KLAUS MÜLLER
Sequence theories of post-communist transformation

The economic and social sciences offer three models for the transformation of (authoritarian) planned economies into (democratic) market economies: 1. the neo-classical model of structural adjustment or shock therapy with rapid opening of external trade and internal liberalisation and privatisation, supported internationally by the Washington financial institutions; 2. the gradualist model which focuses on an active state policy of modernisation; 3. the theory of democracy model, which gives precedence to democratisation over economic reform. The first of these, the neo-classical model, was implemented in Poland, the Czech Republic and Russia. According to its supporters, the more rapid stabilisation of and shorter recession in these countries compared to countries which undertook gradualist reforms are due to this model. The crises in Russia and the Czech Republic, however, are an indication of problems with this strategy. Shock therapy too needs a state which has the capacity to act and which enjoys the confidence of its citizens and economic transactors. The result has been that the models are converging at the level of academic debate and political consultation. Successful reforms require institutional learning and social consensus.