DP943 The Role of Political Constraints in Transition Strategies
|Publication Date:||April 1994|
|Keyword(s):||Eastern Europe, Political Economy, Sequencing, Transition|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=943|
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 defended because of their higher ex ante political feasibility. Both approaches aim at achieving irreversibility, but through different means. The big bang approach emphasizes how speed in reforms may constrain a successor government, whereas the gradualist approach tries to design the sequencing of reforms so as to build, at each stage of transition, constituencies for further reform.