We present in this paper a bench-mark model for the optimal speed of transition from a state-owned to a private market economy, based on the consumption-savings decision in a closed economy. This bench-mark model abstracts from rigidities or frictions to focus on the macroeconomic conditions for...

Pareto-improving economic reforms that also simultaneously achieve efficiency can be implemented through a strategy of ‘dual-track’ liberalization. Its success requires the feasibility of the original plan and its continued enforcement by the state. The Chinese experience demonstrates that...

This paper proposes a model to shed light on two important policy features of privatization in Central and Eastern Europe: the idea of a necessary critical mass of privatization on the one hand, and the difficulties encountered in the actual privatization process on the other, related to the...

This paper adresses the issue of the optimal speed of economy-wide restructuring from a state-owned to a privately-owned economy. The analysis is led from a general equilibrium perspective, focusing on the role of endogenously generated capital accumulation. Sensitivity of the optimal speed of...

This paper trys to clarify the political economy arguments underlying the big bang and the gradualist approach to economic transition. The big bang approach emphasizes the importance of windows of opportunity when ex ante political constraints are less binding, whereas gradualist programmes are...

This paper analyses the tendency for nations to break up as a result of a trade-off between the aggregate efficiency losses from separation and the redistributive gains to the majority, which can occur in all regions, even when there are no transfers across these regions. We show that...