Transition to the Market in Post-Communist Ukraine.pdfVIP

C E R T CENT RE FO R ECO NO M IC REFO RM A ND T RA NS FO RMAT IO N Department of Economics, Heriot-Watt University, Riccarton, Edinburgh, EH14 4AS Tel: 0131 451 3483/3486 Fax: 0131 451 3498 E-Mail: ecocert@hw.ac.uk World-Wide Web: http://www.hw.ac.uk/ecoWWW/cert/certhp.htm Transition to the Market in Post-Communist Ukraine Mohammed Ishaq* and Paul Hare** *Centre for Economic Reform and Transformation, ** School of Management, Heriot-Watt University, Edinburgh, UK November 1997 Abstract Ukraine became independent in 1991 and formally abandoned central planning. But the development of market methods of input supply and product distribution was impeded by continuing price distortions and the survival of various methods of administrative commodity allocation from the central planning period. This paper outlines the background environment of central planning in Ukraine, reviews the extent to which central planning practices have continued, and illustrates this through two sectoral examples: coal mining and agriculture. It is found that significant elements of non-market allocation of goods and services remain in Ukraine, and proposals are made for further reforms. JEL Classification: P21, P23. Keywords: central planning, Ukraine, transition, supply links, distribution. Acknowledgements This paper has been prepared with the support of ESRC Research Grant No. R000/23/5650 for which the author is grateful. It