Nobel Symposium in Economics: The Economics of Transition

(1999, NS 115)
September 10 - 12, 1999
Grand Hotel Saltsjöbaden, Sweden, and the Stockholm School of Economics
Organizers: Associate Professor Erik Berglöf, Stockholm Institute of Transition Economics and Eastern European Economies (SITE), Stockholm School of Economics; Associate Professor John Earle, SITE and Central European University, Budapest; in collaboration with an international program committee consisting of Professor Olivier Blanchard, Massachusetts Institute of Technology; and Professor Gérard Roland, European Center for Advanced Research in Economics (ECARE), Brussels.

At the symposium, 46 of the world's foremost economists from 14 countries in Europe, America and Asia presented their own contributions.

The fall of Eastern European communism was one of the most important economic events of the 20th century. The transition process raised interesting questions about the interplay between economic and political changes, but also about the market economy and its fundamental institutions. The purpose of the symposium was to examine the findings of this dynamic field of research and identify areas of interest for future research.

The symposium consisted of seven sessions, as well as a separate address by János Komai of Harvard University. The final day took place at the auditorium of the Stockholm School of Economics and was open to the general public. The international program committee summarized the conclusions of the discussions during the first two days. In a final, more policy-oriented session, Joseph Stiglitz, chief economist of the World Bank, presented some conclusions from a policy perspective. This was followed by a debate featuring five leading decision-makers from Romania, Poland, Russia and Estonia, including former Russian Prime Minister Yegor Gaidar.

The symposium was well publicized in the press. The contributions are available from SITE.

Program
September - Friday
Session 1	Macroeconomic Developments Chairman: Gerard Roland, Université Libre de Bruxelles "The Evolution of Output in Transition Economies: Explaining the Differences" Andrew Berg, Eduardo Borensztein, Ratna Sahay and Jeromin Zettelmeyer (IMF) "Transition with Supply of Labor" Tito Boeri (IGIER-Bocconi) Discussants: Olivier Blanchard, MIT Richard Layard, London School of Economics
Session 2	Fiscal Federalism Chairman: Tore Ellingsen, Stockholm School of Economics "Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style" Hehui Jin (Stanford University), Yingyi Qian (Stanford University), and Barry R. Weingast (Hoover Institution, Stanford University) "Incentives to Provide Local Public Goods: Fiscal Federalism, Russian Style" Ekaterina V. Zhuravskaya (Russian European Centre for Economic Policy) Discussants: Alberto Alesina, Harvard University Mathias Dewatripont, Université Libre de Bruxelles
September 11- Saturday
Session 3	Centralization/Decentralization and Reform Chairman: Eric Maskin, Harvard University "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China" Alwyn Young (University of Chicago) "Coordinating Changes in M-Form and U-Form Organizations" Yingyi Qian (Stanford University), Gérard Roland (Université Libre de Bruxelles), and Chenggang Xu (London School of Economics) Discussants: Wei Li, Fuqua School of Business, Duke University Dani Rodrik, Harvard University
Session 4	Corruption Chairman: Anders Åslund, Carnegie Endowment for International Peace "Dodging the Grabbing Hand: The Determinants of Unofficial Activity in 69 Countries" Eric Friedman (Rutgers University), Simon Johnson (MIT), Daniel Kaufmann (World Bank), and Pablo Zoido-Lobaton (World Bank); and "Why Do Firms Hide?: Bribes and Unofficial Activity after Communism" Simon Johnson (MIT), Daniel Kaufmann (The World Bank), John McMillan (UC San Diego), and Christopher Woodruff (UC San Diego) "The Causes of Corruption: A Cross-National Study" Daniel Treisman (UC Los Angeles and Hoover Institution) Discussants: Anne Krueger, Stanford University Paul Milgrom, Stanford University
Session 5	The Soft Budget Constraint and Privatization Chairman: Janet Mitchell, Facultés universitaires Saint-Louis "Soft Budget Constraint Theories: From Centralization to the Market" Eric Maskin (Harvard University) and Chenggang Xu (London School of Economics) "When Does Privatization Work? The Impact of Private Ownership on Corporate Performance in the Transition Economies" Roman Frydman (New York University), Cheryl Gray (World Bank), Marek Hessel (Fordham University), and Andrzej Rapaczynski (Columbia University School of Law) Discussants: Philippe Aghion, EBRD, Harvard University and UCL Jan Svejnar, University of Michigan
18.00 p.m.	Keynote Address at Stockholm City Hall, János Kornai, Harvard University: "The Debate on Gradualism in Retrospect"
September 12 - Sunday
Session 6	Organizing Market Relations Chairman: John Earle, SITE, Stockholm School of Economics "Disorganization and Financial Collapse" Dalia Marin (University of Munich) and Monika Schnitzer (University of Munich) "Contract Enforcement in Transition" Simon Johnson (MIT), John McMillan (UC San Diego), and Christopher Woodruff (UC San Diego) Discussants: Simon Commander, EBRD and London Business School Bengt Holmström, MIT
Session 7	Open Session: Learning from Transition, Aula Lecture Hall, Stockholm School of Economics Chairman: Erik Berglöf, SITE, Stockholm School of Economics The Economics of Transition: Conclusions from the Symposium Olivier Blanchard (MIT) and Gérard Roland (Université Libre de Bruxelles) Transition: How It Has Changed the Way Economists Think Joseph Stiglitz (World Bank) and Andrei Shleifer (Harvard University) Managing Transition: A Learning Process for Policymakers Daniel Daianu, former Minister of Finance, Romania Yegor Gaidar, Institute for Economies in Transition, Moscow Danuta Hübner, United Nations Economic Commission for Europe Vladimir Mau, State Committee for Economic Reform, Moscow Alari Purju, former Economic Adviser, Office of the Prime Minister of Estonia
	Closing of the Symposium

