{"title":"A new institutional approach to the study of the Soviet-type economy","authors":"T. Todorova, Aleksandar Vasilev","doi":"10.47743/ejes-2022-0114","DOIUrl":null,"url":null,"abstract":"The paper analyses the transaction cost of economizing and efficiency-enhancing effects of the Soviet-type economy. The last 30 years of transition have seen the failure of market reforms in many industries in what are traditionally non-market economies. We argue that centralized, command-and-control systems are wealth maximizing in the conditions of persistent transactional and behavioural failures. With its centralism, strict hierarchy, and monopoly over information, the Soviet-type economy was able to produce significant output. We emphasize the role of centralism in coordinating economic activities, curbing opportunism, and facilitating information flow. In highly opportunistic societies where the transaction costs of market operation are significant, centralized systems are more efficient than decentralized, democratic systems based on free-market rules.","PeriodicalId":43713,"journal":{"name":"Eastern Journal of European Studies","volume":null,"pages":null},"PeriodicalIF":0.7000,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Eastern Journal of European Studies","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.47743/ejes-2022-0114","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"AREA STUDIES","Score":null,"Total":0}
引用次数: 0
Abstract
The paper analyses the transaction cost of economizing and efficiency-enhancing effects of the Soviet-type economy. The last 30 years of transition have seen the failure of market reforms in many industries in what are traditionally non-market economies. We argue that centralized, command-and-control systems are wealth maximizing in the conditions of persistent transactional and behavioural failures. With its centralism, strict hierarchy, and monopoly over information, the Soviet-type economy was able to produce significant output. We emphasize the role of centralism in coordinating economic activities, curbing opportunism, and facilitating information flow. In highly opportunistic societies where the transaction costs of market operation are significant, centralized systems are more efficient than decentralized, democratic systems based on free-market rules.
期刊介绍:
The Eastern Journal of European Studies (EJES) seeks to provide a forum for multidisciplinary and interdisciplinary dialogue between ideas, and a framework for theoretical and empirical analyses covering major topics in European studies: European history, politics, European economy and European policies, EU community law, European culture and society. EJES encourages studies focusing on Central and Eastern Europe (including Eastern Neighbourhood) in order to better understand its transformations induced by the integration process and to address its specific challenges by supporting scientific debates on the general European theory and practice. Furthermore, the editorial board regularly invites distinguished guest editors to coordinate thematic issues.