Inflation and the transition to a mixed economy: Can it work?

This paper reviews a number of possible scenarios for introducing a market element into a centrally planned economy, and analyses the financial relationships between the planned and the market sectors of the resulting mixed economy. It is argued that repressed inflation with some degree of excess demand and administrative price-control, is not neutral, but has distribution effects which greatly ameliorate the financial position of the state in a mixed economy in which the banking sector is still part of the state-controlled sector.     

From plan to market: financial statements and economic transition in the East German enterprise

This article examines the changing role of financial accounting in the former East Germany as that country underwent the transition from a centrally planned to a market-driven economy. The German government's insistence on a sales model of privatization in preference to some form of mass privatization, combined with legal requirements to make up equity shortfalls in eastern German enterprises, resulted in a highly centralized and interventionist approach to accounting change. The article reviews and analyses the historical, technical, economic and political aspects of this change process.     

Privatization And Economic Restructuring in Poland: An Assessment of Transition Policies

A bstract . Poland was among the first of the Central European countries to attempt to transform its economy from a centrally planned socialist system to a market-oriented one. Although its International Monetary Fund-inspired "shock therapy" approach sought to transform the economy quickly, Poland's implementation of privatization of state enterprises , a keystone of the reform strategy, lags seriously behind other economic changes. Poland's experiments with privatization were derailed by economic, political, social and administrative problems. The lessons of experience from Poland's transitional period during the early 1990s are that the development of small- and medium-sized enterprises and the spread of entrepreneurial activity were far more important than privatization of state enterprises in moving Poland toward a market system.     

Uncertainty, the structure of production and the pattern of trade of centrally planned economies

Conclusions In this paper we have demonstrated that terms of trade uncertainty imposes a welfare loss on a centrally planned economy by reallocating resources toward the production of import substitutes and domestic consumption of exportables and a consequent decrease in the volume of trade. We have also shown that the centrally planned economies have developed a number of institutions, such as trade agreements and pricing rules, designed to minimize the losses caused by terms of trade uncertainty. Finally, we have suggested that the behavior of these economies during the post-Warperiod is consistent with welfare maximization under terms of trade uncertainty.I am indebted to Edward A. Hewett and Paul N. Rappoport for their assistance and comments at various stages of my work on this paper. Any errors and all opinions are entirely my responsibility.     

On the role of government in a stochastically growing open economy

The relationship between the size of government, economic growth, and volatility in a small open economy is analyzed. First, we characterize the stochastic equilibrium for a centrally planned economy, contrasting it with a closed economy. The role of government consumption expenditure both as a stabilizing and a destabilizing factor is discussed. The optimal size of government is derived and we find that an open economy will have a larger government if and only if it is a net creditor. Second, the stochastic equilibrium in a decentralized economy is characterized and the optimal tax structure derived. Finally, the role of government production expenditure and its impact on risk is briefly discussed.     

Price distortion in the transition process: A CGE analysis of China's case

The correct evaluation of price distortion is a prerequisite for designing the correct price reform policy which is of tremendous importance in the transitions process from a centrally planned economy to a market economy. The purpose of this paper is to investigate the advantages and shortcomings of various criteria for evaluating price distortion. Based on the characteristics of a two-tiered planned-market system in Chinese economic reform, a computable general equilibrium (CGE) model has been built to evaluate quantitatively the degree of price distortion in the prevailing price system and the effects of price adjustments in order to propose a reasonable price reform policy. The difference between the planned price and the equilibrium price seems to be a better indicator for evaluating the degree of price distortion than others. Furthermore, this difference provides more accurate feedback for price reform policies in order to ensure a stable and controllable price reform process.     

THE ECONOMIC PERFORMANCE AND REGIONAL SYSTEMS OF CHINA'S CITIES*

Employing cluster analysis of selected economic indicators, this paper classifies Chinese cities into various levels according to their total urban economic strength and per capita economic performance. Regional characteristics of China's urban system are identified and policy-related measures for improving the economic efficiency of Chinese cities are suggested. In general, China''s urban economy appears to be undergoing a transition from a centrally planned economy into a market-oriented one, particularly in cities along the coast and the lower reaches of the Yangzi valley.     

