Exercise 3. A)Please decide whether the following statements are correct or not.

A) Please decide whether the following statements are correct or not.

Q1: Intuitively, transition refers to a process where economies are on a known and predictable trajectory, leading from communism to a democratic market economy. (p. 333) CORRECT

Q2: Transition countries are all alike. (p. 334) INCORRECT (Just the opposite is the case.)

Q3: According to Gilpin, the former communist countries have to first eliminate corrupt and deficient structures before they embark on building an effective and new political and economic structure. CORRECT

Q4: According to the neoliberal convergence explanation, the postcommunist recession was not an inevitable consequence of the transition process (p. 335) INCORRECT (It was inevitable.)

Q5: According to the cultural legacy explanation, the bad habits and mentalities of the past can change only slowly. (p. 335) CORRECT

Q6: One of the most important guiding ideas of transition was that private enterprises were considered to be the key agents of political and economic changes in the region. (p. 337) CORRECT

Q7: In a simplistic view, institutional transformation was believed to entail a substitution of the market for the state. (p. 337) CORRECT

Q8: According to Gilpin, the neoliberal-inspired transition produced many corrupt and inefficient states. (p. 337) CORRECT

Q9: In all of the former communist countries, state property was transferred to honest and efficient privates. (p. 338) INCORRECT (State property was “sold” to former communists, corrupt bureaucrats and political favourites.)

Q10: “Winner take all” politics means that the beneficiaries of partial reforms were not interested in supporting further reforms. (p. 339) CORRECT

B) Please select the right answer (only one correct answer exists).

Q1: Transition is … (p. 334) (a) a path-dependent process.

Q2: How can China be best described? (p. 334) (c) A combination of a highly autocratic political regime and a market-type economy.

Q3: Following the collapse of communism, countries… (p. 334) (a) suffered severe recession.

Q4: Which are the three basic explanations for the relatively bad performance of CEE countries? (p. 335) (b) neoliberalism, cultural legacy, crisis-of-governance

Q5: According to the neoliberal convergence explanation, the shift from … takes time. (p. 335) (d) a seller-oriented economy to a buyer-oriented one

Q6: Which type of explanation assumes that “it is the nature of reforms that matters get worse before they get better”? (p. 335) (a) neoliberalism

Q7: Which of the following are associated with the cultural legacy explanation? (p. 335) (c) revival of nationalism and ethnic conflicts

Q8: According to the crisis-of-governance view, … (p. 336) (a) there was an intense fear of communist comeback.

Q9: The crisis-of-governance view claims that … (p. 337) (b) reformers did not replace the eliminated state apparatus with new and competent institutions.

Q10: Why was it necessary for former communist countries to sell their properties to foreign owners? (p. 338) (b) Foreign buyers provided capital, technology and know-how in exchange.

C) What constitutes a transition (or transition problem)? Note: several correct answers may exist. (p. 336)

(b) The implementation of several complex tasks.

(d) The liquidation of inefficient capacities.

(f) Marketisation.

(h) Privatisation of state-owned property.

(i) The creation of a new civic culture of public virtues.

topic 12.

Nation state and globalisation

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