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7 What Can Countries Embarking on Post-Socialist Transformation Learn from the Experiences So Far?* Introduction Table 1 in my book The Socialist System (Kornai 1992b) lists 26 countries where the “socialist system” was operating at the end of the 1980s.1 The first two columns of the table at the end of this paper, Table 7.1, repeat the relevant data, listing the same 26 then-Communist countries. Columns 3 and 4 show an important difference, however. Three formerly unitary countries (Czechoslovakia, the Soviet Union, and Yugoslavia) have since been divided into a number of successor states. Several other essential changes have also taken place in the Communist world. When I was writing the book just mentioned, I used a political criterion to decide whether a country had a Communist system . The term is applicable to a country for as long and only for as long as a monopoly of political power is retained there by a Communist party professing a Marxist-Leninist ideology. That was the case with the political structure of all 26 countries at that time (Column 7). The 151 * [Prepared for the Cuba Transition Project (CTP), Institute for Cuban and CubanAmerican Studies, University of Miami. This publication was made possible through support provided by the Bureau for Latin America and the Caribbean, U.S. Agency for International Development, under the terms of Award No. EDG–A–00–02–00007–00. The opinions expressed herein are those of the author and do not necessarily reflect the views of the U.S. Agency for International Development. I am grateful to Brian McLean for the excellent translation, to Julia Parti and Kathleen Hamman for the careful editing of the text, and to János Varga for his devoted research assistance.] 1 Kornai 1992b, pp. 6–7. The book treats the expressions “socialist system” and “communist system” as synonymous. term “Communist” can be applied at this time to only five countries: China, Vietnam, Laos, North Korea, and Cuba. With the exception of North Korea and Cuba, all the countries that formerly belonged to the Communist system have undergone radical transformations in their economies. While economic changes have occurred in many dimensions, let us confine ourselves for a moment to one: the reallocation of property rights. Column 8 of Table 7.1 shows that the economy of the whole former Communist region, with the exception of North Korea and Cuba, has moved much closer to that of market economies dominated by private ownership.2 This change has been very strong in China and Vietnam, even though both are still run by communist parties. It is doubtful whether the Communist parties of these two countries have remained real MarxistLeninist parties at all, for they have hardly retained their old ideology except in their rhetoric. Looking at the actions of the governing party in China and Vietnam, it can be seen that they wear a Communist guise, but they are actually friendly toward capitalism and actively engaged in implanting it.3 Although the political regimes in China and Vietnam remain dictatorial, the actual behavior of the political authorities seems likely to move toward pro-capitalism. So it is also correct to say that both countries have shifted away from socialism toward post-socialist transition.4 In a decade and a half, a transformation of importance in worldhistory terms has occurred in the former Communist world, affecting one-third of the world’s population. Are there lessons and remarkable experiences to be drawn from that transformation of the former communist world for other countries? My reply is a decided yes. This study advances some ideas to support that affirmative answer. My arguments are not based on theoretical speculation, for I have gained first-hand experience in my own country, Hungary. Hungary’s 152 S T U D Y 7 2 Unfortunately, data on the share of the private sector in a subset of countries are missing . According to the impressions gained by experts, the role of the private sector became significantly larger in those countries as well. 3 It is another matter that they still rule dictatorially and repress political freedoms, for in that they are not alone. There have been and remain elsewhere many pro-capitalist, antisocialist parties that enjoy a political monopoly and seek to retain it at all cost. [On this, see the Appendix to Study 6, pp. 147–50.] 4 “Post-socialist transformation” has been defined in several ways by different authors. A question to ask here concerns their...

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