Economic Reforms and Constitutional Transition

Sachs, Jeffrey D.; Woo, Wing Thye; Yang, Xiaokai

This paper investigates the relationship between economic reforms and constitutional transition, which has been neglected by many transition economists. It is argued that assessment of reform performance might be very misleading if it is not recognized that economic reforms are just a small part of large scale of constitutional transition. Rivalry and competition between states and between political forces within each country are the driving forces for constitutional transition. We use Russia as an example of economic reforms associated with constitutional transition and China as an example of economic reforms in the absence of constitutional transition to examine features and problems in the two patterns of transition. It is concluded that under political monopoly of the ruling party, economic transition will be hijacked by state opportunism. Dual track approach to economic transition may generate very high long-term cost of constitutional transition that might well outweigh its short-term benefit of buying out the vested interests.


More About This Work

Academic Units
Earth Institute
Center for International Development at Harvard University
CID Working Paper, 43
Published Here
September 25, 2009


Published in Annals of Economics and Finance, vol. 1, no. 2 (November 2000), pp. 423-479.