Strategies for a Viable Transition: Lessons from the Political Economy of Renewal

The poor economic performance and the resulting political instability of the post-socialist countries have stemmed from copying the wrong capitalist model - voluntarily or otherwise. Until they learn from both their own past and the experience of successful late-industrialisers and piece together their own sensible policies, specifically geared to their current status, their efforts to restructure and to make a transition to a market economy will continue to sputter. This report is a collaborative effort which represents an agreed upon core of analysis that differs sharply and systematically from both the received wisdom of the so-called 'Washington Consensus' and the economic policies of the Russian government in the period from 1990 to 1995. Our goal is to provide a point of departure for an innovative economic policy that can both lift the Russian economy out of its current depressed state and at the same time be socially and politically viable. Only a drastically different approach has any hope of allowing democratically and economically successful renewal to begin from among the ruins created by past policies.