Neo-Transitional Economies: The Broad Context

This is an exploratory paper of personal reflections on economic system issues, based on half a century of wide-ranging professional experiences, summarized in the section “Professional Background.”

The following broad generalizations are elaborated: (1) For a country’s sustained good economic performance, there is no alternative to a predominantly market-driven economy, supported by appropriate institutions. (2) In societies at all levels of development, it is essential to have mutually supporting cooperation between the private sector and the state (section “An Economic System with Universal Features?”). (3) The quarter-century transformation progress of the 29 former centrally planned economies of the USSR and Eastern Europe has been most uneven, as documented in the section “Relationship between Economic and Political System Transformation.” (4) Regarding China, it is NOT the country’s authoritarian political system but the skillful transformation of its economy into a market-driven one that has been principally responsible for the country’s impressive, long-term economic performance (section “China’s Economic Growth and Development Model”). The paper concludes by suggesting that the most fundamental determinants of a country’s long-term economic success are some combination of its geography, institutions, culture, and momentous historical events.