The price-wage inflationary spiral in Poland

In this paper the problem of price-wage relationship modelling in the case of a mixed economy is addressed. The empirical investigation was based on Polish annual data for the period of a centrally planned system (1964–1989) and on quarterly data for the period of transition towards a market economy (1990.1–1990.3). The traditional approach proved to be inappropriate because of the variables' nonstationarity. Identification of long-run behaviour was attempted by applying the two-step Engle-Granger's, or alternatively, Johansen's maximum likelihood (ML) procedures. The ML estimator provided better estimates of cointegration vectors and, even more important, allowed as many as three to be found.The main conclusion which can be drawn from the empirical findings is that three variables: price index, average wages and labour productivity, form a multi-dimensional equilibrium space. This property of the described phenomena needs to be taken into serious account when building macroeconometric models explaining the behaviour of the Polish economy.The existence of these three cointegration vectors is troublesome because of unusual problems of interpretation. However, if it is not as a result of misspecification and/or small sample bias, it proves that much remains to be learned about the price-wage mechanisms functioning in economies having a mixed character.     

Supply multipliers in a centrally planned economy with a private sector

A simple model of a centrally planned economy is developed with a state sector and private sector, and with a supply constraint affecting state sector output. In such a model, a supply multiplier can be derived under the same conditions which would make an increase in state sector prices an effective means of reducing shortage. Moreover, a one-sector constrained equilibrium model of the state sector does not yield misleading results by ignoring the private sector; and the private sector price level is a reliable indicator of shortage in the economy.This paper was written while I was a visitor at the European University Institute, Badia Fiesolana, Florence. I am grateful to Mario Nuti for participating in the discussions which stimulated the paper and to the Institute itself for the facilities provided.Comments from Geoff Wyatt enabled me to make some useful improvement to the paper.     

The transfer of HRM policies and practices to a transitional business system: the case of performance management practices in the US and Japanese MNEs operating in Vietnam

This paper focuses on employee performance management (PM) to explore how multinational enterprises (MNEs) localise their human resources within their subsidiaries in a developing country. It uses qualitative research methods to examine four US and four Japanese MNEs operating in Vietnam. The paper identifies both home and host country effects as significant factors in the transfer of MNEs' PM policies and practices. The US firms emphasised financial and non-financial measurements and utilised a wide range of PM management tools and techniques. These techniques, despite being unfamiliar in Vietnam and possibly considered incompatible with Vietnamese culture, were transferred successfully to the Vietnamese subsidiaries. The Japanese firms' PM approach was characterised by a more informal form of regular performance review, within a strictly top-down process and which suffered from accusations of bias and lack of transparency by Vietnamese respondents. This paper argues that the transitional period in Vietnam from a centrally planned economy to a market-oriented one has made the national business system more receptive to new and seemingly contrasting practices. It provides no evidence to support the argument that transfer of practices is more likely, where the cultures of the countries involved are relatively similar.     

Wage and Price Inflation in Poland in the Period of Transition: The Cointegration Analysis

The paper focuses on the long run relationships between wages, prices and labour productivity in the Polish economy by applying recent developments in the field of multivariate cointegration analysis. We followed modeling strategy which is suggested by Greenslade et al. (1999) and present all stages of the analysis which leads to the fully economically identified system of equations representing long run relationships. The investigation is based on the quarterly data from 1992.1 to 1999.2 which covers the period of transition of the Polish economy from the centrally planned system towards the market one. Basing on the empirical results we can argue that wages (costs) were one of the main forces driving inflation in Poland during that period. Also labor productivity proved to be stimulated by the increase of the real wages. On the other hand the hypothesis concerning the relationship between wages and unemployment was rejected by the data.     

Exploring a Regional Technical Efficiency Frontier in the Former USSR

Using 1971–90 panel data from a Siberian province, two econometric methods are used side by side to examine technical inefficiency with a suggestion as to how the methods might be used in sequence. Estimates derived from a random effects method reveal that technical inefficiency is both substantial and not time invariant. Results using either a random or fixed effects method suggest that existing estimates of technical inefficiency in centrally planned economies may be biased downward because of the choice of the estimation method. Using either method, the increasing technical inefficiency found is likely to be one cause of the decline in the performance of centrally planned economies and their regions.     

