No. 34, 1995 - The Political Economy of the Reform Strategy: China and Eastern Europe Compared

Following the annus mirabilis the concomitant economic miracle, expected by most agents and observers of the Central and Eastern European scene has not materialised. Conversely: not only economic performance, but the recipes and academic reflections of systemic transformation have remained dismal, inviting sweeping criticism pertaining to both theories and implementation. Meanwhile, the collapse of the communist system in China, forecasted by many, has not materialised either. On the contrary a generally successful stepwise evolution of market mechanism has been coexisting with high rates of reported economic growth over 16 years by now. Knowledgeable analysts highlight the clear tendency of China’s move to the market, despite the many constraints and paradoxes of its policies. It comes therefore hardly as a surprise that both in international organisations and in the CEEC a growing appreciation of Chinese experiences emerged. Moreover, calls to emulate the Chinese also abound.
This paper is about the limitations and possibilities of such comparisons. By looking into the salient features of the respective reform strategies an attempt is made to highlight the common and different features of the respective strategies, with a focus on CEE. As both Chia and CEE are characterised by a great diversity of different experiences, the limits of a paper confines the present discussion to a rather schematic approach. In this nine these are advanced in order to present a bird’s eye view on the political economy of the respective reforms, i.e. moves to the market. These aim at highlighting the genre rather than the particulars of reforms. The concluding section offers five-five preliminary lessons that CEE and China respectively, could learn from each-other’s reform strategy.

The paper is available here.