THE TRANSFORMATION FROM COMMUNISM TO CAPITALISM - HOW FAR - HOW FAST

A prominent American specialist on Soviet and East European economies argues that there are important gains to be obtained from rapid market liberalization and privatization in the transition from communism to capitalism. These gains depend on the responsiveness of firms to marke t signals. A review of the available evidence suggests that rapid priv atization is an important factor promoting such responsiveness. The pa per also refutes ''evolutionary'' criticisms of rapid transition polic ies on the basis of available evidence from East Europe, historical ev idence, and the incompatibility between evolutionary approaches and th e desire for democratic regimes in East Europe and the former USSR.