Assessment of Economic Transition under Neoliberalism Teachings

From late 1970s, with the change of dominant development paradigm, most countries followed Washington Consensus policy.According to it, with no roles for states, markets increase economic efficiency but practically countries which followed these policies encountered more economic, social and political problems due to lack of necessary institutional infrastructures. In this condition, revisionary thoughts called Post-Washington Consensus gradually appeared in economic development literature.This approach was developed as a result of Washington Consensus weaknesses and experiences of different developing countries especially Eastern Europe and East Asian countries. Consequently, the new economic and social development paradigm was founded according to which, state should have an important role in economic reforms.Therefore, economic transition from state oriented economy to market economy without considering the necessary prerequisites and institutional capacities will result in volatility and instability in economy.