The course deals with main economic issues related to transition from centrally-planned economies of Soviet block, Yugoslavia, and China to market economies. Compared to other similar courses, this course will be less descriptive and more analytical, we will use economic models and results of econometric studies where appropriate. We will also try to apply experimental approach in order to provide the students with direct experience with asymmetric information markets and soft-budget constraints. The course is trying to focus on aspects of transition which can be used to shed light on more permanent problems of economics systems and which can help reduce future exposure to similar errors.
The first part of the course analyzes functioning of central planning and selected topic related to corporate governance under central planning (e.g. Yugoslavian self-managed firms) and provides explanation of the gradual economic decline and main structural problems experienced by the countries. The second part focuses on main transition steps and their economic logic. We will also deal with basic theoretical models that attempt to explain problems experienced by transition economies. The last part will deal with performance of firms and the role of corporate governance, ownership and institutions.
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