Handbook of Transformation to Market Economy

By Bibek Debroy

Summary

Handbook of Transformation to Market Economy is a single-author primer by the economist Bibek Debroy, published in 2008 by liberal Verlag GmbH (Berlin) in the Friedrich Naumann Stiftung’s ‘Ideas on Liberty’ series. In the rendered pages — the front matter and the opening two chapters — Debroy sets out what a market economy is and how economic freedom is to be understood. The first chapter, ‘Types of Economies and a Market Economy,’ argues that a market is not a physical place but a notional space governed by institutions, and that real economies sit on a continuum between pure-market and pure-planned poles rather than in a binary. It introduces the laissez-faire tradition of the eighteenth-century French physiocrats and analyses how unrealistic rules and regulations enlarge the informal and black economy, citing Fraser Institute and Friedrich Schneider estimates that informal segments account for large shares of GDP across world regions.

The second chapter, ‘Freedom and Economic Freedom,’ in the rendered pages distinguishes negative from positive rights. Debroy treats negative rights — security, liberty of belief and movement, due process, equality before the law — as the core of freedom captured in legislation up to the Universal Declaration of Human Rights (1948), and questions the status of the positive ‘economic and social’ rights (to education, health-care, livelihood, paid leave) that the same Declaration also enumerates. The handbook’s larger apparatus, visible in the Contents, is a survey of governance and economic-freedom measurement: chapter 3 catalogues indices such as the Bertelsmann Transformation Index, the Press Freedom Index, Freedom House, the World Bank and Transparency International, and chapter 4 turns to the Fraser Institute’s Economic Freedom of the World — but these chapters fall past the rendered pages.

Key points

• Single-author economics primer by Bibek Debroy, published 2008 by liberal Verlag (Berlin), ‘Ideas on Liberty’ series, ISBN 978-3-920590-25-7.

• Chapter 1 frames a market economy as a notional, institution-governed space, with real economies on a continuum between market and planned.

• Traces laissez-faire to the eighteenth-century French physiocrats and argues unrealistic regulation grows the informal and black economy.

• Cites Fraser Institute and Friedrich Schneider data on the size of the informal economy across regions.

• Chapter 2 (rendered) distinguishes negative rights (the core of freedom) from positive economic/social rights.

• Reads the 1948 Universal Declaration of Human Rights as mixing negative rights with contested positive ones.

• Per the Contents, later chapters survey governance and economic-freedom indices (BTI, Press Freedom Index, Freedom House, World Bank, Transparency International, Fraser Institute) — not in the rendered pages.

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