The Transition Programme: Interdependence between the Key Components

Tomasz Mickiewicz

Chapter 2 in Economic Transition in Central Europe and the Commonwealth of Independent States, 2005, pp 26-46 from Palgrave Macmillan

Abstract: Abstract Economic transition consists of changing the system of control rights, incentives and information in an economy. The change should result in a better ‘match’ between control rights and residual claims, making the motivation of economic agents consistent with the aim of value maximization. As discussed in Chapter 1, one important element of efficiency relates to flexibility: the producers should adequately respond and adjust to changes (1) in the real structure of costs (scarcity), and (2) in the set of preferences of buyers. However, it is not only the behaviour of producers, but also of other economic agents, that matters: households should be motivated to save instead of hoarding goods, and investors to chose the long-term best value-adding projects.

Keywords: Economic Transition; Transition Programme; Competition Policy; Institutional Reform; Budget Line (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1057/9780230504349_2

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