The Economics of Transition [antikvár]

Preface 'Until recently the world was divided into the first, second and third world. The notion of the second world is now losing its substance. What remains is a huge amount of debris and ruins which is a combination of the first and third worlds: by its aspirations and longing to create a democratic political system and prospering market economy it relates to the first world, a part of which it would like to become; however, by the state of the economy and the types of national and social problems it often resembles the third world.' (Vaclav Havel, President of the Czech and Slovak Federal Republic, 4 September 1991, Prague, opening speech of the International Forum for Culture and Democracy) Since the Berlin Wall was breached on 9 November 1989, the former socialist countries have remained on top of the agenda in the Western media, not only because of dramatic political developments such as the anti-Gorbachev coup and the collapse of the USSR in 1991, or because of the lingering state of war in the former Yugoslavia and in parts of the former USSR. Economic developments make headlines as well. The transition to the market arouses public interest out of proportion to the share of these countries in the world economy. Western governments, firms, international organisations and ordinary citizens, are eager to keep informed, to understand, to help, to advise, to trade, to invest, to be involved in one way or another. At the same time, after several years of transition, frustrations and even a kind of fatigue develop in the West. Though transition to the market is now acknowledged as a longlasting process which might extend to a whole generation, structural transformation seems very slow. While growth has resumed in Eastern Europe, there are only a few signs of the possible ending of a protracted recession in Russia. Along with this gloomy assessment, the West increasingly feels the impact of the East, in many ways. East and West are now parts of the same world. In the past, following the usual international classification, one could divide the world into three parts: the developed market economies, or, in the parlance of the East, the capitalist world; the 'second' world of the centrally planned economies, which used to call itself socialist; the Third World of the developing economies. Now there is just an economic division between rich and poor countries. There is no longer a systemic division. The market economy has won. What is the price of this victory? Will the Western model succeed in the East? Will the rich Western countries be able to go on supporting the South