“Excerpts from Ten Years After ‘The Road to a Free Economy’. The Author’s Self Evaluation,“ Transition, April 2000, Vol. 11, No. 2, pp. 3-5. Original: 6.72, in English: 2001.

Kornai János: “Excerpts from Ten Years After ‘The Road to a Free Economy’. The Author’s Self Evaluation,“ Transition, April 2000, Vol. 11, No. 2, pp. 3-5. Original: 6.72, in English: 2001.

http://www.wdi.bus.umich.edu http://www.worldbank.org/html/prddr/trans/WEB/trans.htm http://www.hhs.se/site Development Research Group The World Bank The William Davidson Institute SITE^ Prospects and Challenges for Russia: Davidson Institute Surveys 100 Leading Transition Economists by Jan Svejnar What’s Inside • In five years Russia’s economy is Russia’s economic performance since the fall of communism has been dismal. Since 1989 gross domestic product has fallen almost 50 percent, foreign direct investment has remained miniscule, capital flight has reached dramatic proportions, creation and growth of new firms has been low, and income inequality has approached levels observed in Brazil and India. Yet the Russian Federation is one of the richest countries in terms of natural and human resources. With appropriate economic policies, it could become a rapidly growing economy that is attractive to foreign investors. I n view of the importance of the recent Russian presidential election for the future course of the Russian economy, the William Davidson Institute commissioned a survey of leading policy- and business-oriented academic economists working on transition economies. The survey obtained experts’ views about the performance of the Russian economy and future prospects and challenges for Russia. The 100 respondents, many of whom are research fellows of the Davidson Institute, are almost equally divided among economists in North America, Western Europe, and the former Soviet Union. Their views, summarized below, thus constitute a balanced cross-section of opinions and expertise. Three Papers of the ABODE Conference: • Janos Kornai: The Road to a Free Economy 3 • Paul Collier: End of Conditionality? 6 • Joel Helleman and others: Capturing the State 8 China Needs Further Reforms 11 • China at the Gates of the WTO 13 Growth is Good for the Poor 15 EU Standards and Russia 31 World Bank/IMF Agenda 32 expected to perform better than (or at least as well as) it is currently perform• The dismal performance of the Russian economy during the 1990s was worse than expected. Almost two-thirds of the respondents state that economic reform has proceeded worse or much worse than expected. For the vast majority of analysts surveyed, Russia’s transition from plan to market has not fulfilled its potential. Investments in the Baltics 17 • Business Climate in Estonia 17 • Action Plan in Latvia 18 Latvian Puzzle: Currency Substitution 20 Pension Reform in Ukraine 21 • State Pension Fund is Bankrupt 24 ing. The experts are cautiously optimistic about Russia’s future economic performance. About 53 percent of them expect William Davidson Institute 25 (see detailed contents on page 2) Social Policy Lessons for Transition Economies 29 New Books and Working Papers 30 Stockholm Institute of Transition Economies • The BICEPS Project 33 • SITE RECEP Research 34 • A New Network 36 Conference Diary 36 Milestones of Transition 38 Bibliography of Selected Articles 47