Ten lessons from 30 years of post-communist economic transformation

In the early years of post-communist economic transition, the dominant idea was to implement an early, comprehensive and radical market economic reform programme. Such a programme could be successfully introduced, but only if accompanied by skilful political economy of reform. In other words, it required a clear understanding of the fact that the old system was finished, and that there was a need for a political breakthrough and the appointment of new political leaders as well as new economic policymakers. Furthermore, it required the swift elaboration of a reform programme, a functioning parliament, sufficient international financial support, fast implementation, public understanding and uncompromising action. Critics warned against the risk of too sharp output fall (which did not come to pass), lagging institutional development and a lack of social reforms. In hindsight, however, the biggest problem was the absence of real property rights in the post-Soviet countries. There, the judicial systems have been under the control of the ruling elites; moreover, kleptocratic elites have jeopardized democracy in these countries.