IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwkwp/480.html
   My bibliography  Save this paper

From socialism to an institutional void: Notes on the nature of the transformation crisis

Author

Listed:
  • Schmieding, Holger

Abstract

This paper discusses the possible nature of a transformation crisis. The major point is that the institutional void which the collapse of socialism has left behind is a major cause of the slump. The wealth of developed economies, be they socialist or capitalist, springs from a complicated pattern of an extended division of labour. Any beneficial specialisation in production in turn depends on an appropriate institutional framework for the reliable coordination of the various activities. The essence of systemic transformation is an institutional revolution: the old high-cost institutional setting (socialism) is abolished to make way for an ultimately far superior low-cost one (capitalism). However, the emergence, establishment and consolidation of the new institutional arrangements takes time. Furthermore, the new social devices lack two essential features; they have no well-established reputation (credibility) and economic agents are not yet familiar with them (information costs). The present institutional deficiencies include the lack of a reliable means of deferred payments, i.e. a sound money. Before these institutional aspects are elaborated, this paper addresses some other possible causes of the transformation crisis, notably the issue of inherited inefficiencies, the role of an insufficient responsiveness of supply and the consequences of real factor price rigidity.

Suggested Citation

  • Schmieding, Holger, 1991. "From socialism to an institutional void: Notes on the nature of the transformation crisis," Kiel Working Papers 480, Kiel Institute for the World Economy (IfW Kiel).
  • Handle: RePEc:zbw:ifwkwp:480
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/46920/1/256495300.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Richard A. Brecher, 1974. "Minimum Wage Rates and the Pure Theory of International Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(1), pages 98-116.
    2. Hare, Paul G & Hughes, Gordon, 1991. "Competitiveness and Industrial Restructuring in Czechoslovakia, Hungary and Poland," CEPR Discussion Papers 543, C.E.P.R. Discussion Papers.
    3. Kronman, Anthony T, 1985. "Contract Law and the State of Nature," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 1(1), pages 5-32, Spring.
    4. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Siegmund, Uwe, 1997. "Wie privatisieren und wer privatisiert? Zur Erklärung der Wahl der Privatisierungsmethode und -organisation," Kiel Working Papers 812, Kiel Institute for the World Economy (IfW Kiel).
    2. Martin Raiser, 1993. "Old habits die hard," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 28(4), pages 170-177, July.
    3. Schrammel, Tine, 2013. "Bridging the Institutional Void: An Analytical Concept to Develop Valuable Cluster Services," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 24(2), pages 114-132.
    4. Holger Schmieding, 1993. "From plan to market: On the nature of the transformation crisis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 129(2), pages 216-253, June.
    5. Raiser, Martin, 1992. "Soft budget constraints: An institutional interpretation of stylised facts in economic transformation in Central Eastern Europe," Kiel Working Papers 549, Kiel Institute for the World Economy (IfW Kiel).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mathias Dewatripont & Gérard Roland, 1996. "Transition as a process of large‐scale institutional change," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 4(1), pages 1-30, May.
    2. Holger Schmieding, 1993. "From plan to market: On the nature of the transformation crisis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 129(2), pages 216-253, June.
    3. Schweinberger, Albert G., 2001. "Capital, heterogeneous labour, global goods markets and unemployment," Discussion Papers, Series I 309, University of Konstanz, Department of Economics.
    4. Richard A. Brecher & Zhiqi Chen, 2014. "Unemployment and welfare consequences of international outsourcing under monopolistic competition," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(2), pages 540-554, May.
    5. repec:dgr:rugsom:00c21 is not listed on IDEAS
    6. Kala Krishna & Abhiroop Mukhopadhyay & Cemile Yavas, 2005. "Trade with Labor Market Distortions and Heterogeneous Labor: Why Trade Can Hurt," Contributions to Economics, in: Günter S. Heiduk & Kar-yiu Wong (ed.), WTO and World Trade, pages 65-83, Springer.
    7. Martin Raiser, 1993. "Old habits die hard," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 28(4), pages 170-177, July.
    8. Naujoks, Petra & Schmidt, Klaus-Dieter, 1995. "Foreign direct investment and trade in transition countries: Tracing links – A sequel," Kiel Working Papers 704, Kiel Institute for the World Economy (IfW Kiel).
    9. Ilham Haouas & Mahmoud Yagoubi & Almas Heshmati, 2005. "The impacts of trade liberalization on employment and wages in Tunisian industries," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(4), pages 527-551.
    10. Franz, Wolfgang, 1994. "Central and East European labor markets in transition: Developments, causes, and cures," Discussion Papers 19, University of Konstanz, Center for International Labor Economics (CILE).
    11. Nakakuki, Masayuki & Otani, Akira & Shiratsuka, Shigenori, 2004. "Distortions in Factor Markets and Structural Adjustments in the Economy," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 22(2), pages 71-99, May.
    12. Sinn, Hans-Werner, 2006. "Das deutsche Rätsel," Munich Reprints in Economics 950, University of Munich, Department of Economics.
    13. Oslington, Paul, 2005. "Trade and the distributional politics of international labour standards," MPRA Paper 963, University Library of Munich, Germany.
    14. Bharat Hazari, 1978. "The theory of wage differentials, induced technical progress and the pure theory of International trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 114(1), pages 146-159, March.
    15. Céline CARRERE & Marco FUGAZZA & Marcelo OLARREAGA & Frédéric ROBERT-NICOUD, 2014. "Trade in Unemployment," Working Papers P101, FERDI.
    16. Walsh, Patrick Paul & Whelan, Ciara, 2001. "Firm performance and the political economy of corporate governance: survey evidence for Bulgaria, Hungary, Slovakia and Slovenia," Economic Systems, Elsevier, vol. 25(2), pages 85-112, June.
    17. Raúl de Arriba Bueno, 2006. "Private or Market Economy in Bulgaria? An Institutional Approach to the Bulgarian Transition," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 71-89.
    18. Sebastian Edwards, 1987. "Economics Liberalization and the Equilibrium Real Exchange Rate in Developing Countries," UCLA Economics Working Papers 433, UCLA Department of Economics.
    19. repec:gnv:wpaper:unige:77631 is not listed on IDEAS
    20. Blangiewicz, Maria & Charemza, Wojciech W., 1999. "East European Economic Reform: Some Simulations on a Structural Vector Autoregressive Model," Journal of Policy Modeling, Elsevier, vol. 21(5), pages 535-557, September.
    21. Alain de Crombrugghe & David Lipton, 1993. "The Government Budget and the Economic Transformation of Poland," WIDER Working Paper Series wp-1993-111, World Institute for Development Economic Research (UNU-WIDER).
    22. Lobanov, M. & Zvezdanovic Lobanova, J. & Zvezdanovic, M., 2022. "Typologization of industrial systems in the countries of Central-Eastern and South-Eastern Europe," Journal of the New Economic Association, New Economic Association, vol. 56(4), pages 92-122.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ifwkwp:480. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.