Financial institutions and the financial crisis in East Asia

Abstract: We draw from recent work in organization theory to explain the di!erences in reform strategies between China and Eastern Europe. An experimentation approach was adopted in China whereas a big bang approach was more favored in Eastern Europe. The  explanation is based on di!erences in the organizational structure of central planning: U-form in Eastern Europe and M-form in China. The M-form is more fexible because it makes local experiments possible, contrary to the U-form where this would give rise to major complications in coordination.

Financial institutions and the financial crisis in East Asia.pdf