Joseph Stiglitz

New Bridges Across the Chasm: Macro- and Micro-Strategies for Russia and other Transitional Economies

Coauthor(s): David Ellerman.

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Abstract:
This century has been marked by two great economic experiments. The outcome of the first set, the socialist experiment that began, in its more extreme form, in the Soviet Union in 1917, is now clear. The second experiment is the movement back from a socialist economy to a market economy. Ten years after the beginning of the transition in Eastern Europe and the Former Soviet Union: How do we assess what has happened? What are the lessons to be learned? A decade after the beginning of the transition in Eastern Europe and the Former Soviet Union (FSU), and two decades after the beginning of the transition in China, the picture is mixed. Some have formulated the public debate about the transition as a question of fast versus slow. But that seems an ill-formulation since one can find successes and failures on both sides of the fast-slow dichotomy. The task now is build new bridges across the chasm, which means to change institutions in a determined but incremental way. We begin by outlining four macro-strategies or bridges, and then we turn to a long list of "micro" suggestions, many of them drawn from the experience over the last decade in transitional economies.

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