Economics of Transition Essay Example | Topics and Well Written Essays - 2000 words

Economics of Transition - Essay Example This competition not only transformed the contours of politics in the twentieth century but also led to the creation of two parallel and competing economic systems. Transition can be defined as the race of transformation of centrally planned economies into free markets. Such a transformation can be seeing as occurring after the political events that decimated the Soviet Iron Curtain. Transition is characterized by liberalization, macro-economic stabilization, restructuring and privatization and legal and institutional reforms. Countries have employed disparate transition models owing to the distinct initial circumstances that prevailed at the time when transition process materialized. Moreover, transition circumstances can also be seen as the product of the country’s peculiar socio-economic realities. While some countries like China embraced a slow and steady economic transformation approach, others like Russia adopted an aggressive and speedy model. It was envisaged that a sw ift approach could be undertaken for the privatization of small corporate entities as well as liberalization of prices and macro-economic stabilization, without encountering much economic problems (International Monetary Fund, 2000, p.3). The significance of transition for these economies can be attributed to the fact that any immature measures for transition tend to lead to economic collapse. This was all the more clear for example in the Russian banking sector failure in the late nineties. This paper will analyse how rent-seeking activities of financial institutions can have a bearing on hardening budget constraints in the transitional process. 2. Soft and Hard Budget constraints It was Kornai who invented the term ‘soft budget constraint’ to elucidate economic behaviour of the communist economies. This concept is deemed as the focal point of the subject of transition from socialist to capitalist economies. The term itself is derived from microeconomic terminology to shed light on a pragmatic economic social syndrome. The necessity of implementing hard budget constraints is accentuated repeatedly in relation to transition of socialist economies. The disintegration of the banking sector of East Asian economies during the nineties era can be comprehended by studying soft budget constraints (Kornai et al., 2003, p.54). The soft budget hypothesis denotes a condition under which firms incurring losses are bailed out by banks. Banks can undertake this role in both, capitalist and socialist economies. However, its repercussions in socialism make it a potential problem since banks are compelled by the state to rescue loss-making entities, for safeguarding employment or pursing other aims. The entanglement of state and banking into one entity means that any failure on the part of the banks will reflect clearly in the finances of the state. Typical failure in these circumstances leads to massive cuts in social sector development. Under a soft budget const raint, capital is injected in the loss making firm by the banks to keep them afloat and in a position to pay taxes, therefore acting as a disincentive for privatization. Research on the issue practically proves by applying a model based on the local authorities, a bank and firm (Brandt et al., 2003, p.13). The bank managers’ propensity to lend loans to private firms rather than SOEs will escalate as

The origins of Industrial revolution Essay Example | Topics and Well Written Essays - 1000 words

The origins of Industrial revolution - Essay Example Perhaps the first pastoral of its kind, if taken negatively, it would mean destruction of Luke and Michael both to some extent, as Luke could not live a positive life away from it and Michael could not live without the landscape and his son. The unprecedented evolving of society was diminishing the pastoral lifestyle in the late 18th century, and while mountains and land remained the same, shepherds and their herd were disappearing from the landscape. It was too early for the land to go through a transition, although industrial revolution was taken root in cities and was spilling over to rural space. The story is of Michael, a highly principles shepherd who lived with his wife and son, and had to send the son away to pay a debt on land. Luke was expected to go to industrial city to earn money and return to his land. But Luke fails to do so, falling prey into pitfalls of industrialization and fails to return home with the result that both his doting parents die heartbroken. A real event made Wordsworth to narrate the story with simple pathos. The effect of nature on man is highly evident, manipulating and overpowering him, to such an extent that when he is planted away from familiar space, he would be out of depth like Luke. The effect is powerful, overbearing and unbroken. With the advent of industrial revolution, Nature was losing its precious part, animals, and the continuation of pastoral human life that tended them. But there were choices in front of present generation represented by Luke, who had to choose between land and faraway options and this choice never existed for earlier generations and here industrial revolution becomes an alternative provider. "Though the industrial and agrarian revolutions may not have changed the appearance of the Lake District, they claimed the peasants' children. And the break-up of the family was a change which Wordsworth felt must be resisted," John Purkis (1970, p.57. When Michael was written, Britain was already going through the initial days of modernity and was losing her local identities and ecological landscapes. Wordsworth was aware that rural communities were losing their tie with land and were drifting towards cities. . REALISM Realism that reproduced visuals as eye sees it, almost photographic came into prominence in mid 19th century and continued beyond it and still remains as one the most favored form of art. Gustave Courbet who is revered as almost the initiator of Realism was unpredictable in his art. His Burial at Omans is perhaps the most impressive piece connected with the ongoing industrial revolution of the time. http://www.artchive.com/artchive/C/courbet/ornans.jpg.html Industrial Revolution had ushered in a sense of irreverence, acute reality, hardship and indifference in the society. It had defied the conventional piety, respect, honour and devotion and more than that, it has negated the class differences and gender equality is more pronounced with women opting to work. This made women more visible in all places, places of trade, mourning, market, and travel. Industrial revolution had introduced a defiant commonality into the European societies and the above painting