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AbstractThe transition from plan to market was the largest natural experiment in economics ever. Now, 20 years from the start of transition, all former socialist countries are market economies at the middle stage of economic development, and convergence with neighbours, if not with the developed world, is largely achieved. With hindsight, it is clear that economists have spent too much time debating proper sequencing of reforms and the fine‐tuning of reform packages. At the same time, the magnitude of the output and consumption fall in some countries was vastly underestimated, while the benefits of reforms have taken longer to materialize than expected. Successful practitioners of reform praise perseverance during and after the initial setbacks and willingness to make political compromises. At the conclusion of the natural experiment, transition economics has all but vanished as an academic discipline, although it played a crucial role in the formation of modern political economics.

AbstractFree and fair elections are the cornerstone of a democratic system, but elections are common in other regimes as well. Such an election might be a pure farce, with the incumbents getting close to 100% of the vote. In other instances, incumbents allow opposition candidates to be on the ballot and run campaigns, limit electoral fraud, e.g., by inviting international observers, all to make elections appear fair. In our model, the incumbent is informed about his popularity, and having a fair election allows him to signal his popularity to the people. After casting their vote, heterogeneous citizens decide whether or not to participate in a protest, and they are more willing to do so if they expect others to protest as well. We demonstrate theoretically that regimes that have a high level of elite repression are less likely to have fair elections, but regimes with a high cost of protesting for ordinary citizens make fair elections more likely.