chapter  18
24 Pages

Post-communist transition and the post-Washington consensus

The centrally planned economy has ceased to exist. Even in countries still considered socialist, such as China and Vietnam, the mechanism of economic coordination has shifted to a great extent from state intervention to market allocation. During the 1990s the process of post-socialist transformation has advanced signiflcandy. About thirty countries in Eastern Europe, the former Soviet Union and Asia are involved in vast systemic changes. Undoubtedly, these changes are leading to full-fledged market economies, though the precise outcome of transformation will vary across countries. Some, leaders in transition and well placed geopolitically, are set to join the European Union in the foreseeable future; others, lagging behind in systemic changes, will remain hybrid systems with the remnants of central planning alongside elements of market regulation and a growing private sector. Some will expand quickly and catch up with their developed neighbours within a generation, others will experience sluggish economic growth and a relatively low standard of living.