Financial policies in socialist countries in transition

Pleskovic, Boris

doi:10.1080/14631379508427814

Cited by 4 publications

(4 citation statements)

References 8 publications

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“…The subsidies to the nonviable firms could even increase due to the private owners having greater incentives to lobby for subsidies and protection (Lin and Li 2008). In effect, this was what happened in Russia and many other countries in Eastern Europe and the former Soviet Union (Pleskovic 1994;Lavigne 1995;Brada 1996;Frydman, Gary, and Rapaczynski 1996;Stark 1996;Sun 1997;World Bank 2002). In the end, the economy could find itself in an awkward situation of shock without therapy (Kolodko 2000;Galbraith 2002).…”

Section: Viability and The Failure Of Washington Consensusmentioning

confidence: 87%

The Washington Consensus revisited: a new structural economics perspective

Lin

2014

Journal of Economic Policy Reform

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The Washington Consensus reform resulted in economic collapse and stagnation in many transition economies and "lost decades" in other developing countries in 1980s and 1990s. The paper provides a new structural economics perspective of such failures. The Washington Consensus reform failed to recognize that many firms in a transition economy were not viable in an open, competitive market because those industries went against the comparative advantages determined by the economy's endowment structure. Their survival relied on the government's protections and subsidies through various interventions and distortions. The Washington Consensus advised the government to focus their reforms on issues related to property rights, corporate governance, government interventions, and other issues that may obstruct a firm's normal management. Without resolving the firms' viability problem, such reforms led to the firms' collapse and an unintended decline and stagnation of the economy in the transition process. This paper suggests that the viability assumption in neoclassical economics be relaxed when analyzing development and transition issues in socialist, transition, and developing economies.

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Section: Viability and The Failure Of Washington Consensusmentioning

confidence: 87%

The Washington Consensus revisited: a new structural economics perspective

Lin

2014

Journal of Economic Policy Reform

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“…In other words, at least for the present, the non-state sector is still seen as a safety-valve for the shortcomings of the state sector. Pleskovic (1994) provides an interesting analysis of the financial systems of eastern European economies in transition in the early nineties. The objective at that time was for most of those economies to move slowly to a capitalistic, market-driven system.…”

Section: The Cuban Non-state Sector and The Banking Sector In An Econmentioning

confidence: 99%

“…The objective at that time was for most of those economies to move slowly to a capitalistic, market-driven system. Pleskovic (1994) lays down four planks for the overhaul of the financial systems of those economies: demonopolization of banking, improvement of the system of payments, change in the structure of ownership (including privatization) and the introduction of market-based financial legislation.…”

Section: The Cuban Non-state Sector and The Banking Sector In An Econmentioning

confidence: 99%

The new financial framework for the Cuban non-state sector

Alejandro

Viswanath

2018

Post-Communist Economies

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The Cuban economic system and, along with it, the Cuban financial system has been changing since the coming to power of Raul Castro. In this paper, we analyze some of the changes in the Cuban financial system and the goals of the government in implementing these changes. Using the results of a survey of non-state businesses, we look at the microfinance sectorthe provision of financial services to the small and medium enterprises in the non-state sectorfrom two perspectives: first, the nature of the new credit regulations and bank policies and how they accomplish the evaluation of credit to a hitherto non-existent sector; and second, how do these small business clients view their relationship with their lender state banks. We look at Cuban finance from the perspective of a socialist economy in transition and compare it to microfinance elsewhere, particularly in China and India.

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“…That they have not done so indicates that incentives for closure are weak or negative because of repayment, employment, social service provision, or other considerations. Is in Poland in 1990-91, not a single large state enterprise was declared bankrupt or was liquidated, and only 526 small and medium scale enterprises were liquidated from among several hundred thousand (Pleskovic, 1994). During this period, Poland was experiencing the effects of 'shock therapy'significant changes in GDP, per capita incomes, unemployment rates, and other macroeconomic indicatorsthat would be expected to result in numerous bankruptcies.…”

Section: B Bankruptcy and Liquidationmentioning

confidence: 99%