Well, I don't know what the inside scoop on Andrei's personal scandal is. I know that a lot of people in Russia are pretty offended by his having received the award. But then, a lot of them are offended by quite a few things going on over here right now...
I must grant that Andrei has done quite a few interesting things in a number of areas, some of them involving financial markets with you and Summers and Waldmann...
I do share your opinion of his views of government which I find a bit bizarre. Of course I'm not sure whether the scandals in which he is at least peripherally involved, if not more so, provide evidence for his case or not...
With regard to the transition issue I would suggest that things are not quite as clearcut as the "Harvard/IMF consensus" that you basically repeat (and which has been published ad nauseum in the JEP). It certainly is true that if one cooks up some "liberalization index" and then runs a regression of it against per capita GDP growth in the last five years or so over a sample of "transition economies." one gets a significant positive correlation, despite some outliers.
But I would suggest that this is not as simple as it appears and that what may be more important are the details of what is going on. For example, you list the Czech Republic as a great success story. But it has gone into recession after a major flop of its shock therapy program (arguably "just an outlier"). To pick on one crucial element, privatization, it is now pretty clear that rapid privatization is not a good idea and has generally led to very bad outcomes, with Russia and the Czech Republic being prime examples.
Curiously, Poland, which you pose as a highly reformed economy (and it is) has been much slower to privatize. There remains a much larger state-owned sector in Poland than there is in either Russia or the CR (although Poland has pretty much always maintained private ownership in agriculture). In effect, Poland has followed more the model of China, with at best a gradual to non-existent privatization of the large SOEs and most of the private sector development coming from newly established enterprises.
What seems to be much more significant is the removal of state subsidies and the soft budget constraint. This was done in Poland and so the SOEs have had to behave in an efficient manner (leading unfortunately to the high unemployment rate that lies behind the inability of any government in Poland to get itself reelected), whereas the officially privatized firms in Russia and the CR continued to get propped up and have not restructured.
Another problem has to do with data on living standards, with much of it not reflecting accurate PPP measures. Thus you claim that things are not good in Belarus or Ukraine. I would grant that for the latter, but in Belarus prices for many items remain lower and the simple estimates of per capita GDP understate the quality of life, especially also as more of the old social safety net that does not get counted is still in place (free medical care, etc.).
BTW, another element in all this that does not generally get talked about is income distribution, with that having varied more than almost any variable across these economies as transition has proceeded. That is not clearly tied to "degrees of reform" with some highly reformed economies having gotten extremely unequal distributions of income (Estonia, Lithuania) and some less reformed ones also having gotten highly unequal distributions of income (Russia, Ukraine). Likewise some reformed ones still have fairly equal distributions (Slovakia, CR) and also some unreformed ones (Belarus, Romania).
An important element in this may be the degree of corruption that appears to be linked with the degree of inequality of income. That also seems to be linked more broadly with the nature of the transition process above and beyond its measured degree of liberalization. For the crucial and original paper on this, see one by Rosser and Rosser, :-), "Divergent Distributional Dynamics in Transitional Economies," available on my website at http://cob.jmu.edu/rosserjb. Barkley Rosser -----Original Message----- From: Brad De Long <delong at econ.Berkeley.EDU> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com> Date: Sunday, May 02, 1999 11:54 PM Subject: Re: Pinter on NATO "bandits"
>>There is certainly a nasty odor to
>>the whole HIID affair, which Schleifer was at the epicenter of.
>>
>>Even so don't you think it's slightly odd that the AEA says it didn't even
>>discuss the pending investigations of Schleifer on corruption charges
>
>There *is* a grand jury sitting in Boston. But I was unaware that Andrei
>Shleifer was a target of its investigation. Your sources are probably
>better than mine, however...
>
>
>>(This is not, of course, to
>>mention the human misery and official corruption let loose by the Russian
>>privatization schemes Schleifer, Hay and Chubais authored, which the AEA
>>wouldn't be expected to trifle with.)
>
>I would take issue with the claim that Yegor Gaidar and Anatoly Chubais
>"let loose" corruption. I think that the first stage of
>privatization-by-voucher was a good deal less corrupt than the
>privatization-by-managerial-theft which was taking place before (and that
>is still taking place in regions like Belarus and Ukraine which did not do
>mass privatization), and a great deal less corrupt than the Communist
>regime that preceded 1991. To imply that what came before was less corrupt
>than what we have now in Russia seems to me to simply be in error...
>
>At least when I look at east central and east Europe, I see that those
>countries that have reformed the most (the Czech Republic, Poland, Hungary)
>are best off, those that have reformed partly (Slovakia, Russia) are at
>least semi-stable, and those that have reformed least (Ukraine, Belarus)
>are doing worst of all.
>
>That suggests to me that Gaidar's and Chubais's biggest problem was that
>they took office in too weak a position--that they weren't able to do price
>liberalization, privatization, macroeconomic stabilization, and fiscal
>reform in rapid succession; but that instead price liberalization happened
>in 1992, privatization happened in 1994, macroeconomic stabilization in
>1996, and fiscal reform happened not at all. And I think they must dearly
>envy their colleagues in Poland and the Czech Republic (who were able to
>spend Solidarity's and Havel's accumulated political and social capital on
>more rapid reform, with what appear so far at least to be significantly
>better outcomes).
>
>Of course, I'm not an expert on what is optimistically called "transition."
>And from this distance (and without knowing the languages, and without
>immersing myself in the issues for years) I can't tell whether those that
>have done best have done so because they reformed, or whether those that
>have done best have thereby been most able to reform...
>
>
>>
>>I hear from people at Treasury that Larry Summers played a decisive role
in
>>engineering the award for his disciple.
>
>Larry Summers has exceptionally high respect for Andrei Shleifer, and I'm
>sure that he made his opinion of the proper award of the Clark Medal very
>clear. But "decisive"? I hope not. Looking at those others who are reported
>to have gotten votes--Michael Kremer, Bo Honore, Alan Krueger, and Josh
>Angrist--I'm left with the impression that each of them (and I certainly
>wouldn't claim that awarding the Clark Medal to any of them would have been
>a clear mistake) has wowed people in their subfield, but that Andrei
>Shleifer has wowed people in a number of different subfields. In this case
>I think that breadth matters.
>
>And I'm not sure that it is right to think of Andrei Shleifer as Larry
>Summers's "disciple." Larry is at bottom a social democrat, interested in
>rapid economic growth, a substantial amount of redistributive leveling of
>the market-generated income distribution, and an active government that
>does good thing. Andrei by contrast is at bottom a more subtle and
>thoughtful version of Friedrich Hayek, and believes that unless proven
>otherwise you should presume that all governments have the benevolent aims
>and organizational competence of the senile Leonid Brezhnev.
>
>I think these differences in fundamental orientation (the product, I would
>argue, of the difference between growing up in greater Philadelphia in the
>1960s and growing up in greater Moscow in the 1970s) swamp what looks to me
>like a great similarity in analytical style and in attitude toward
>different kinds of evidence (which Andrei Shleifer did indeed learn from
>Larry Summers)...
>
>Brad DeLong
>
>
>