chapter  7
The Problem of Transition from a Soviet-type to a Market Economy
Pages 34

The collapse of Communist Party control in Eastern and Central Europe from 1989 to 1991 began an economic transformation that is gradually turning former Soviet-type economies into market economies. These changes are taking longer to implement and are proving to be more painful, however, than most people expected in 1990. While much progress was achieved between 1989 and 1996, much also remains to be done, and most of these emerging economies experi­ enced negative growth or stagnation, on balance, between 1985 and 1994 (Table 3.2). By contrast, the two Asian transition economies, China and Vietnam, began their transformations earlier and proceeded at first more slowly and deliberately toward a market economy. As a result, their economic growth rates have taken off under transition, to the point where they have become Asia’s latest “miracle” economies. Here the Communist Party has retained its monopoly on political power, which may be part of the reason for their success thus far.