Developing a perspective on transition economies as complex systems

Please cite the paper as:
Dr. Viktorija Mano, (2017), Developing a perspective on transition economies as complex systems, World Economics Association (WEA) Conferences, No. 2 2017, Economic Philosophy: Complexities in Economics, 2nd October to 30th November 2017

Abstract

Decades of blindly following mainstream economic policy has opened a new potentiality of research, especially since most of the phenomena that occur around us are caused by and interact with many other parts within a complex globalised world. The objective of this article is to give complexity theory the central place it deserves in development economics and policy research. The goal is to critique the mainstream economic position of neo-liberal institutions, such as the IMF, in their one size fits all approach, and to highlight the use of complexity theory in better understanding the economic systems. My intention is to provide an understanding of the applicability of this theory in the specific context from a qualitative analytical approach.

I analyse the relevant literature particularly relating to complex economic systems and the elements that comprise them. The main complexity characteristics are identified through this paper and applied in the context of the Macedonian transition economy. The choice of context is based on two reasons. The first one relates to the IMF’s frequent emphasis on Macedonia’s transition as a success story. The second reason relates to the prolonged transition escalating into the most serious economic and political crisis that the country has experienced recently (EUROPP, 2016). It seems confusing that such a successful transitional economy in the 90’s, after nearly three decades of reforms, could not reach economic and political stability.

Therefore, I am looking at the role of the IMF during Macedonia’s transition and critiquing the linear perception that the institution adopts from the mainstream economic theory and deliberate the benefits of using complexity theory instead, in uncovering the systems complexities. This paper contends that the neo-liberal policies implemented during the Macedonian transition have been imposed by following mainstream economic theory and neglecting the complex nature of the context.

Keywords: , , , , ,

2 comment

  • Henry de-Graft Acquah says:

    Excellent Paper. Bringing complexity theory into development economics and policy research should be the way forward.

  • Bonokai G. B. GOULD, ChE says:

    It is hard times that we acknowledge the variance taking place in the macroeconomic environment thus making mainstream economic theory unreliable to solve some of the many problems in the economy. Fresh memories is manifested in the Global Financial Crisis when the transition mechanism fail to be a reality by just using interest rate to stimulate demand to get economies out of recession did not work, thus the discovery of quantitative easing. Developing a perspective on transition economies as complex systems could be another step forward to address changes in the economic space and maintain macroeconomic growth and stability.

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