How Capitalism Was Built tells the story of how the former communist countries in Central and Eastern Europe, Russia, and Central Asia became market economies from 1989 to 2006. It discusses preconditions, political breakthroughs, and alternative reform programs. Three major chapters deal with the deregulation of prices and trade, price stabilization, and privatization. Early radical reform made output decline the least. Social developments have been perplexing but mixed. The building of democracy and the establishment of the rule of law have been far less successful. International assistance has been limited but helpful. This region has now become highly dynamic, but corruption remains problematic.
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Introduction: a world transformed
1. Communism and its demise
2. Shock therapy vs. gradualism
3. Output: slump and recovery
4. Liberalization: the creation of a market economy
5. From hyperinflation to financial stability
6. Privatization: the establishment of private property rights
7. An inefficient social system
8. Democracy vs. authoritarianism
9. From crime toward law
10. The role of oligarchs
11. The role of international assistance
12. Conclusions: a world transformed