The transition from socialism to capitalism in former socialist economies is one of the main economic events of the twentieth century. Not only does it affect the lives of approximately 1.65 billion people, but it is contributing to a shift in emphasis in economics from standard price and monetary theory to contracting and its institutional environment. Economic research in transition shows not only that institutions matter but also how their evolution toward higher efficiency depends on initial conditions and on sustained political support.
In Market Institutions in Sub-Saharan Africa, Marcel Fafchamps synthesizes the results of recent surveys of indigenous market institutions in twelve countries, including Benin, Ghana, Kenya, Madagascar, Malawi, and Zimbabwe, and presents findings about economics exchange in Africa that have implications both for future research and current policy. Employing empirical data as well as theoretical models that clarify the data, Fafchamps takes as his unifying principle the difficulties of contract enforcement.
Markets are one of the most salient institutions produced by humans, and economists have traditionally analyzed the workings of the market mechanism. Recently, however, economists and others have begun to appreciate the many institution-related events and phenomena that have a significant impact on economic performance. Examples include the demise of the communist states, the emergence of Silicon Valley and e-commerce, the European currency unification, and the East Asian financial crises.