ABSTRACT
This chapter examines the theory of reforms in light of the experience of the recent reforms which preceded and followed the dissolution of the Soviet Union. It reviews the essential components of reform strategy concerning the nature, sequence, and speed of the reform process. The chapter describes the major political cycles that have characterized the reform process before, during, and after the dissolution of the Soviet Union. The Russian reforms now appear poised at a critical juncture, one that may well determine whether, and in what form, the transformation to a market economy will proceed. However, private property rights must be created, distributed and credibly enforced before exchange in these rights can take place in markets. Most economists today agree that privatization and stabilization should precede liberalization in transforming a centrally planned to a market economy. With the initiation of perestroika in the mid-1980s Gorbachev signaled a willingness to undertake "step-by-step" economic reforms.
