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Rapid Over Gradual 

There’s a policy study out from Cato entitled, 25 Years of Reforms in Ex-Communist Countries: Fast and Extensive Reforms Led to Higher Growth and More Political Freedom (via pdf Oleh Havrylyshyn, Xiaofan Meng, and Marian L. Tupy, Cato Policy Analysis 795, 7.12.16).

I finished it last night (the paper’s well-written, relatively brief, and persuasive). There’s no local implication, here, needless to say; the results are interesting in themselves. Here’s a bit from the executive summary, with the policy paper immediately following:

The transition from socialism to the market economy produced a divide between those who advocated rapid, or “big-bang” reforms, and those who advocated a gradual approach. More than 25 years have passed since the fall of the Berlin Wall in 1989, providing ample empirical data to test those approaches. Evidence shows that early and rapid reformers by far outperformed gradual reformers, both on economic measures such as GDP per capita and on social indicators such as the United Nations Human Development Index.

A key argument for gradualism was that too-rapid reforms would cause great social pain. In reality, rapid reformers experienced shorter recessions and recovered much earlier than gradual reformers. Indeed a much broader measure of well-being, the Human Development Index, points to the same conclusion: the social costs of transition in rapidly reforming countries were lower….

Download (PDF, 852KB)

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