Has Jeffrey Sachs changed his tune...

[Brad De Long]

>1) "As fast as *possible*" is a very qualified degree of fastness.  For many,
>"shock therapy" represents instituting reforms, etc. that are inappopriate and
>damaging because they are "faster than possible" i.e, too much too fast, too
>soon.  Of course, there are also the issues of the substance of the very
>reforms themselves and the goals to be achieved, etc.
>
>2) The other approach to transition being "gradualism" how do you compare the
>results of say Russia vs. China, Brad?
>
>Mat

With China you start with an enormous peasant economy. You can free the
serfs, let them choose their occupations, and watch as petty-bourgeois
capitalism gets started in the countryside. The modern industrial economy
then grows up around the state sector, and (as long as the government
continues to collect taxes) the state sector can still keep its employment
and production going with mammoth government subsidies.

Yegor Gaidar once said that if he could have followed the Chinese route he
would have, but that Russian agriculture was too industrialized and too
mechanized for it to have been possible to privatize it immediately while
still keeping the rest of the economy under state control...

As far as Russia vs. China, the Russian economy is a basket case--but
Russia is (still) a democracy, and that is a very valuable accomplishment.
The news from China will (probably) be much better than the news from
Russia for the next decade, but as long as the Russians keep holding
elections the longer-term outlook is still up for grabs.

Brad DeLong