How to Stabilize: Lessons from Post-Communist Countries

Anders Åslund,

AÅ

Anders Åslund

Peter Boone, and

PB

Peter Boone London School of Economics

Simon Johnson

SJ

Simon Johnson International Monetary Fund

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

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.