July 08, 2003
Notes: Blanchard on Transition

Olivier Blanchard's view on the transition from communism to capitalism as of the mid-1990s. If I read his Economics of Post-Communist Transition right, the key problem was the absence of a Marshall Plan to keep demand high and employment high during transition. In the immediate aftermath of World War II in Western Europe, the Marshall Plan allowed countries to maintain high aggregate demand without worrying about balance-of-payments constraints. There was no similar inflow of hard currency in the early 1990s to allow transition governments to create the demand to rapidly reemploy those laid off from state industries. The Bush I Administration had, because of the Reagan deficits, "more will than wallet." As a result, Blanchard argues, high unemployment led to a fear of reallocation and restructuring, and the slowing of the entire process of reform down to a glacial pace. If only demand and employment could have been kept high during the initial stages of transition... And since the mid-1990s? Since Blanchard wrote his book, what has happened? If I read the data right, economic progress in Central Europe has been slow, in Eastern Europe has been very slow, and in the former Soviet Union (where there never was the...

Posted by DeLong at 03:28 PM

May 14, 2003
Notes: Grigore Pop-Eleches, "Refracting Conditionality: IMF Programs and Domestic Politics During the Latin American Debt Crisis and the Post-Communist Transition"

I have to read a political science dissertation tonight. It's very good... Grigore Pop-Eleches (2003), "Refracting Conditionality: IMF Programs and Domestic Politics During the Latin American Debt Crisis and the Post-Communist Transition" (Berkeley, CA: U.C. Berkeley Ph.D. Diss.). To the extent that neoliberal reforms are consolidated in any but the most developed countries of the two regions, the relative success stories discussed in this dissertation (Bolivia and Bulgaria) revealed a highly contingent pattern of deep initial economic crisis, skillful political coalition building, and generous Western support... the importance of taking advantage of the initial economic crisis... to forge a more durable political coalition in support of economic reforms. While.. the importance of such coalitions is easy to ignore during the post-electoral honeymoon period, governments that succumb to the temptation of insulated economic policy decision-making have a much more difficult time sustaining economic reforms once their popularity is undermined by the sometimes sizeable social costs of such reforms.... another interesting dilemma... the statistical results and the discussion of Bolivia's unlikely neoliberal reform coalition confirm the importance of rent sharing as the glue that binds together social and political actors.... On the other hand, the increasing neoliberal emphasis on privatization, deregulation,...

Posted by DeLong at 05:18 PM

May 12, 2003
Notes: The Character of the Absolutist State in Western Europe

Perhaps the most interesting argument about why the demographic crisis produced by the Black Death did not lead to the reemergence of serfdom in Western Europe (as lords discovered that, with population down by 1/3, they would rather be labor lords than landlords) is that made by Perry Anderson in his book Lineages of the Absolutist State. Anderson argues, first, that the particular role of Western European towns made a formal reimposition of servile bondage impossible: "...the aristocracy had to adjust to a second antagonist: the mercantile bourgeoisie... towns... the intercalation of this third presence... prevented the Western nobility from settling its accounts with the peasantry in Eastern [European] fashion, by smashing its resistance and fettering it to the manor. The medieval town... hierarchical dispersion of sovereignties... feudal mode of production... freed urban economies from direct domination by a rural ruling class.... [Urban] economic and social vitality acted as a constant, objective interference in the class struggle on the land, and blocked any regressive solution to it by the nobles." Feudal lords could agree among themselves and with the king to reimpose serfdom, but they lacked the power to do so if peasants could still (as they could in Western...

Posted by DeLong at 02:02 PM

January 01, 1990
J. Bradford DeLong (1990), "In Defense of Henry Simons' Credentials as a Classical Liberal," Cato Journal 9: 1 (Winter), pp. 105-122.

J. Bradford DeLong (1990), "In Defense of Henry Simons' Credentials as a Classical Liberal," Cato Journal 9: 1 (Winter), pp. 105-122....

Posted by DeLong at 03:07 PM