event

past
event

Presentation of Report On Former Centrally Planned Economies

The prominent American economist James Gwartney presented his new report examining the changing economic and political institutions of 25 former centrally planned economies.

date&time

13.12.2017

6 pm

description

On December 13th, James Gwartney, a prominent American economist, professor of economics and political science at the Florida State University, co-author of bestsellers "Economics: Private and Public Choice" and "Common Sense Economics", presented his and Hugo Montesinos' report "The Former Centrally Planned Economies: 25 Years After the Fall of Communism" for the first time. The presentation was organized and hosted by Bendukidze Free Market Center as part of our effort to promote economic freedom in Ukraine.

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Why do some countries grow and prosper, and others do not? Searching for the answer to this question, the authors analyzed results of the "natural experiment" that took place after the collapse of the Soviet Union. Indeed, out of the 25 former centrally planned economies, some adopted liberal reforms rather quickly, some did it eventually, while others still have not committed themselves to genuine liberalization. The early reformers include the Baltic States, Poland and, to some extent, the Czech Republic. The group of late reformers consists of Romania, Bulgaria, Georgia, Albania, Armenia and Slovakia. Russia and Ukraine are those countries that have not liberalized their economies yet.

As Mr Gwartney pointed out, economies that have been successful in expanding economic freedom have grown faster and are more efficient than those which failed to liberalize. Moreover, limited economic freedom creates favorable conditions for corruption, which can not be eradicated without economic liberalization.

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What needs to be done in order to expand economic freedom? The cornerstones of economic freedom are personal choice, voluntary exchange, open markets and protection of people and their property from aggressive acts by others. That is why, in order to become economically free, a country must:

• Maintain low levels of public government spending and taxes;

• Protect property rights and enforce contracts evenhandedly;

• Provide access to sound money;

• Avoid imposing trade barriers and regulation that undermine voluntary exchange.

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This recipe for success is particularly relevant for Ukraine, given the fact that it has the lowest levels of economic freedom and GDP per capita, as well as the slowest growth rate, among the 25 former centrally planned economies.

The presentation was held with the support of the Atlas Network and NGO "Rozvytok".

FCP economies presentation