The Forgotten Lands: A Comparative Analysis of Economic Systems in Transition

Abstract

This study focuses on transition economies of the Commonwealth of Independent States (CIS). These countries have lagged considerably in their transformation from a planned to a market-based system and are therefore characterized by the dominance and rigidity of Soviet techniques and underdeveloped financial systems. The author investigates the relationship between the inherent problems in the physical production process of a Soviet-style economy, the underdevelopment of their monetary system, and the disparities in economic structure. This inquiry argues that a successful completion of the transition process is constrained by the prevailing institutional structure and technological organization, both of which require structural reforms aimed to increase growth in national income, productivity, and the degree of export competitiveness. Increasing competitiveness, in turn, requires input reallocation toward more competitive and modern industries, technological innovation with the appropriate institutional framework for its financing, and strategic trade policies.