Stabilization Policies at Crossroads? An Interim Report From Central and Eastern Europe

Barta, V. & Schneider, C.M. (1994). Stabilization Policies at Crossroads? An Interim Report From Central and Eastern Europe. IIASA Collaborative Paper. IIASA, Laxenburg, Austria: CP-94-011

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Abstract

The papers in this volume were written by experts from Central and Eastern Europe and constitute the core of the material presented at the international workshop on "Macroeconomic Stabilization of Economies in Transition" held in Prague, Czech Republic from 22 to 24 April 1993.

The purpose of the workshop was to assemble policy-makers and interested scholars from Central and Eastern European countries, as well as western experts to thoroughly discuss the accumulated experience with macroeconomic stabilization during economic reforms in Albania, Bulgaria, Croatia, former Czechoslovakia and its successors the Czech and Slovak Republics, Hungary, Poland, Romania, Russia, and Ukraine. Those who presented papers and those who commented drew attention to problems now explicit and urgent in countries which pioneered reform to convert from communist central planning to a pluralist market system. The late-comers to the transition process are very likely to face similar complications and dilemmas. Organizers of the workshop firmly believed that dissemination of experience from more rapidly advancing reform countries could contribute to a better understanding of burdensome stabilization tasks and to a future improvement and refinement of stabilization policies and tools, particularly for the benefit of the transitional laggards.

The results of the workshop inferred that the stabilization of a post-socialist economy is a difficult but attainable goal. The character of stabilization policies underwent many modifications and adjustments. Their initial stringency was abandoned and replaced by more adaptive policies in some countries. The workshop participants generally also agreed that regardless of the approach utilized to implement the stabilization effort (shock versus gradual approach), countries face similar problems after the stabilization phase: they comprise long-term and painful restructuring of industries; budget imbalances; extensive restructuring of the public sector; enlarging the scope of currency convertibility; time-consuming privatization; and so forth. Recognition of the dynamic changes in the recent past, as well as the decisions facing policy-makers in post-communist countries in contemplating how to proceed where from each unique position already attained, guided us to choose "Stabilization Policies at Crossroads?" as the title of this volume.

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