Comment on Chapter 4

Abstract

The chapter by Scholz and Tomann strikes a tone which is timely, interesting and thought provoking. It challenges the conventional assumption in economic analysis that equity detracts from economic efficiency. The authors provide convincing evidence to show that this assumption is inappropriate when considering the economic, social and political development of central and eastern European countries. Their main premise is that social policy plays a supportive role in the transition of central and eastern European countries. This view is opposed by Herbert Kitschelt (see Kitschelt et al., 1995; Kitschelt, 1996) who argues that these states should first concentrate on creating a climate conducive to entrepreneurship, which then contributes to a middle-class basis which in turn has moderate or stabilizing influences on the political development of these countries.