The formerly planned economies generally lack the institutions needed to support an orderly transition to a growing market economy. This transition depends on the establishment of orderly commercial transactions in the markets for corporate control. The minimal set of institutions required should therefore be tailored to limit opportunistic political behavior and to guarantee basic property rights, notably in financial markets.
When identifying the minimal required set of suck institutions, and the authors find that Western market economies are entangles in excessive institutions supporting distributional objectives or vested interests. Hence, the formerly planned economies stand a good chance of improving upon the West.
