Economic Reforms and Constitutional Transition

Jeffrey D. Sachs, Wing Woo and Xiaokai Yang

CID Working Papers from Center for International Development at Harvard University

Abstract: 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.

Keywords: constitutional transition; economic reform; division of labor; debate of shock therapy vs gradualism; debate of convergence vs institutional innovation (search for similar items in EconPapers)
JEL-codes: B14 H1 K1 M40 O10 P20 (search for similar items in EconPapers)
Date: 2000-04
New Economics Papers: this item is included in nep-law
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Citations: View citations in EconPapers (17)

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Journal Article: Economic Reforms and Constitutional Transition (2000)
Working Paper: Economic Reforms and Constitutional Transition (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:wop:cidhav:43

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