The productivity effects of employee ownership within command economies: Evidence from Poland

The effects of employee ownership, broadly defined, are estimated for a sample of Polish producer co-operatives in three industries during 1976-8, i.e. when Poland was a centrally planned economy. The results indicate that, in general, increasing either worker participation in control and/or in economic returns provides positive effects on productivity. The pattern of the different effects of employee ownership varies significantly across sectors. This new evidence strongly suggests that workers within Soviet-type economies are responsive to economic incentives. Together with existing theoretical and empirical evidence for both Eastern and Western European firms, the findings suggest a larger role for employee ownership than typically either currently exists or that is under serious consideration in most restructuring economies.     

Soviet discussion on enterprise incentives and methods of planning

For some years a discussion has been in progress among economists in the Soviet Union on methods of securing the active and positive participation of individual enterprises in a centrally planned economy. The main theme of discussion has been the problem: how to arrange the system of plan indices, prices, enterprise bonuses, etc. to encourage enterprise interest in higher plan assignments, introduction of new technology, and improvement of quality of output. On the following pages some excerpts from this debate are reproduced. However, since the problems discussed are now engaging also the Soviet political authorities, let us first quote a few sections from one of the many official statements made in this connection. The one we have chosen is from the report given by the Soviet Prime Minister N. S. Khrushchev at the CPSU Central Committee Plenary Meeting of November 19, 1962 (Pravda, November 20).     

EFFECTS OF LABOR REALLOCATION ON PRODUCTIVITY AND INEQUALITY—INSIGHTS FROM STUDIES ON TRANSITION

From a theoretical perspective, the link between the speed and scope of rapid labor reallocation and productivity growth or income inequality is ambiguous. Do reallocations with more flows tend to produce higher productivity growth? Does such a link appear at the expense of higher income inequality? We explore the rich evidence from earlier studies on worker flows in the period of massive and rapid labor reallocation, that is, the economic transition from a centrally planned to a market-oriented economy in CEE. We have collected over 450 estimates of job flows from the literature and used these inputs to estimate the short-run and long-run relationship between labor market flows, labor productivity, and income inequality. We apply the tools typical for a meta-analysis to verify the empirical regularities between labor flows and productivity growth as well as income inequality. Our findings suggest only weak and short-term links with productivity, driven predominantly by business cycles. However, data reveal a strong pattern for income inequality in the short run—more churning during reallocation is associated with a level effect toward increased Gini indices.     

浅谈法学教育改革与探索

我国长期实行计划经济体制,许多法律、法规仍然是为适应计划经济而制定的,没有体现市场经济体制中的市场调节和竞争机制,与规则相悖;已有的有关市场经济的立法也不够完善,特别是对我国法律和法学教育改革尤为重要和迫切。     

Economic Sector Stabilization

Using a dynamic competitive disequilibrium model this paper determined that centrally directed sector resource stabilization or planning probably could not shorten the time for a developed economy to reach equilibrium. This is due to the disaggregation of data available centrally, an old concern. Therefore, the old issues of freedom and corruption under planning appear moot.     

The role of interest rates during the transition to a market economy

We construct a simple two period model of an economy in transition from being centrally planned to being market oriented. Using this model, we draw certain positive conclusions about economic policies that reduce distortions during the transition period. In particular, we focus on the role of interest rates, a market parameter that has previously been almost entirely ignored in planned economies. Using stylized data derived from Czechoslovakia, we show that increase in nominal interest rates can actually be welfare-improving by partially compensating for the distortions induced by the transition process.The model is sufficiently general to be applied to a number of transition economies, and we use the cases of Czechoslovakia, the USSR, and China as examples of some of the phenomena that we are trying to explain. We show that the model generates a constrained, suboptimal equilibrium. In particular, we see that raising interest rates during the transition period reduces repressed savings, brought about by shortages in the controlled market. An improvement in consumer utility can therefore be brought about.A large part of the work in this paper was carried out while I was a Visiting Scholar in the Research Department of the International Monetary Fund. I would like to thank Mario Blejer, Nadeem Ul-Haque, and Sweder Van Wijnbergen for helpful comments. The views expressed here do not necessarily represent the opinions of the International Monetary Fund.     

超大型工程项目管理实证研究

三峡工程是在我国从计划向市场经济转变且即将加入WTO的特殊背景下建设的跨世纪的超大型水利工程,其项目管理具有很多独特之处。本文从项目管理目标、内容与任务、项目管理体制与机制、项目管理模式、项目管理团队精神、项目管理方法与手段、项目技术管理决策体系、项目物资设备管理、项目财务管理等方面对三峡工程项目管理特色进行了系统总结和专题研究。