Политика реформ, начальные условия и трансформационный спад

In this paper we formulate and substantiate a hypothesis that the magnitude of the transformational recession in transition economies in the last decade of 20th centaury was determined not only by initial pre-reformed conditions but also by privatization policies. Results of regression analysis that confirm this hypothesis are presented. It is shown that GDP decline during the first 9 years of reforms was the greater the more radical was privatization at the start of reforms. Our calculations also demonstrate that governments selected the starting speed of price and foreign trade liberalization taking into account initial conditions. This observation may explain the non-significance of the speed of liberalization in the regressions.