The market economy and its formation in the modern world is a very complex issue, since it is necessary to completely transform and change the system that has developed over many decades. But it is impossible to quickly change all this, to form an updated worldview of economic entities, to create a regulatory and legal framework. The transitional economy is a stage of development, reform and transformation. It always takes a long time, during which the economic system will be a mixture of elements of the modern market and administrative-command. These are developmental changes, not established functioning.
Key Features
A transitional economy is always volatility and instability, which are "irrevocable" in nature. This not only breaks the stability of the system so that it can then return to equilibrium, but significantly weakens it. The transitional economy must irreversibly lead to some other, more stable,economic system. This instability causes irreversibility and special dynamism of development. However, the growth of uncertainty, the mixing of new and old are always contradictions. In the socio-political sphere, this leads to an aggravation of contradictions and social upheavals.
Historicity as a characteristic
It is the historical pattern that is an important feature of any country with a transitional economy, a list of which can be found at the end of the article. The Eastern European states that were previously part of the Soviet Union, now independent, faced problems that are an order of magnitude more difficult than those of Latin American countries, since quite developed market institutions existed in many places in Latin America. Accordingly, the number of privatized enterprises was not in the thousands, but in the hundreds. Features of the transitional economy - different forms of its manifestation in different conditions. All this should be taken into account by governments when developing plans for reforming economic systems.
Features of functioning: inertia
Countries with economies in transition have many characteristics. The first and most important is the continuity (inertia) of reproductive processes, which exclude the possibility of quickly replacing existing economic forms with other, more desirable ones. It is thanks to the inertia of reproduction that the old economic relations and forms persist for a long time.
Increased intensity
A transitional economy is always a very stressful period. Its another key feature is the very rapid and intensive development of new relations between market entities. The irreversibility of evolution accelerates the implementation of many reforms. The transition economy is doomed to success and accelerate its transition processes if the reforms are not arbitrary, but based on natural evolution and a well-balanced system of actions.
Local type
There are different types of transition economies, which differ in the nature of the ongoing processes and their scale. Local is characterized by the fact that the transition state is visible on the scale of a single region. It is based on the features and uneven development of different regions. The local transitional economy is the embodiment of the unity of the general, the special. In a different form, this form developed in the UK, Germany and France.
Global type
This is a single process of many changes within the framework of the entire civilization (Western and Eastern), the world economy. Initially, such movements are provoked by developed countries with economies in transition. The trends that arise in this case affect the development of already mega-economic processes.
Evolutionarily natural type
This type is distinguished by the nature of the flow of transient processes in the global plan. However, local transitional economies can also be formed under the influence of natural evolution. In general, all types of transition economies are subject to the lawnatural evolution.
Evolutionary reform type
This kind of transitional market economy is the connection of various transformational processes with social reform programs. However, the laws of the course of evolution are completely preserved in this case. This type tries to accelerate it involuntarily by introducing reforms and transformations. An example is Stolypin's reforms in tsarist Russia.
Basic pattern vectors
The gradual withering away of socialist rudiments - the command economy, totalitarianism, egalitarianism, the underground market, shadow capitalism. Another important vector is the genesis of the relations of the capitalist economy (a modern economy based on the market and private property). The trend of socialization (the return of national, group and international values of economic behavior) and general humanization are the foundation of virtually any transformational processes.
Inevitable change
There are three main changes that are irreversible and occur during the transition period: the loss of the sole control over all economic resources by public authorities, the decline in transformation and the budget crisis. These patterns are generally rather negative and are expressed in crises. As a huge amount of property becomes private, the state loses its monopoly of economic decision-making.
Main tasks on the way of becoming
The transition economy is a complex process of creating a new type of system, overcoming the shortcomings of the old one and ensuring effective economic growth. Crisis phenomena such as production cuts, rising inflation and unemployment are due to changes in the economic system. Therefore, it is necessary to look for ways to solve the following problems:
1. Financial and credit stabilization of the economy through the implementation of monetary policy.
2. Privatization and denationalization of enterprises in various sectors of production and the development of competition and entrepreneurship.
3 Demonopolization is the most important prerequisite for the formation of market competition. Development of a system of restrictions on mergers, disaggregation of existing monopolies.
Liberalization
Developed countries with economies in transition should pay special attention to price liberalization, which would balance supply and demand, eliminate shortages, and create conditions for competition. There are two possible ways of such reforms:
1. Gradual, that is, long-term liberalization.
2. Radical, that is, large-scale and rapid implementation of new reforms, which is called "shock therapy".
It is also necessary to take care of the market infrastructure as a system of economic institutions, to create a strong social protection of the population.
Features of the structure of the transition economy
Property rights are crucial to the development of a free market economy, thisfeatures of the transitional economy. Only the owner is able to independently make the necessary decisions and monitor the result. Entrepreneurs try to multiply ownership, as it provides a wider range of business scope choices and pricing, which affects income. The transitional economy is a certain structure of relations:
- the main levers of influence are in the hands of large shareholders with a high concentration of invested capital;
- followed by many small and medium-sized enterprises with private or joint-stock property; - municipal and state properties play an important role.
Countries with economies in transition
In such countries, all the above changes and changes take place. The transition economies in Eastern Europe are mostly former members of the Soviet Union. They include: Russia, Belarus, Ukraine, Latvia, Moldova, Lithuania, Azerbaijan, Armenia, Kyrgyzstan, Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan. Also in Central Europe there are countries with a transitional type that were members of the socialist camp: the Czech Republic, Poland, Slovakia, Romania, Hungary, Serbia, Bulgaria, Montenegro, Croatia, Macedonia, Bosnia and Herzegovina, Albania, Slovenia. In political life, such countries play the role of subordinates. Some countries have joined the European Union, some have even become members of NATO. The transition economies listed above are currently mostly in a pre-crisis state. Early ninetiesa course was taken for the transition to a market economy from a planned one. These reforms were introduced very quickly in Poland, more gradually in Hungary, the Czech Republic, Estonia, Slovenia, slowly in Ukraine, Romania, Bulgaria and Belarus.
