Abstract:
Radical upheavals in the former centrally planned economies over the past one decade present major challenges to social scientists and policy makers to formulate a viable strategy for transition to a free market democracy based on private initiative and individual freedom. After the initial euphoria over transition to a capitalist economy, the 3 billion people of the former closed economies are now slowly realising that the process of transition cannot be left only to individual initiatives alone. Majority of the reformist leaders in these countries have now also understood the fact that over the long term economic prosperity must flow throughout society in order to sustain and strengthen their nascent democracy. To ensure equitable distribution of the benefits of growth, policy makers have no option but to base their economic growth strategies on incentives for small and medium enterprises.
