The success and failure of reforms in transition economies

Stephen L. Parente, Victor Rios-Rull

Research output: Contribution to journalReview article

4 Scopus citations

Abstract

This paper argues that an important reason why Russia's performance and China's performance under capitalism have differed dramatically is that different arrangements governing the determination of prices and work practices evolved during the transition process. In Russia, the arrangement, which conferred monopoly rights to industry groups leftover from socialism, prevented the adoption of better technology. In China, the arrangement that evolved contained no such monopoly elements. The key factor in determining which arrangement evolved was the strength of the central government. We put forth a model that implements these ideas and provide evidence in support of this theory.

Original languageEnglish (US)
Pages (from-to)23-42
Number of pages20
JournalJournal of Money, Credit and Banking
Volume37
Issue number1
DOIs
StatePublished - Feb 1 2005

Keywords

  • China
  • Competition
  • Economic transition
  • Monopoly
  • Russia

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