Beyond Transition. Development Perspective and Dilemmas
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Book Review Beyond Transition. Development Perspective and Dilemmas Marek Dabrowski, Ben Slay and Jaroslaw Neneman (eds) Ashgate: Aldershot, Hants, UK, 283pp. Comparative Economic Studies (2006) 48, 183–185. doi:10.1057/palgrave.ces.8100130
Beyond Transition is a collection of 18 papers presented at a conference convened in 2003 by the Center for Social and Economic Research (CASE), the Warsaw-based research and policy advisory organisation. The conference, held at Falenty near the Polish capital, was attended by 240 participants from Central and Eastern Europe, the Transcaucasus, Central Asia, Western Europe, and the United States. Their topic was the approaching end of ‘transition’, defined as ‘a movement away from one institutional system or policy design [central planning] to another [market]’ (p. xv) in the postcommunist countries. The Central European and Baltic middle-income and democratic-capitalist countries were leading reformers and by 2004 had also joined the European Union (EU). These early reformers are increasingly facing developmental challenges, which ‘do not differ fundamentally from those experienced by other developed and developing [market-oriented] economies’ (p. xv). At the level of theory, then, transitional economics morphs into macro and development economics. Somewhat less advanced on the same path are the Balkan countries like Bulgaria, Romania, and Croatia. In the 12 lower- or lower-middle income economies of the Commonwealth of Independent States (CIS), where reform has been wanting, one finds a thin layer of ‘distorted capitalisms and highly imperfect democracies’ (pp. xv–xvi) – actually more economically contorted and politically blemished today than they had been at the time of the Falenty get together, in my opinion. The 18 chapters of the collection are bundled into five thematic packages. The first six chapters deal with monetary policy, exchange rates, and euroisation. In the part devoted to labour markets in Central and East Europe, Jan Svejnar finds those arrangements to be as flexible and functional there as in wealthier OECD and EU market economies. Olivier Blanchard graces this section with a thoughtful disquisition on designing labour market institutions. In the next part, the efficiency and equity problems of national tax systems are assessed, including the need to resist the venerable temptation that afflicts politicians to use tax revenues to prop up hobbling firms and
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industries (‘sensitive sectors’) in the name of picking the winners (subsidised inefficiency). Tax treatment for small firms, and tax system and performance effects on foreign direct investment are also included. The fourth part deals with corporate rules and governance, including the role of privatisation, institutional measures to improve competition and capital markets, protection of shareholder rights, and the importance of the legal framework. The fifth and last concerns the question of how EU enlargement might influence other post-communist countries
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