WHY ECONOMIC REFORM WAS INITIATED



EXPLANATION #1: Economic crises caused reforms.

The greater the economic crisis, the greater the tendency to initiate reform.

Problems:

(1) Long time lag between the time leaders realize there are economic problems and the initiation of reform.

(2) Initial responses to economic problems were not reformist.

(3) If economic problems led to reform, then the country in the worst economic position should initiate reform. China initiated reform before the Soviet Union, but its economy was better off comparatively.