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A Theory of Market Transition: From Redistribution to Markets in State Socialism

Victor Nee
American Sociological Review
Vol. 54, No. 5 (Oct., 1989), pp. 663-681
Stable URL: http://www.jstor.org/stable/2117747
Page Count: 19
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
A Theory of Market Transition: From Redistribution to Markets in State Socialism
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Abstract

State socialist redistributive economies are characterized by the allocation and distribution of goods through central planning. This paper develops a theory of market transition which argues that, in reforming socialist economies, the transition from redistributive to market coordination shifts sources of power and privilege to favor direct producers relative to redistributors. The shift improves incentives for direct producers, stimulates the growth of private markets, and provides to entrepreneurs an alternative path for socioeconomic mobility. A set of hypotheses test the market transition theory with household- and village-level data.

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