Economic Methods (Wirtschaftswissenschaftliche Verfahren)

The contribution of economic analysis to the study of transformations is complicated by difficulties concerning both subject matter and method. The subject may be a grand social transformation or it may be a transformation of a more narrowly defined economic system. The method may be derived from the mainstream, neo-classical economics, using abstract models and a particular set of analytical tools, or it may use a more eclectic mix of insights from different disciplines and seek generalisations across small numbers of cases. The first of these approaches has strong attractions and plenty of defenders, but also many critics. The recent history of the economic contribution to the study of transformations has therefore been characterised by tension as a discipline that prides itself on abstraction and rigour confronts processes that are complex and multi-faceted and frequently defy meaningful conceptual simplification. We set this out in the following sections, starting with a recognition of distinct approaches to economics, then moving to a discussion of the most abstract approaches to transformation. That is followed by sections that concentrate on the post-socialist transformations to illustrate the difficulties in measuring the phenomena and how econometric methods can be used to assess particular policy measures