A Study of the Market Reforms in Post-Communist Eastern Europe

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A Study of the Market Reforms in Post-Communist Eastern Europe Introduction Poland, as well as it's fellow post-communist countries, face an arduous task in re-inventing their economies to match the dominant Western style currently dominating the world. The difficulties lie in the areas of ideology, structural needs (massive changes required), world recession(current) and debt load. Communist Economics Why did the economics of the communist bloc fail so miserably? Why has every single socialist, fascist, communist and other non-democratic country had to implement economic change in order to survive? This is due to some inherent problems in the command economy idea. Monopolies (in a command economy) tend to produce inefficiency, low quality goods, lack of innovation and technological improvement. Command economies tend to focus on growth rather than strength leading to larger production and an evan. worse use of available resources. The 1980's marked a change in world markets meant that the communist economies were faced with four challenges that would, if met, have meant the continuation of the USSR. Resource saving miniaturization requiring high technology and skill were demanded (command economies have neither), Flexible production to meet a variety of needs (command economies have large factories to keep production high - they, thus, did not have the funds or ability to affect the necessary changes to their means of production), the "information age" meant that the communist bloc had to deny the new prevalent types of technology, which would spread Western ideas, and thus they fell behind), and "software" became essential to the growth of industry (the "hardware" focus of the East could not absorb this new approach. As well, the changes are being attempted in a deep period of economic crisis that make an already difficult process even more difficult. Changing the Economy Systematic transformation requires institutional innovations, the internal liberalization of the economy, the external liberalization and the adjustment of the real economy as well as the monetary system. Not only does there need to be a different institutional framework for a market economy but one has to remove most of the inherited structures and to change the typical behavioral patterns in industr... ... middle of paper ... ...Verlag Heidelberg , 1992. -Macesich, G. and Dimitrijevic, D. "Monetary Reform in former Socialist Economies", Praeger, London 1994. -Mihalyi, P and Smolik, J.E. ,"Leading is not enough: an Assessment for Western Support for Reforms...." Paper presented at 1st conferance of EACES, Verona, 1990. -Nuti, D.M. 1)"Internal and International Aspects......in Poland", Paper presented at 5th Congress of EEA, Lisboa, 1990. 2)"Privatization of Socialist Economies", Paper presented at 1st Conference of EACES, Verona 1990. -Poznanski, K. Ed "Stabilization and Privatization in Poland", Kluwer Academic Publishers, Boston , 1993. -Sachs, J. "Poland's Jump to the Market Economy", MIT press, Massachusetts,1993. -Shen, R. "The Polish Economy" Praeger, New York, 1992. -Slay , B. "The Polish Economy" Princeton University Press, New Jersey, 1994. -Summers, R. and Heston, A. "A New Set of International Comparisons...", Review of Income and Wealth 34, No1:1-25. -Zabkowicz, A. "Stabilization, Adjustment and Economic Activity - the Polish and Hungarian Experience" Discussion Paper 328, Institute of Developement studies 1993.
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