Ten Years after 'the Road to a Free Economy': The Author's Self-Evaluation
29 Pages Posted: 22 Sep 2000
Abstract
The book discussed several topics; the paper presents an evaluation of two issues only. As for ownership reform, there were alternative strategies suggested at that time. Strategy A recommended organic development: creating favorable conditions for bottom-up development of new entries; sale of state-owned firms, avoiding give-away schemes; and hardening the budget constraint. Strategy B proposed accelerated privatization, putting the emphasis on quick elimination of state-ownership. The main instrument was to give away state property (e.g. via a voucher-scheme), and shifting ownership into the hands of managers. "Road" suggested Strategy A, but the majority of the Western economics profession supported Strategy B. Experience seems to show the superiority of Strategy A. The author is less satisfied with the suggestions presented in the book for a stabilization program. The main weakness was the one-sided attention paid to short-term adjustment measures without sufficient elaboration of the profound institutional changes needed for sustainable stability.
JEL Classification: G34, L33
Suggested Citation: Suggested Citation
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