The transition towards market economy in the European East

a balance of the debate aboutswitching from pre-planned to market economies

Abstract

In this article we discuss the literature about the post-socialist transition in the European East in the nineties. We put emphasis on the transitional process from a pre-planned to a market economy. The approaches that polarize the debate in the region - gradualists versus shock therapists — are presented. It is shown, finally, based on socio-economical literature on the subject that the results of such transition are way more complex than the intentions of any of the players involved. In particular, the literature shows that the pro-market reforms in the socialist period and the radicalism seen on the recent liberalization reforms have brought forth a lot more diverse effects than expected.