Socialist Economic Transformation: A Critique and Suggestion

Stanley Fischer and Alan Gelb (1991) consider the steps that a socialist command economy should take during the transition to a market economy. They recognize that differences in initial conditions, political considerations and the absence of a validated, dynamic model force economists to fall back on judgment and hunch. Nevertheless, they offer suggestions about a very difficult problem -- how to order the reform process.

Their paper is a welcome start on a complex set of issues. To further the discussion, I will criticize one of their main conclusions and offer a modest proposal to structure analysis of the sequencing of reform that is testable, at least in principle