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Issues in socialist economy reform

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  • Fischer, Stanley
  • Gelb, Alan

Abstract

This paper examines issues involving the design and sequence of economic reform in formerly socialist economies that have made the political decision to move to a private market economy. They also examine the potential role of foreign countries in providing aid, technical assistance, and market access. In economies that are actually or potentially unstable macroeconomically, the first priority is macroeconomic stabilization and measures to harden budget constraints and create an emergency social safety net. At the center of the reform process are price reform, trade liberalization, enterprise restructuring, and privatization. Banking reform, training, and the development of other financial markets must begin immediately, but the ability of the financial system to allocate resources efficiently will remain limited until enterprise and price reform are sufficiently advanced. In systemwide reform, the notice of sequencing should be replaced by that of packaging. A large number of interrelated reforms - including those needed to create an appropriate legal structure and develop the skills needed in a market economy - has to be put in place very early, although the speed of implementation will differ. However rapidly the reforms are initiated, their completion - especially privatization - is bound to take many years.

Suggested Citation

  • Fischer, Stanley & Gelb, Alan, 1990. "Issues in socialist economy reform," Policy Research Working Paper Series 565, The World Bank.
    • Handle: RePEc:wbk:wbrwps:565
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    References listed on IDEAS

    as
    1. Jan švejnar, 1990. "A Framework for the Economic Transformation of Czechoslovakia," Eastern European Economics, Taylor & Francis Journals, vol. 29(2), pages 5-28, December.
    2. Feige, E.L., 1991. "Socialist Privatization," Papers 1a, United Nations World Employment Programme-.
    3. David Lipton & Jeffrey D. Sachs, 1990. "Creating a Market Economy in Eastern Europe: The Case of Poland," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 75-148.
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    Cited by:

    1. Michael Bruno, 1994. "Stabilization and Reform in Eastern Europe: A Preliminary Evaluation," NBER Chapters, in: The Transition in Eastern Europe, Volume 1, Country Studies, pages 19-50, National Bureau of Economic Research, Inc.
    2. Lee, Chung Hoon, 1993. "Korean unification: Issues in transition and economic union," Kiel Working Papers 590, Kiel Institute for the World Economy (IfW Kiel).
    3. Jenkins, Glenn P, 1992. "Privatization and Pension Reform in Transition Economies," Public Finance = Finances publiques, , vol. 47(Supplemen), pages 141-151.
    4. Rice, Eric, 1991. "Managing the transition : enhancing the efficiency of Eastern European governments," Policy Research Working Paper Series 757, The World Bank.
    5. Hinojosa-Ojeda, Raul & Robinson, Sherman & Tesche, Jean, 1992. "Hungary, Austria, and the European Community: A CGE Model of Economic Refrom and Integration," CUDARE Working Papers 198597, University of California, Berkeley, Department of Agricultural and Resource Economics.
    6. Guillermo A. Calvo & Jacob A. Frenkel, 1991. "Obstacles to Transforming Centrally-Planned Economies: The Role of Capital Markets," NBER Working Papers 3776, National Bureau of Economic Research, Inc.
    7. Jim Leitzel, 1993. "Russian Economic Reform: Is Economics Helpful?," Eastern Economic Journal, Eastern Economic Association, vol. 19(3), pages 365-378, Summer.
    8. Gerard Caprio, Jr., 1995. "The role of financial intermediaries in transitional economies," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 42(1), pages 257-302, June.
    9. Diwan, Ishac & Saldanha, Fernando, 1991. "Long term prospects in Eastern Europe : the role of external finance in an era of change," Policy Research Working Paper Series 695, The World Bank.
    10. Mr. Jacob A. Frenkel & Mr. Guillermo Calvo, 1991. "From Centrally-Planned to Market Economies: The Road from CPE to PCPE," IMF Working Papers 1991/017, International Monetary Fund.
    11. Kornai, János, 2022. "A privatizáció elvei Kelet-Európában [The principles of privatisation in Eastern Europe]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 34-56.
    12. Stefano Basilico & Nils Grashof, 2023. "The transition of brown regions: A matter of timing?," Jena Economics Research Papers 2023-003, Friedrich-Schiller-University Jena.

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