Institutional Transition and the Problem of Credible Commitment

During the last phase of state socialism, the economic reforms attempted by these countries didn’t stop the collapse of communism. Neither did the free market economic reforms in the democratic West starting around 1975 bring progress and prosperity expected. The frustrations of both these attempts of transformation make it clear that the goal of social transition would not be achieved without liberal limits on the state - what was created to ward off private predation, which itself became a greater problem of predation. Indeed, we can only ensure the effective function of the society by establishing the self-sustaining constitution and enforcing credible commitment that bind the public institutions.

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Citation (Chicago Style)

Boettke, Peter J., Institutional Transition and the Problem of Credible Commitment (June 27, 2011). ANNUAL PROCEEDINGS OF THE WEALTH AND WELL-BEING OF NATIONS, p. 41, Emily Chamlee-Wright, ed., Beloit College, 2009.