The reforms initiated in Central and Eastern European countries imply dramatic changes at social, economic and political level. The transition from a centrally planned to a market–based economic system requires profound reformation of all economic and social institutions, amongst them, in prominent place, the way social benefits are provided and financed. Social programs in these countries are challenged from two sides: Firstly, they have to provide a social safety net for the most vulnerable in society during economic transition in order to support the reform program in social and political terms; secondly, social programs have to be restructured in order to be financially sound, socially equitable and economically efficient in a more (or fully) market-oriented environment.

Past discussions of market versus planned economies in terms of the efficiency/equity tradeoff missed the adverse equity implications of totalitarian political systems and the importance of pluralistic political decisionmaking structures. The paper demonstrates the role of the paternalistic party–state in creating nonmarket inequities, limiting the articulation of political preferences concerning social safety nets, and restricting nonstate sources of welfare. The transition to pluralistic market economies implies potential improvements both in equity and efficiency. The distinct problems of the transition are primarily rooted in uncertainties arising from the scarcity of resources and the fluidity of political preferences.

The concept of regulatory capture is multidimensional according to data from Australian nursing home inspectors. There are three empirically distinct forms of capture: identification with the industry, sympathy with the particular problems that regulated firms confront in meeting standards, and absence of toughness. Inspectors who have prior senior management experience in the industry tend to be less tough in their attitudes to regulatory enforcement. For the other two types of capture, it is not coming in the revolving door (from an industry job), but aspirations to go out of the revolving door (to an industry job) that predicts capture. Captured regulatory attitudes and revolving door variables have little power, however, in explaining the toughness of actual enforcement practices. We do find that over time tougher inspectors are more likely to leave the regulatory agency than softer inspectors. These data are used to inform a policy analysis of capture and corruption. It is concluded that there is limited analytical merit in a conception of capture as an enduring unitary character trait that is structurally determined by a history of interest group affiliations. Capture, we attempt to show, is instead a situational problem that requires situational solutions. Constraining the free movement of the revolving door by restricting regulatory appointments from or to the regulated industry is an example of a flawed policy grounded in an overdrawn structural determinism.

Economists could profitably treat academic publishing as a lagging economic indicator. Just as the Tokyo stock market hit its peak in late 1989, books on Japan's economic sucess began to pour off the presses; they still thrive today despite the fact that in the intervening three years, the Tokyo market has dropped over 50 per cent. In a like manner, academics are suddenly blessed with a plethora of studies of the countries presumably following in Japan's successful economic wake - the new Asian NICs of South Korea, Taiwan, Hong Kong and Singapore; plus the potential 'next NICs', Thailand, Malaysia and Indonesia - just at the time that the world's investors are liquidating their holdings in these rather stagnant Asian markets and pouring them into the suddenly thriving economies of Argentina, Chile, Mexico and Brazil. Fortunately for scholars, the dividends paid by good books are less affected by the transitory events that create such wild swings in the equities markets. Good scholarship, like blue chip stock, generates high dividends regardless of the short-term performance of the ephemeral economic markets.