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Industrial Restructuring in Ukraine: from Socialism to a Planned Economy?

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  • Christian von Hirschhausen

Abstract

Six years into post-socialist economic reform, a division has appeared between the Central and Eastern European reform countries (CEE) and the CIS-countries. Whereas the former are dedicated to introducing the institutions of a capitalist market economy, the European CIS-countries (Russia, Ukraine, Belarus, Kazakstan) still hang on to some type of state-planning and a high degree of political interference in economic life. We show this development in a country that is new to European economics and policy: Ukraine. Just like its fellow CIS-countries, Ukraine has quickly succeeded macroeconomic stability, but insufficient structural reform may prevent a sustained economic development process. Our thesis is that Ukraine is at present embarking on a path from non-monetary socialism to a monetary planned-economy. An incredible amount of planning activity is observed in almost all spheres of economic life. We provide proof of that through empirical case studies, carried out personally in about 50 industrial enterprises all over the country. We conclude that the "window of opportunity", during which substantial reforms can be pushed through based on a large social consensus, is over. Remaining reforms will be piecemeal only, and hence, can have only piecemeal results. The post-Soviet patterns of economic reforms that are emerging in the CIS-countries have a direct impact on the European and world integration of these countries.

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  • Christian von Hirschhausen, 1996. "Industrial Restructuring in Ukraine: from Socialism to a Planned Economy?," Discussion Papers of DIW Berlin 144, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp144
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    1. Roland, Gerard, 1994. "On the Speed and Sequencing of Privatisation and Restructuring," Economic Journal, Royal Economic Society, vol. 104(426), pages 1158-1168, September.
    2. Brian Pinto & Marek Belka & Stefan Krajewski, 1993. "Transforming State Enterprises in Poland: Evidence on Adjustment by Manufacturing Firms," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1), pages 213-270.
    3. Christian von Hirschhausen, 1996. "Lessons from Five Years of Industrial Reform in Post-Socialist Central and Eastern Europe," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 65(1), pages 45-56.
    4. Pinto, Brian & Belka, Marek & Krajewski, Stefan, 1993. "Transforming state enterprises in Poland : macroeconomic evidence on adjustment," Policy Research Working Paper Series 1101, The World Bank.
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    Cited by:

    1. Radosevic, Slavo, 1999. "Transformation of science and technology systems into systems of innovation in central and eastern Europe: the emerging patterns and determinants," Structural Change and Economic Dynamics, Elsevier, vol. 10(3-4), pages 277-320, December.

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