The Institutionalised Transformation of the East German Economy

by Sabine Spangenberg

Overview

"It is, perhaps, worth stressing that economic problems arise always and only in consequence of change. So long as things continue as before, or at least as they were expected to, there arise no new problems requiring a decision, no need to form a plan. " (Hayek, 1945, p. 523) This book is based on my research for the degree of Doctor of Philosophy which I received from Lancaster University, England in the second half of 1997. It is an analysis of the structural transformation of the economic system in East Germany and the behavioural relations these changes imply. The approach of institutionalised transformation (not the least by the creation of the Treuhandanstalt) is examined with a theory-based framework which is derived from system-theoretical, evolutionary and constitutional-ethical considerations as well as from the newly developed adjustment model which has been constructed as a dynamic transformation approach. A relationship between norm changes, the new institutional framework of the economic system and the compatibility of the latter with changes of the remaining partial societal systems is recognised. Rigidity factors in the system's flexibility to react as well as the adjustment of economic behaviour to structural changes are analysed. The "marginal product of system change" is defined (section 2. 8. 2).

Product Details

ISBN-13:	9783790811032
Publisher:	Physica-Verlag HD
Publication date:	07/31/1998
Series:	Contributions to Economics
Edition description:	1998
Pages:	318
Product dimensions:	6.10(w) x 9.25(h) x (d)

Table of Contents

One Research Objectives, Methodology and Layout.- 1.1 Field of Analysis and Research Objectives.- 1.2 Methodological Discussion.- 1.3 Structure of Analysis.- Two Theoretical Approaches to System Analysis and the Institutional Framework.- 2.1 Introduction.- 2.2 General System Theory.- 2.3 Evolutionary Approaches of System Transformation.- 2.4 The Institutional Structure of Control Inside the Firm and Organisational Efficiency.- 2.5 Constitutional Economics and the Theory of the Democratic Firm.- 2.6 An Alternative Allocation of Control within the Codeterministic Firm and the Democratic Firm.- 2.7 Theoretical Synthesis.- 2.8 Modelling of a Dynamic Transformation Approach.- Three The Institutionalisation of the East German System Transformation.- 3.1 Introduction.- 3.2 The Former East German Economic Structure of a Socialist Planned Economy.- 3.3 Transformation of the Centralised Structure of Organisation and Decision-Making.- 3.4 Deconcentration of Combines as Basis for Competitive Market Structures.- 3.5 Establishment of Unambiguous Property Rights.- 3.6 Concluding Remarks: Institutionalised System Change and Room for Transitional Economic Policy.- Four Transitional Privatisation Policy: Objectives, Instruments and Theoretical Implications.- 4.1 Introduction.- 4.2 Open Property Issues: Institutionalised Support of Capital Investment.- 4.3 Property Rights-Theoretical Implications.- 4.4 Interpretation: Integration of a Selection Function.- 4.5 Conclusions.- Five Economic Implications and Post-Institutionalisation Policy.- 5.1 Introduction.- 5.2 The Initial Economic Reorganisation Shocks.- 5.3 Mediation of the Process of Forming New Economic Structures.- 5.4 Growth Perspectives.- 5.5 Conclusions.- Six Application of the Adjustment Model to the East German Transformation.- 6.1 Introduction.- 6.2 System Change and Rigidity Analysis.- 6.3 Adjustment Deficiencies of Economic Behaviour.- 6.4 Conclusions.- Seven The Welfare Concept of the East German Transformation.- 7.1 Introduction.- 7.2 Non-Comparatibility of Interpersonal Utilities, and Social Welfare Concept.- 7.3 Definition of the Welfare Feasibility Frontier and the Social Welfare Function.- 7.4 Axioms of the Social Welfare Function and Definition of Social Welfare Improvements.- 7.5 Mathematical-Theoretical Formulation of the Social Welfare Function, its Shape and Distributional Parameters, and its Growth Function.- 7.6 Social Welfare and Behavioural Selection Function.- 7.7 Welfare and Property Value Relationship.- 7.8 Welfare Ambiguity: Partial Welfare Elasticities and Growth Rates of Consumers’ and Producers’ Surplus.- 7.9 Conclusions.- Eight Synopsis and Conclusions.- 8.1 Relevance of the East German Case Study for Transformational Economics.- 8.2 System Theory Restated and Refined.- 8.3 Evolutionary Approaches Restated and Refined.- 8.4 Limitations of the Analysis.- 8.5 Institutionalised Transformation: The Right Approach?.- Footnotes.- Abbreviations.- List of Tables, Figures and Diagrams.- Legal References.