Gradualism Versus Shock Therapy: (Re)Interpreting the Chinese and Russian Experiences |
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Authors: | Gennadi Kazakevitch Russell Smyth |
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Affiliation: | 1. Economics Department of Monash University , Australia Gennadi.Kazakevitch@BusEco.monash.edu.au;3. Economics Department and Asia Business and Economics Research Unit , Monash University , Australia |
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Abstract: | The concepts of gradualism and shock therapy are reconsidered in respect of the Chinese and Russian experiences. It is suggested that success in reform is determined not only by sharp and speedy measures for attaining macroeconomic financial stabilization, but also, more importantly, how rapidly a critical mass of genuine market forces and competition can be achieved in the microeconomic sphere. In contrast to the orthodox interpretation, it is concluded that the ‘weighted combination’ of macroeconomic and microeconomic reforms in China can be regarded as true ‘shock therapy’, which has brought the Chinese reforms to a successful outcome. In contrast, despite initial macro-financial shock, the Russian reforms have been slow and inconsistent and, for that reason, less successful than in China. |
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Keywords: | China Russia gradualism shock therapy ownership privatization |
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