Assistance to the Transition Economies : Were There Alternatives?

Abstract

Twelve years after the fall of the
 Berlin Wall, domestic and international analysts of the
 transition economies by and large agree that the transition
 from central planning to a market economy has been
 exceedingly difficult. There has also been a major debate
 about the extent to which the transition to date has
 succeeded or failed. This paper provides an assessment of
 the policies that were followed and discuss the extent to
 which there were known alternatives that can have resulted
 in superior outcomes in terms of: (a) gross domestic product
 (GDP) growth and other principal performance indicators, (b)
 building honest and competent institutions, and (c) creating
 a more transparent and less corrupt system of corporate and
 national governance. Section two provides a brief overview
 of performance since 1989. Section three presents the
 recommendations that were made and policies that were
 followed. The paper concludes in section four by assessing
 the extent to which alternative paths can have been followed
 and what the likely outcomes will have been.