The need for a new theory of economic reform

Debate regarding key factors determining the success or failure of policies of liberalization and privatization, illustrates the need for a concise theoretical foundation to guide decision makers as to how, when, and where to apply policies that change underlying economic structures. This paper outlines such a framework, which is based on the perception of gradations in the process of development. It also argues that the introduction of new ownership structures, market mechanisms, and financing techniques are not necessarily solutions without providing for changes in economic, societal, and legal infrastructures.