The inevitability of a fall in output in the early stages of transition to the market
Theoretical underpinnings
Bibliographic Data
| ID | 11601669 |
|---|---|
| Authors | Jan Winiecki (Aalborg University, corresponding author) |
| Year | 1991 |
| Volume | 43 |
| Issue | 4 |
| Pages | 669-676 |
| Publication date | 1991-01-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Soviet Studies (JOURNAL) |
| Journal identifiers | ISSN: 0038-5859 |
| Publisher | Routledge (PUBLISHER • GB) |
| DOI | 10.1080/09668139108411954 |
| OpenAlex | W2064321864 |
| Language | EN |
| Citations received | 14 |
| References cited | 8 |
THE STEEP FALL in industrial output in Poland and the even steeper one in East Germany at the start of the respective transition programmes came as a surprise to many analysts. It prompted a discussion on the 'costs of transition', giving the chance to criticise the 'big bang' (or 'shock therapy' or 'critical mass') approach of both residual believers in the old order and proponents of various allegedly painless formulae of gradual transition. Leaving aside the discussion itself, I shall concentrate here on the fall in output and its treatment as a cost of transition to the market. What is particularly puzzling is the near-complete neglect of the economic theory of the centrally planned (or centrally administered or Soviet-type) economy in discussion of the fall in output in the early stages of the transition period. I posit that both economic theory and empirical data supporting that theory clearly suggest exactly such an outcome after the start of the 'big bang'. I posit further that the fall in output can only to a certain extent be seen as a cost of transition, understood as a welfare loss. A major part of the fall in output has no impact on the welfare of the population. As the economic system changes, so does the behaviour of economic agents: firms and households. The change in behaviour inevitably induces a fall in output but the level of welfare remains unchanged. In this article, first, various sources of output loss are considered and their theoretical rationale is presented. Next, implications of output loss for welfare are presented in comparative economic systems' terms. Finally, policy implications are drawn
Development economics · Economics · Fall of man · Market economy · Neglect · Political science · Politics · Population · Shock (circulatory · Shock therapy · Sociology · Surprise · Welfare · Global Financial Crisis and Policies · Law · Medicine · Post-Communist Economic and Political Transition · Psychology · Russia and Soviet political economy · Social Psychology
Capitalist Triumphalism in the Eastern European Transition
Five Years of Reform
One Year After the Collapse of the USSR
The polish transition programme
Two Years After the Collapse of the USSR
Some consequences of eliminating unprofitable output
The Dilemmas of economic liberalism in Poland
Stabilization and recession in a transitional economy
Wage and price control policies in transition economies
The Transformation from Communism to Capitalism
Crucial relationship between the privatized sector and the generic private sector in post-communist privatization Determinants of economic performance
Patterns of Agrarian Transition
After State Socialism
Economics and the Russian Transition
| Unique citing works | 14 |
|---|---|
| Citations per year | 0,41 |
| Citation span | 1992 - 2015 (24) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 14 |