THE ROLE OF STATE ECONOMIC REGULATION IN IMPLEMENTATION OF ECONOMIC REFORMS: MODERN ASPECT

Abstract

The article is devoted to analysis of models of state regulation of economy and the results of economic reforms, which were implemented in different countries of the world in the recent decades. In the article the experience of state regulation in the process of economic reforms in the Peoples Republic of China is analyzed and compared with the processes of reforming the economy in the post-Soviet republics and the countries of Eastern Europe. The statistics of economic development (GDP and GDP per capita growth or decline) of Peoples Republic of China and some ex-Soviet republics and some Eastern European countries is analyzed and several graphs and tables have been created for the scientific research purposes. Throughout the article the two models of reforming of the economy are anaylized: the model of “shock therapy” and the model applied in China – the model of gradual economic reforms under the strict control of the government. According to the research data, it has been proved that China has been constantly improving its major economic indicators (like GDP per capita, especially in comparison to the world average level) showing 10% rate of economic growth, while at the same period of time, most of post-Soviet republics and countries of Eastern Europe experienced severe economic problems, with economic decline ranging from 10% to 50%, depending on the country. The economy of Ukraine also experienced big difficulties during economic transformations of the 1990s. In particular, the Ukrainian GDP level in 1995 only made up 47,8% compared to 1990 level (1990=100%), and 43,2% in 2000. Throughout the article the comparative analysis of successes and failures of different models of state regulation during economic reforms is performed. The article provides a comparative table of the model for reforming the economy in China and the post-Soviet republics and the countries of Eastern Europe. In conclusions of the article, the author claims that the model of state regulation during economic reforms in Peoples Republic of China has come out to be more effective than the one performed in the ex-Soviet republics and Eastern European countries. The macroeconomic indicators of economic development came out to be much better in Chinese Peoples Republic than in ex-Soviet republics and Eastern European countries. The government regulation in implementing economic reforms in China turned out to be more effective in terms of the economic and social development of the country, compared to the model of reforms carried out in the former Soviet republics and in most of the countries in Eastern and Central Europe, where the role of state regulation of the economy during the economic reforms was insignificant and unsatisfactory.