Abstract
The experience gained during the transition decade and five years of the EU membership by Lithuania could be an insightful contribution to an economic policy debate on managing the transition period driven by the global rebalancing of supply and demand.The purpose of the paper is to define the growth enhancing policy measures that have proven efficient during the transition reform period and could be relevant under the new global setting.Findings. Regulated markets set better conditions for the growth of economy than do self-regulated markets, while the most important problem of economic strategy is to evaluate the degree of impact of each determinant on growth and to set their combination favourable for a long-term growth. The growth-enhancing public policy should be aimed to increase the total factor productivity and to ensure competitiveness in global markets.Policy makers have to focus on facilitating an environment conducive to establishing new SMEs in new sectors of economy, instead of focusing on restructuring the old sectors. Restructuring some loss-making industries takes some time, but the efficiency of investments could be ensured if cost reduction is prioritized and leads to an increase in the total factor productivity.
Highlights
The fall of the Berlin wall, which had divided Europe into two different political and economic systems – one based on democratic values and market economy and the other relying on the state oversight over lives of ordinary citizens and centralized administrative governance of economy – had huge implications in the economic development of the whole continent
The countries became major suppliers of goods, putting pressure on the USA and the EU economies to find new sources of growth; de facto, advanced economies entered into the transition period
The experience gained during the transition decade and five years of the EU membership by Lithuania could be an insightful contribution to an economic policy debate on managing the transition period driven by the global reallocation of supply and demand
Summary
The fall of the Berlin wall, which had divided Europe into two different political and economic systems – one based on democratic values and market economy and the other relying on the state oversight over lives of ordinary citizens and centralized administrative governance of economy – had huge implications in the economic development of the whole continent. The former post-soviet countries started their transition process from centralized to market economy, and at the beginning of the 21st century this process, with some exceptions, was completed, though the results were uneven. The experience gained during the transition decade and five years of the EU membership by Lithuania could be an insightful contribution to an economic policy debate on managing the transition period driven by the global reallocation of supply and demand
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