>>> Brad De Long <delong at econ.Berkeley.EDU> 09/15 3:08 PM >>>
>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?
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.