[2] See the discussion of the evidence in Hernandez-Cata (1991) and of some of the institutions in Betancourt and Kiguel (1989).

[3] While they continue to emphasize the role of technology, they begin to allow a role for institutions by arguing for persistent heterogeneity in ex-post realizations of technological shocks due to this factor.

[4] In a recent paper Oi (1990) asks the question what is the output of a retail firm and comes up with a list that is easily reconciled with these five categories.

[5] This is an act limiting the size of retail space in different areas.

[6] There are other aspects of the design of a constitution very relevant for the present context but I will leave it to the reader to consult Mueller's paper and the literature cited therein.

[7] Announcement of a restitution policy is a powerful signal in this context but it is not the only one. Other signals, however, are less convincing and have different incentive and growth effects, for example exemptions from the country's labor or environmental legislation.

[8] For instance in the Czechoslovak case former owners and their heirs are not supposed to receive the benefits of improvements made over the last 30-40 years and the implementation of this rule generates another source of uncertainty and the need to ascertain the value of these improvements.

[9] There are numerous squatter settlements in the market economies of Latin America where the capitalist state has implicitly decided not to incur the transactions costs of enforcing the property rights of formal title holders. The uncertainty of these property rights makes this alternative at most a second best policy.

[10] For instance, under most conceivable schemes a significant part of the additional taxes necessary to undertake the financial compensation would have to be borne by future generations.

[11] Those interested in a detailed discussion of other economic issues that arise in the early stages of a transition from socialism are referred to the introduction to a set of conference papers on the transition in Poland, Hungary and Czechoslovakia, Clague (1991), and to the other papers presented at these meetings