Bye-bye central planning, hello market hiccups: institutional transition in Romania

Abstract

Romania is considered as having had two transition periods—a gradual transitional phase from 1990 to 1996 followed by shock therapy since 1997. The key to the trans ition from a planned economy to a market economy is the institutions that are estab lished 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 con stitute the right mix. Our contention is that both phases of the transition process have largely been guided by the prescriptions arising from a 'new' institutionalist perspec tive and that a more effective transition would have occurred if more attention had been paid to the evolutionary nature of the institutions established along the lines advocated by 'old' (American) institutionalists.