BPEA | 1996 No. 1

How to Stabilize: Lessons from Post-Communist Countries

discussants: Barry W. Ickes and
Barry W. Ickes Former Brookings Expert
Stanley Fischer
Stanley Fischer Vice Chairman of the Board of Governors of the Federal Reserve System

1996, No. 1

BETWEEN 1989 AND 1991 the collapse of the Soviet bloc brought down the established political system in a number of countries. With the rapid decline of the communist party’s power throughout the region, and particularly following the collapse of the Soviet Union, it proved impossible to maintain an economic system based on hierarchical subordination, predominant state ownership, and a command-rationing allocation mechanism. All previously communist-controlled countries therefore inherited both an economic system that no longer functioned properly and a political struggle for power.