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This paper investigates the relationship between economic reforms and
constitutional transition, which has been neglected by many transition
economists. It is argued that assessment of reform performance might be very
misleading if it is not recognized that economic reforms are just a small part
of large scale of constitutional transition. Rivalry and competition between
states and between political forces within each country are the driving forces
for constitutional transition. We use Russia as an example of economic reforms
associated with constitutional transition and China as an example of economic
reforms in the absence of constitutional transition to examine features and
problems in the two patterns of transition. It is concluded that under political
monopoly of the ruling party, economic transition will be hijacked by state
opportunism. Dual track approach to economic transition may generate very high
long-term cost of constitutional transition that might outweigh its short-term
benefit of buying out the vested interests.
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