Transition economy - the state of the economy in the transition from one economic development system to another, which entails a change in its foundations, forms of relations between economic processes, interactions between individual economic entities, and a change in ownership types.
The transition economy as a system is characterized by the following features: the beginning of the formation of a new economic system, multistructure, development instability, and the duration of the transformations.
There are several types of transitional economic conditions . First of all, this is a transition from capitalism to socialism in a radical form. An example of this option is the USSR from 1917 to 1930. This time was characterized by the revolutionary replacement of capitalist relations by socialist relations and the transformation of the economy into a unified command system. The role of the state was manifested in the dictatorship of the proletariat.
Another variant of the transitional economy is changes in the ways of its coordination. An example is the change in regulation of the economies of Western countries after the end of the Great Depression. Economic systems have not changed, but the principles and fundamentals of economic regulation have become new.
The third option that a transitional economy can take is the elimination of economic deformations caused by internal or external causes in countries formerly colonies. In this case, the basis for an independent economy is being created, accompanied by the elimination of backwardness in the social infrastructure. But this option is accompanied by political instability.
The fourth option is to overcome instability in the economy, as in the countries of the Latin world, when it is necessary to overcome financial dependence and an imbalance of macroeconomic proportions.
The fifth option is specific forms of transition economies of the former countries of the socialist camp. This period of the economy is called the intersystem transition. This type includes the transitional economy of Russia.
Features of the Russian economy in transition are as follows. The modern economy of the country is moving from a pure system of organization of the economy to a mixed one. Now the Russian economy is faced with the task of restoring the multistructure of the economic system with a variety of socio-economic relations .
The Russian economy is characterized by a departure from social paternalism and total social guarantees to a market economy. The transformation of the Russian economic system began in the conditions of the collapse of the USSR, which was also accompanied by the collapse of political ties, and, consequently, economic ties with other countries, which until then had been linked by the Council for Mutual Economic Assistance. Thus, changes in the Russian economy are geopolitical.
During its formation, a transitional economy of a socially oriented type requires the implementation of such measures. First of all, it is the liberalization of prices, foreign economic relations, and economic ties. Further, structural transformations are needed in the form of privatization, demonopolization, privatization, and creation of a competitive environment.
The institutional transformations that the economy of this stage requires are the creation of a market infrastructure, training personnel for the market, and the formation of new legislation.
To form a social orientation, the necessary measures are: assistance to vulnerable groups of the population, creation of a social protection system of a new level.
The transformation of the structure of the national economy requires conversion, the introduction of structural transformation programs for regions and industries, and the stimulation of progressive industries.
One of the main requirements for the state in the transition economy is the requirement of privatization and the formation of a full range of different types of property relations.