Building Capitalism
This is the most
comprehensive empirical analysis of the economic transformation of the former Soviet bloc
during the first decade after communism. It debunks many myths, seeing transition as a
struggle between radical reformers and those thriving on rent seeking. People have gained
from fast and comprehensive reforms, but several countries have gotten stuck in
corruption. Economic decline and social hazards have been greatly exaggerated, since
people have forgotten how awful communism was. Swift liberalization of prices and foreign
trade, as well as rapid and profound fiscal adjustment, have been vital for growth,
institutional reforms, legality and greater equity. Privatization has been beneficial, and
its effects will grow over time. The main problem has been the continuation of unregulated
and ubiquitous state apparatuses living on corruption, while no country has suffered from
too radical reforms. Where malpractices of the elite can be checked, market reforms and
democracy have proceeded together.
Building Capitalism has all
the right ingredients: it is on a critically important issue; it is based on an
extraordinarily detailed knowledge of economic and political history, pre- and post- the
break-up of the former Soviet Union; and it displays a full acquaintance with the
literature, Anders Aslund's naturally exuberant style, and a clear point of view.
Whether you agree or disagree with the argument, you should not be indifferent to this
book. And by the end, you should fundamentally agree.
Stanley Fischer,
International Monetary Fund
Contents
Introduction
1. What communism actually
was
2. The decline and fall of
socialism
3. Strategic policy choices
4. Changes in output and
their causes
5. Liberalization
6. Stabilization
7. Privatization
8. Interaction with the
outside world
9. Social developments and
policy
10. The politics of economic
reform
Conclusions
508 pages