A Transition from Centrally Planned Economy to Market Economy

The impact of transition from central planning to
market economy is investigated in the context of the
Bulgarian economy and in comparison with other
Central and Eastern European countries. We focus on
two particular aspects: the restructuring and
development of the banking sector and the economic
and non-economic costs of the transition. The
comparison between transitional countries suggests
that the pace of the reforms can be viewed as the
major characteristic of the transition. It is found
that the pace determines the success and slow reform
periods actually consist of a mixture of shorter
periods of rapid reforms and of stalled reforms. The
impact of the transition is measured in two
different ways: on the economy as a whole, and on
its people. A method to measure these costs is
proposed and employed to compute the transition
costs for Bulgaria and some other transition
countries. By this means it is possible to identify
the beginning as well as the end of transition,
in each of the countries. We find that the slow
reforming countries have incurred greater transition
costs, while more rapid reformers have had to pay
less to complete the transition.

Autorentext

Iliyan holds MA and MBA (Varna University of Economics, Bulgaria) and a PhD in Economics (University of Dundee, Scotland). He had taught Economics at Varna University of Economics and Veliko Turnovo University. Iliyan had served as Councillor of the Veliko Turnovo City Council and CEO of two-state-owned companies and a cooperative bank.

Klappentext

The impact of transition from central planning to market economy is investigated in the context of the Bulgarian economy and in comparison with other Central and Eastern European countries. We focus on two particular aspects: the restructuring and development of the banking sector and the economic and non-economic costs of the transition. The comparison between transitional countries suggests that the pace of the reforms can be viewed as the major characteristic of the transition. It is found that the pace determines the success and slow reform periods actually consist of a mixture of shorter periods of rapid reforms and of stalled reforms. The impact of the transition is measured in two different ways: on the economy as a whole, and on its people. A method to measure these costs is proposed and employed to compute the transition costs for Bulgaria and some other transition countries. By this means it is possible to identify the 'beginning' as well as the 'end' of transition, in each of the countries. We find that the slow reforming countries have incurred greater transition costs, while more rapid reformers have had to pay less to complete the transition.