The structural responses of Romanian industries to transition from a planned to market economy

Ibrahim, G., 2000. The structural responses of Romanian industries to transition from a planned to market economy. PhD, Nottingham Trent University.

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The aim of the thesis is to critically examine the transition process from a planned economy towards a market economy that has taken place in Romania. Based on a political economy approach, this current research takes a new direction by departing away from the dominant view in the transition literature that underpins the IMF and the World Bank policies (neo-liberalism), that postulates a spontaneous adjustment without a past. We adopt a political economy approach to investigate the institutional and structural rigidities hindering restructuring and transformation of the Romanian economy. In this thesis, the impact of real wages on industrial performance is examined using a panel dataset of Romanian industries from 1990 to 1996. A reduction in real wages has become a standard prescription for economies undergoing industrial restructuring due to its perceived beneficial impact on both employment and exports. Using both static and dynamic panel estimation, real wages are found not to be negatively associated with either output and employment, a result that provides little support for the orthodox neoclassical viewpoint. The theoretical and empirical inputs reveal the limitation of neoclassical economics and demonstrate the need for an evolutionary approach that recognises the role of history and path dependency. It is suggested that an institutionalist approach that put more stress on improving productivity may be more likely to achieve the long-term objective of successful industrial restructuring. The key to the transition from a planned economy to a market economy is the institutions that are established to enable the market to operate. While this is acknowledged, after ten years of transition in Romania what has not been fully addressed is the appropriateness of the forms of institutions that have been suggested for adoption and whether they constitute the right mix. We consider the appropriateness of the evolutionary approach proposed by the old institutionalist view on institutional change as a contrast to a new institutional view.

Item Type: Thesis
Creators: Ibrahim, G.
Date: 2000
ISBN: 9781369314939
Divisions: Schools > Nottingham Business School
Record created by: Linda Sullivan
Date Added: 30 Nov 2020 14:47
Last Modified: 10 Aug 2023 09:13

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