ABSTRACT
Economic transition in the post-communist context involves not just a reduction in the role of the state, but a qualitative redefinition of it. The task is to transform states designed for the purposes of managing the socialist economy into ones capable of promoting radical economic reconstruction along liberal market lines. Post-communist economic transition amounts to a ‘revolution from above’, to create the institutions of a market economy from scratch. Clearly, this places extraordinary demands on the state, which is required to intervene actively in the process, but in a qualitatively different way from in the past, under the communist regime. There are important parallels in the tasks faced by Latin American and Third World states embarking on economic liberalization and structural adjustment (see Healey and Robinson, 1991). The literature on ‘state failure’ derived from the experiences in these countries has had an important influence on the design of strategies for post-communist economic transition (see, for example, Krueger, 1989), but it tends to be profoundly sceptical about the role of the state in economic reform, and to see the main problem in terms of ‘rolling back’ the state, minimizing its capacity to intervene in the economy. An alternative view is that of Joan Nelson, who argues that what is required is ‘not so much a less powerful state as one that plays different roles and does so more effectively’ (Nelson, 1989:10).
