ABSTRACT
The literature on transitional economies has examined transformation mechanisms from a range of theoretical and political perspectives. By and large, these perspectives have polarized around two main policies – radical privatization and gradual reform. The former is concerned primarily with the change of ownership from public to private hands: the latter, the introduction of competition and the improvement of managerial and institutional capability. We can discern in this literature differences between the more Messianic voice of earlier writing on economic transformation (e.g. Kornai 1990; Sachs and Woo 1994) and the increasingly reflective or measured tone of later theory and evidence (e.g. Kolodko 1999; Carlin et al. 2001; Sachs et al. 2000a and b; Estrin 2002; Nolan 2003; Bhaumik and Estrin 2005). We can also note striking differences in the policies and practices described in works which examine economic transformation in, on the one hand, ECE countries (notably Russia) (see Buck et al. 1999; Estrin and Wright 1999; Brown and Earle 2001; Estrin et al. 2001; Bevan et al. 2001; Angelucci et al. 2002) and on the other, those of the People’s Republic of China (see Naughton 1994, 1995a; Rawski 1994; Nolan 1995a, 2001, 2003; Walder 1996; Kato and Long 2004; Hassard et al. 2004, 2006). This chapter examines such theories, perspectives and evidence, but centrally in relation to debates over China’s reform path and whether it is to be characterized as radical or gradual.
