Annals of Corporate Governance > Vol 4 > Issue 4

Market transition without an accompanying industrial revolution: A reexamination

Satoshi Mizobata, Kyoto Universityy, Japan, Hiroaki Hayashi, Ritsumeikan University, Japan,
Suggested Citation
Satoshi Mizobata and Hiroaki Hayashi (2019), "Market transition without an accompanying industrial revolution: A reexamination", Annals of Corporate Governance: Vol. 4: No. 4, pp 350-373.

Publication Date: 19 Dec 2019
© 2019 S. Mizobata and H. Hayashi
Corporate Governance


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In this article:
1. Introduction
2. Neoliberal transition and the historical perspective
3. Static growth model
4. Distorted class formation and unique middle class
5. Dynamism of innovation and class formation
6. Conclusion


After thirty years, almost all post-communist transition have undergone neoliberal reforms. Their transition policies aimed to liberalize, resulting in further, institutional adaptation and building on the principle that functioning markets constituted market transition. Under this process, the growth model has been biased towards a model dependent on modern capitalism. This is why neoliberal reform has had the effect of competitive signaling. As the process did not place greater emphasis on productive forces, the process may be regarded as a transition without industrial revolution and, therefore, a ‘static transition’. At the same time, the new private players neither conceived nor implemented a sound formation process under the static transition. There were few changes in class structure, and people continued to hold conservative values. However, as transition economies have progressively experienced reform, and as the developed economies have faced the new industrial revolution, the transition strategy has also required the adoption of a new growth model. Some countries have been compelled to adopt innovation. The class structure has also become similar to that under a capitalist model. The market transition without industrial revolution has become a ‘normal’ transition.