Building Capitalism: Lessons of the Postcommunist Experience

A decade of postcommunist transformation has brought widely differing outcomes
to the countries of the former Soviet bloc, ranging from fairly normal market
economies to state-owned and state-controlled economies. These economic systems and their performance have directly resulted from the policies the countries pursued. No country has suffered from too radical reforms‹liberalization, stabilization, and privatization have driven growth. The main problem limiting growth in countries with gradual or no reforms is the rent seeking caused by transitional market distortions. Countries with more effective democracies have produced better market reforms, because the voices of liberal market reformers are more likely to be heard in the struggle with the rent-seeking elite, who would continue attempting to make money on the transition.

Available online only in Russian

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