Whence Reform? A Critique of the Stiglitz Perspective
By Marek Dabrowski, Stanislaw Gomulka and Jacek Rostowski
Abstract.
This paper discusses the key hypotheses which Joseph Stiglitz proposed, in his wideranging
critique of the ‘Washington Consensus’, with regard to transition reforms
and economic policies in China and Russia. The primary purpose is to evaluate the
Stiglitz perspective in the light of empirical evidence, including the experience of
countries outside China and Russia. Although some of the points Stiglitz makes are
important for understanding what has happened in the transition, this paper argues
that his perspective mis-interprets the key facts of the Chinese transition, misdescribes
the facts of the Russian transition and fails to consider the theoretical and
policy implications of the success of a “third model”, which is represented by some
Central European and Baltic transitions.
! Journal of Economic Literature Classification Numbers: G34, L33, P11, P52.
! Keywords: Stiglitz, China, Russia, transition, debate, perspectives
Forthcoming in the Journal of Policy Reform.
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Whence Reform? A Critique of the Stiglitz Perspective*
By Marek Dabrowski**, Stanislaw Gomulka*** and Jacek Rostowski****
1. Introduction.
That the transition from communism is largely over can be seen in the fact that the
battle over its historical interpretation has begun1. An early salvo in this battle has
been fired by Joseph Stiglitz [1999a and 1999b], at the time Senior Vice-President of
the World Bank, in a blistering attack aimed at both the Washington consensus (of the
IMF, World Bank and US Treasury) which, he claims, foisted tragically mistaken
policies on the countries emerging from communis ...