For Whom The Wall Fell

On the heels of the 25th anniversary of the fall of the Berlin Wall, here’s a sobering post from economist Branko Milanovic of the City University of New York.  He tries to determine which countries have successfully transitioned from communism to capitalism as measured by real GDP per capita.  He concludes that only about 30% of the affected population is living in countries that are catching up to the rich world.  But if you then factor in the transition to democratic government, that fraction falls to only 10%.

The successful transition to capitalism and democracy seems to be taking much longer, generations longer, than expected in the heady days following the fall of the Berlin Wall.

Why?  Well David Brooks at the New York Times offers a couple of explanations in this column, although none of them are very satisfying.

This is a subject worth studying and understanding better.  If we want countries in Africa, the Middle East and other parts of the developing world, to join the so-called developed world, we ought to be able to offer reliable guidance and models for doing so.  The experience of the ex-communist countries seems more a cautionary tale, so far at least.

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