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A study of the breakdown of the state socialist system: a systems approach
Author(s) -
Won Lee Kyoung
Publication year - 1997
Publication title -
systems research and behavioral science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.371
H-Index - 45
eISSN - 1099-1743
pISSN - 1092-7026
DOI - 10.1002/(sici)1099-1743(199711/12)14:6<393::aid-sres130>3.0.co;2-o
Subject(s) - socialism , bureaucracy , economic system , state socialism , state (computer science) , socialist economics , ideology , order (exchange) , economics , investment (military) , market economy , political science , capitalism , law , computer science , communism , politics , finance , algorithm
Why has the state socialist system collapsed? This paper argues that the reasons are traceable to the institutional design of state socialism, which provides no capacity for self‐transformation, depletes developmental potential, and curtails system capacity. The state socialist system lacks the ability to "reform itself' in order to improve its adaptive capacity in rapidly changing external and internal environments. All actions meant to fulfil societal aspirations and rational attempts to stimulate economic performance run counter to the ideological foundations of state socialism. Therefore the system lacks the capacity for self‐transformation that is needed to sustain the system in the changing environment. The process of information gathering and allocation of resources based on the bureaucratic mechanism of state socialism curtails the system's ability to enforce its preferences. In addition, the state socialist system features soft budget constraints and an investment hunger mechanism which deplete its developmental potential and make the system lose capacity. Thus this paper suggests that the origin of the breakdown of state socialism should be sought in its institutional design. © 1997 John Wiley & Sons, Ltd.