ABSTRACT
The literature on the transition of ex-Communist economies to the market system frequently recommends the transformation of institutions in these societies into their Western, market-oriented counterparts. Fiscal and monetary policies that restrain government spending and limit inflation are considered critical, and most approaches put them first under the rubric of macroeconomic stabilization. The Western literature on organization change usually assumes that organizations are rationally designed and managed. The most successful rapid establishment of reliable currencies has historically taken place through currency boards, an arrangement whereby the currency board issues a new currency backed on a one-to-one basis by commodity money or by a foreign hard currency. The widespread acceptance of the standard two-tiered banking system suggests that consideration as a policy option of a currency board or free banking is unlikely and its adoption even less likely. One general assumption of the parallel strategy is that organizations are hard to change, especially long-established, specialized organizations.
