Transition to a Market-Oriented Economy: China versus Eastern Europe and Russia

Justin Lin () and Valery Makarov
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Valery Makarov: Central Economic-Mathematical Institute

Chapter 8 in The Institutional Foundations of East Asian Economic Development, 1998, pp 215-251 from Palgrave Macmillan

Abstract: Abstract For the transition from a centrally planned economy to a decentralized market economy, there are two different approaches. The first is a ‘big bang’ or ‘shock therapy’ approach; the reforms undertaken in Eastern Europe and the former USSR in recent years are typical examples. This approach considers stabilization, marketization, and privatization to be the necessary components of a successful transition and attempts to complete all these components simultaneously or in a short sequence. The contrasting alternative is the ‘gradual’, ‘organic’, or ‘evolutional’ approach, and this latter has characterized China’s recent reforms. It is piecemeal, partial, incremental, sequential, often experimental, and without large-scale privatization.

Keywords: Interest Rate; Total Factor Productivity; Foreign Exchange; Heavy Industry; Allocation Mechanism (search for similar items in EconPapers)
Date: 1998
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DOI: 10.1007/978-1-349-26928-0_8

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