Economic Transition in Central Europe and the CIS Countries by Tomasz Marek Mickiewicz

By Tomasz Marek Mickiewicz

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E. on lobbying for decisions and administrative, The Transition Programme 37 fiscal and financial actions of corresponding decision makers (supporting organizations) to ‘soften’ the budget constraints. The corollary is that the budget constraint is not uniformly ‘soft’ for every firm, as it depends on their lobbying potential. Here, we may focus on the role of social networks. 6 The parallel perspective is that the extent of the ‘soft’ budget will also depend on how attractive it is for the supporting organization (typically the government administration) to intervene to relax the constraints.

We turn now from the nature of the initial disequilibrium to the economic transition. In practice, in all successful reform programmes stabilization and price liberalization were introduced at the same time, and quickly. In areas, where price controls remained (energy), they were adjusted towards world market levels. The major typical exception relates to housing. 3 This is presented below. 3 illustrates consumer choice under initial disequilibrium. 3 The inefficiency of macro stabilization without price liberalization The Transition Programme 33 (y/p2).

Similar figures can be obtained for the steel intensity of GDP (see Winiecki 1987, 2002; Winiecki and Winiecki 1992). The negative economic impact of the growing absorption of energy by the domestic sector was amplified by opportunity costs. A low level of exports to developed market economies combined with the necessity of imports from that area for modernization made the marginal impact of the decrease in exports particularly harmful. 3 Post-Communist economies Income per capita and energy efficiency of production Source: World Bank, World Development.

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