 

Participants
Philippe Aghion	EBRD, Harvard University and University College, London
Alberto Alesina	Harvard University
Anders Åslund	Carnegie Endowment for International Peace
Erik Berglöf	SITE and Stockholm School of Economics
Olivier Blanchard	Massachusetts Institute of Technology
Tito Boeri Igier	Bocconi University
Eduardo Borensztein	International Monetary Fund
David Brown	SITE and Stockholm School of Economics
Mike Burkart	SITE and Stockholm School of Economics
Simon Commander	EBRD and London Business School
Zsuzsa Daniel	Institute for Economic Analysis, Central Statistical Office, Budapest and Harvard University
Mathias Dewatripont	ECARE, Université Libre de Bruxelles
John Earle	SITE and Stockholm School of Economics
Tore Ellingsen	Stockholm School of Economics
Guido Friebel	SITE and Stockholm School of Economics
Roman Frydman	New York University
Sergei Guriev	Russian European Centre for Economic Policy (RECEP) and New Economic School
Bengt Holmström	Massachusetts Institute of Technology
Simon Johnson	Massachusetts Institute of Technology
Daniel Kaufmann	The World Bank
Jozef Konings	LICOS, University of Leuven
János Kornai	Harvard University
Anne Krueger	Stanford University
Richard Layard	London School of Economics
Wei Li	Fuqua School of Business, Duke University
Dalia Marin	University of Munich
Eric Maskin	Harvard University
John McMillan	University of California, San Diego
Paul Milgrom	Stanford University
Janet Mitchell	Facultés universitaires Saint-Louis, Brussels
Yingyi Qian	Stanford University
Dani Rodrik	Harvard University
Gérard Roland	ECARE, Université Libre de Bruxelles
Mark Schaffer	Heriot-Watt University
Monika Schnitzer	University of Munich
Andrei Shleifer	Harvard University
Joseph Stiglitz	The World Bank
Jan Svejnar	University of Michigan
Daniel Treisman	University of California, Los Angeles and Hoover Institution
Klaus Wallner	SITE and Stockholm School of Economics
Jörgen Weibull	Stockholm School of Economics
Chenggang Xu	London School of Economics and Harvard University
Alwyn Young	University of Chicago
Jeromin Zettelmeyer	International Monetary Fund
Ekaterina Zhuravskaya	Russian European Centre for Economic Policy (RECEP)
Participating policymakers
Daniel Daianu	Former Minister of Finance, Romania
Yegor Gaidar	Institute for Economies in Transition, Moscow
Danuta Hübner	United Nations Economic Commission for Europe
Vladimir Mau	State Committee for Economic Reform, Moscow
Alari Purju	Former Economic Adviser, Office of the Prime Minister of Estonia