Property Relations and Financial Reforms in Transition Economies

Property relations and financial markets are key aspects of the transition to a market economy. This paper reviews conceptual analysis and recent experience in these areas under five broad headings: (1) property rights and the legal framework; (2) privatisation; (3) the management and regulation of state-owned firms; (4) banking and finance; and (5) restructuring. The emphasis of the paper is on the view that these apparently different dimensions of the transition are actually closely inter-related, with the result that good policies in one area are necessarily highly dependent on progress with the others. Some of these issues turned out to be more difficult and complicated than appeared at the start of transition, but considerable learning has taken place and better policies can now be designed