The Economics of Transition, vol. 11(1), 2003 Mar, pp. 3-23
Professor of Economics
Head, Forum Macro of Israel
Bar-Ilan University, Israel
Brezis, E. S., & Schnytzer, A. (2003). Why are the transition paths in China and Eastern Europe different? The Economics of Transition, 11(1), 3–23.
Brezis, Elise S., and Adi Schnytzer. “Why Are the Transition Paths in China and Eastern Europe Different?” The Economics of Transition 11, no. 1 (March 2003): 3–23.
Brezis, Elise S., and Adi Schnytzer. “Why Are the Transition Paths in China and Eastern Europe Different?” The Economics of Transition, vol. 11, no. 1, Mar. 2003, pp. 3–23.
The purpose of this paper is to provide a framework linking communist regime collapse and privatizing economic reforms. The framework permits us to explain why certain communist regimes lost their monopoly of political power while others have not. We show that the essential difference between those communist regimes which survived economic reform and those which did not, lies in the nature of the privatization reform introduced by the communist leadership. The privatization that we call ‘Market-Leninist’, was implemented in China and Vietnam while the second type of privatization, termed ‘Embezzlement for a rainy day’ was the type of privatization implemented in Eastern Europe. We show, in the context of a game between rulers and the population, that the size of the repressive apparatus is the key element determining the type of privatization chosen by the rulers.
Keywords: communism, privatization, repression, transition, Eastern Europe, China