This paper examines the Sachs-Woo hypothesis that the gradual approach to reform, though successful in China, was not possible in the USSR because of structural differences between these two economies. To examine this hypothesis, this paper abstracts from the issue of structural differences by...

China has departed from the East Asian development model by letting inequality rise to a high level, which is now contributing to China¡¯s current problems of macroeconomic imbalance, declining efficiency of capital, and rising social tensions. If inequality persists, China may get caught in...