Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- 1 Development, transition and divergence
- 2 The search for a fundamental and changeable cause of prosperity
- 3 Aspirations and social thought of modernisation
- 4 Development strategy, viability and performance
- 5 Viability and strategies of transition
- 6 Development strategy, development and transition performances: empirical analysis
- 7 Why are east Asian economies so special? Are there any general lessons to be learnt from east Asian development and transition experiences?
- 8 Towards a right development and transition strategy
- Appendix 1 Development strategy and economic institutions in developing countries
- Appendix 2 Data description
- References
- Index
5 - Viability and strategies of transition
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- 1 Development, transition and divergence
- 2 The search for a fundamental and changeable cause of prosperity
- 3 Aspirations and social thought of modernisation
- 4 Development strategy, viability and performance
- 5 Viability and strategies of transition
- 6 Development strategy, development and transition performances: empirical analysis
- 7 Why are east Asian economies so special? Are there any general lessons to be learnt from east Asian development and transition experiences?
- 8 Towards a right development and transition strategy
- Appendix 1 Development strategy and economic institutions in developing countries
- Appendix 2 Data description
- References
- Index
Summary
No matter whether it is a white cat or a black cat, as long as it can catch mice it is a good cat. The way to transit from a traditional planned economy to a market economy is just like crossing a river by groping for the stones beneath the surface.
Deng XiaopingIn a country that adopts a CAD strategy, it is likely that, in the early stages, the economy will enjoy a period of rapid investment-driven growth. As has been observed, however, in Latin America and many other developing and socialist countries, economic growth will inevitably slow down, leading to eventual stagnation and even frequent crises due to the low economic efficiency and consequent depletion of the economic surplus, which is required for investment, arising from the misallocation of resources, suppression of incentives, soft budget constraints and rent-seeking activities.
As predicted by the hypothesis of Schultz (1977) with regard to the interaction of social thinking and situations of economic and social development, the malfunctioning of established institutions in the CAD strategy in turn alters the prevailing social thought about the role of government and of the market in economic development. Since the late 1970s a new form of social thought has arisen: Wiles (1995) has labelled it ‘capitalist triumphalism’ and its policies were encapsulated in the package of ten policy recommendations in the ‘Washington Consensus’ – a term coined by Williamson (1989).
- Type
- Chapter
- Information
- Economic Development and TransitionThought, Strategy, and Viability, pp. 48 - 56Publisher: Cambridge University PressPrint publication year: 2009