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  4. Fall 1991
  5. Microeconomic Issues in the Transition to a Market Economy

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Microeconomic Issues in the Transition to a Market Economy

  • Jan Svejnar
Journal of Economic Perspectives
vol. 5, no. 4, Fall 1991
(pp. 123–138)
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Abstract

The socialist system introduced microeconomic distortions that probably transcend those observed in the third world. The recent developments in Poland, Yugoslavia, and the Soviet Union also support the hypothesis that macro stabilization will be difficult to achieve in the transforming socialist economies in the absence of adequate micro adjustments. In this paper, I address what I consider to be the most important micro issues related to the transition from socialist to market economies. First I summarize the initial microeconomic conditions, covering labor, capital, and energy markets; the product markets, industrial organization, and trade; and the market for land and housing. Then, I describe the main changes that have taken place in the early stages of the transition. Finally, I discuss the micro policy agenda that needs to be addressed if the transition is to be successful

Citation

Svejnar, Jan. 1991. "Microeconomic Issues in the Transition to a Market Economy." Journal of Economic Perspectives, 5 (4): 123–138. DOI: 10.1257/jep.5.4.123

JEL Classification

  • P21 Socialist Systems and Transitional Economies: Planning, Coordination, and Reform
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