Strategies of Transition: A Political Economy Approach

The transition to democracy and the market economy in Central and Eastern Europe (CEE) and in the former Soviet Union (FSU) may be the most important political and economic event in the world history of the last decade of the twentieth century. This chapter deals mainly with the problem of the optimal transition strategy and its political economy determinants.1 The intention is to revisit the controversy of how quickly and radically the new market rules (and their individual components) should be adopted in the formerly communist countries (FCC). Particularly, the chapter deals mainly with two basic questions: Why a fast transition is better than a slow one What factors determine the speed, and therefore the effectiveness, of the transition process?