Course Overview

The study of comparative economics has changed a great deal in recent years, especially since 1989. The principal cause of this was the collapse of the Soviet centrally planned economic system which had served for many years as the polar alternative to the variety of capitalist systems that exist in the West. Simultaneously, variants of the Soviet system also underwent large scale reform or other changes. In China economic reform, although largely without its political counterpart, has transformed that economy in recent years. Yugoslavia, the dominant model of collectively owned socialism, has broken apart and much of its economy lies in ruins. Even Cuba, the bastion of socialism in the Western Hemisphere, deprived of support and subsidy from the Soviet Union, has, albeit reluctantly, been contemplating change.

Thus, in one sense capitalism has emerged the victor. However, at the same time that economies based on centralized planning were becoming extinct, new variants of capitalism were emerging, especially in East Asia, to challenge the western model. Japan long ago joined the ranks of the developed nations and its success in terms of growth and world trade has led to great interest in its institutions, culture and policies, and the significant differences from the economies of Europe and North America. Moreover, nations that only a decade ago were regarded as developing have made that leap into development, among them South Korea, Taiwan, Singapore and Thailand. Scrutiny of their systems of economic organization has increased accordingly. Even within the heart of Western Europe there has been change. Sweden, for long the defining nation of social democracy, has undergone a considerable shift in recent years. The variant economies of Western Europe are now being brought toward a more homogenous system by the action of the (now) 15-nation European Union.

All these changes, however, far from making the study of Comparative Economics redundant, have provided us with a new, and incisive way of looking at economies. The process of transition in Eastern Europe, for example, has forced us to compare the institutions of capitalism and socialism in a new way. The dramatic collapse of output in the former Soviet bloc, and the unexpectedly slow pace of recovery have forced us to evaluate very carefully the differences in institutions, culture, history and policy that have made this transition more painful than had been predicted.