets," Canadian Journal of Economics, Canadian Economics Association, vol. 29(2), pages 457-472, May.
    2. John Bonin & Mark E. Schaffer, 1999. "Revisiting Hungary's Bankruptcy Episode," CERT Discussion Papers 9906, Centre for Economic Reform and Transformation, Heriot Watt University.
    3. Li, Yang & Tang, Yujie, 2021. "A dynamic capabilities perspective on pro-market reforms and university technology transfer in a transition economy," Technovation, Elsevier, vol. 103(C).
    4. Fardmanesh, Mohsen & Tan, Li, 2003. "Wage and price control policies in transition economies," Journal of Development Economics, Elsevier, vol. 70(1), pages 173-200, February.
    5. AfDB AfDB, 1997. "Working Paper 35 - Privatization of Public Enterprises in Zambia: An Evaluation of the Policies, Procedures and Experiences," Working Paper Series 2173, African Development Bank.
    6. Choy, James P., 2020. "Kompromat: A theory of blackmail as a system of governance," Journal of Development Economics, Elsevier, vol. 147(C).
    7. Debra Patterson, 1999. "An open-economy transition model," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 5(1), pages 24-36, February.
    8. Anderson, John E., 2001. "Emerging Housing Markets in Moldova," Journal of Housing Economics, Elsevier, vol. 10(3), pages 419-428, September.
    9. Barbara Roberts & Steve Thompson, 2003. "Entry and Exit in a Transition Economy: The Case of Poland," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 22(3), pages 225-243, May.
    10. John Marangos, 2005. "A Political Economy Approach to the Neoclassical Gradualist Model of Transition," Journal of Economic Surveys, Wiley Blackwell, vol. 19(2), pages 263-293, April.
    11. Fardmanesh, Mohsen & Tan, Li, 1996. "Wage and Price Control Policies in Socialist Transitional Economies," Center Discussion Papers 28515, Yale University, Economic Growth Center.
    12. Elitsa R. Banalieva & Kimberly A. Eddleston & Thomas M. Zellweger, 2015. "When do family firms have an advantage in transitioning economies? Toward a dynamic institution-based view," Strategic Management Journal, Wiley Blackwell, vol. 36(9), pages 1358-1377, September.
    13. Christoph Bühler & Dirk Konietzka, 2008. "The transition from school to work in Russia during and after socialism: change or continuity?," MPIDR Working Papers WP-2008-018, Max Planck Institute for Demographic Research, Rostock, Germany.
    14. AfDB AfDB, 1997. "Working Paper 35 - Privatization of Public Enterprises in Zambia: An Evaluation of the Policies, Procedures and Experiences," Working Paper Series 2253, African Development Bank.
    15. Johnston, Richard S. & Zhang, Zhengkun, 1998. "A Contribution to the Theory of Price Regulations and Commodity Bundling with an Application to the Case of China," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 142-149, March.
    16. Andrew Mwaba & Caleb Fundaga, 1997. "Working Paper 35 - Privatization of Public Enterprises in Zambia: An Evaluation of the Policies, Procedures and Experiences," Working Paper Series 169, African Development Bank.
    17. Robert S. Chase, 1997. "Markets for Communist Human Capital: Returns to Education and Experience in the Czech Republic and Slovakia," Working Papers 770, Economic Growth Center, Yale University.
    18. Wang, Qingbin, 1994. "Modeling China's household food demand in the transition toward a market economy," ISU General Staff Papers 1994010108000011518, Iowa State University, Department of Economics.
    19. Richard Henry & Karl Voltaire, 1995. "Food marketing in transition in eastern and central Europe," Agribusiness, John Wiley & Sons, Ltd., vol. 11(3), pages 273-280.
    20. Brzezicka, Justyna & Wisniewski, Radoslaw & Figurska, Marta, 2018. "Disequilibrium in the real estate market: Evidence from Poland," Land Use Policy, Elsevier, vol. 78(C), pages 515-531.
    21. Kan, Viktoriya & カン, ビクトリヤ, 2010. "Regional Determinants of New Firm Formation in a Transition Economy: The Case of Uzbekistan," PIE/CIS Discussion Paper 490, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.

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    More about this item

    JEL classification:

    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform

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