StudentShare solutions
Triangle menu

Economic Transition from Centrally Planned to Market Economy - Essay Example

Not dowloaded yet

Extract of sample
Economic Transition from Centrally Planned to Market Economy

These are countries such as Russia, Ukraine, Baltic Republics, Belarus, Georgia, Kazakhstan, etc. These former Soviet Union (FSU) countries had the biggest challenge.
The FSU countries had all been centrally controlled from Moscow. The removal of that control left them with a vacuum at the top. Camdessus (1994) observes that "the old structures of planning and control were disintegrating, creating conditions of economic and political crisis." They had to build administrative capacity and also take control of companies that were also controlled from Moscow. The challenge these countries faced was of a political transition from communism to democracy which was happening at the same time with economic transition.
Their first challenge was to have a currency of their own and start formulating their monetary and fiscal policies. The currency had to be stabilized and be made convertible. They inherited weak inefficient industries surviving on subsidies. It was important to ensure that while price controls are removed inflation does not get out of hand. Programs to revive industrial production had to be in place to ensure that the economy would begin to function. Inevitably inflation soared in all these countries due to collapse of production and lack of resources to import commodities. ...Show more

Summary

The collapse of the Soviet Union in 1991 had serious repercussions for countries in Eastern and Central Europe. For many years these countries had been under the influence of Soviet economy. Under communism economic activity was centrally planned but now there were being forced to change to market economy over-night.
Author : carlotta91
Economic Transition from Centrally Planned to Market Economy essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Economic Transition from Centrally Planned to Market Economy"
with a personal 20% discount.
Grab the best paper

Related Essays

Economic Transition
Saudi Arabia is currently a welfare state with a command economy and monarchial governmental system. However, over the past couple of decades, due to various reasons, the economic system of the country is moving from a public sector dominated, command economy, closed and oil export based economy to an economy where the public sector is taking an active role.
2 pages (500 words) Essay
To What Extent Was the Effectiveness of Transition Strategies Dependent on the Initial Conditions of the Transition Economies
From an overarching context the research established the understanding that there has undeniably been significant differences between the successes of transition strategies in certain countries. The research has then argued that the two major pre-liberalization factors that impact transition strategies are the countries’ macroeconomic state and the extent that steps were taken to achieve greater levels of privatization during the period of central control.
7 pages (1750 words) Essay
Chinas Transition to a Market-oriented Economy
This essay highlights major economic issues in China, that impedes the successful transformation of the economy to a market oriented model. The transition continues to feature lack of political liberalization. The present nature of economy is deemed unsustainable as the economic liberalization and unchanged state of politics cannot co-exist.
3 pages (750 words) Essay
The Main Problems which Eastern/Central European Countries Have
In this paper the countries under examination are divided into three categories: former Soviet Union (FSU) countries, Central European and the Balkan countries. Each group had faced different economic challenges, as some of them were an active members of the Soviet Union, while others were under a different level of influence from the Union.
6 pages (1500 words) Essay
Assignment 6: Transition Processes
Two such economies are compared, namely China and Russia, the former being located in Asia and the latter (partially) in East Europe. The focus is on the characteristics of both transition processes, and this is followed by a discussion of
3 pages (750 words) Essay
To what extent was the effectiveness of transition strategies dependent on the initial conditions of the transition economies
Within this context of understanding one recognizes that a central area of concern has been transition economies. Transition economies are those where a nation is shifting from a centrally planned economy to a free market. Within the modern world environment this has become a
8 pages (2000 words) Essay
The transition from a centrally planned economy to a free market or a mixed economy involves state owned enterprises being privatised. But economists debate as to whether this is actually beneficial to the countrys economy
Most of the world’s economies that were previously planned economies have initiated a transition to become free or at least mixed economies. Russia and China are among the
6 pages (1500 words) Essay
The transition from a centrally planned economy to a free market involves state owned enterprises being privatized. But economists debate this is actually beneficial to the country's economy. Discuss this statement from experience of China and Russia
These enterprises operate like other enterprises and their annual earnings become directed to the government to aid in financing government-sponsored projects. The enterprises might be owned fully by the government or partially, however, only
7 pages (1750 words) Essay
The transition from a centrally planned economy to a free market or a mixed economy (Russia and China)
Applied to an economy, perfect competitive economy would refer to a free market where there would be existence of the private enterprises and the price would be determined in the economy by the demand and supply in each of the markets. There would be no intervention on part of the government to control the prices or the quantities in the market. A monopoly market is one in which there is a single seller who would have the entire market power and hence the buyers in the market would be the price takers and would have to pay the monopolist-set price in order to purchase the product.
3 pages (750 words) Essay
The transition from a centrally planned economy to a free market or a mixed economy involves state owned enterprises being privatised. But economists debate as to whether this is actually beneficial to the countrys economy
But on the other hand, there are those who feel that planned economies are suitable for some countries. For example, the Marxism-Leninism approaches (Tadora &
6 pages (1500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT