(ProQuest: ... denotes formulae omitted.)IntroductionSince gaining its independence in 1991, Azerbaijan has started implement marketoriented policies. The transition the new political-economic order has not been smooth, but instead accompanied by political cataclysms and military conflicts. The World Bank classified Azerbaijan as a war-torn country with a semidemocratic political regime.1The literature on the political economy of transition has grown considerably in the last decade because of the reality of the problem and uncertainty about the future of reforms throughout the former Soviet states. Various concepts of interconnection between politics and economic reforms have been developed and regional and country explanations of the transition of post-Communist countries.The first question I discuss in this article is: What does market reform mean? Because of Shafiqul Islam's clear explanation of the market-reform process, I will follow his theory, which claims there are four in the transition vehicle: macroeconomic stabilization, liberalization, privatization of the economy, and development of marketsupporting institutional infrastructure.2 The last he grouped together under the label of marketization. He also discusses other concepts and theories of political economy of post-Communist transition.However, I focus on how political changes have affected the process in Azerbaijan during The trajectory of the post-Communist transition in Azerbaijan can be roughly divided into stages: (1) first years of independence (1991-94), the state of nature; (2) powerful autocratic regime and stabilization (1994-2003), the state of Heydar Aliyev; and (3) Heydar Aliyev's death and the election of his son Ýlham Aliyev as the new president (post-2003), the post-Heydar Aliyev state. I review all stages of political development in Azerbaijan and their effects on reforms, particularly the marketization process. Measures of nominal political stability and reforms are obtained using the mix of qualitative and quantitative methods and then analyzed. In the end, I show how the centralization of power was helpful in one dimension of reforms-stabilization-but has been an impediment for the other dimension-marketization. Moreover, this article claims that once centralized, it is extremely difficult for a political-economic system in transition undergo decentralization.Finally, I propose and discuss further public policy steps and examine the three I's approach addressing issues of a post-Communist transition.The Political Economy of Post-Communist TransitionFirst, we must define market reform and transition. According Adam Przeworski, market-oriented reforms are reforms that aim to organize an economy that rationally allocates resources and in which the state is financially solvent.3 Islam highlights four interlocking wheels of market-oriented reforms: macroeconomic stabilization, liberalization, privatization, and institutional reforms.4Joan Nelson has examined an unprecedented case of simultaneous economic and political transformation that has characterized transitional reforms.5 All newborn countries have had pass through this dual transformation, but each has chosen various policies and has had different results. In short, economic reforms progressed successfully in countries where wealth was distributed more or less equally and there was political consolidation within the society.6These issues have do with the role of ex ante and ex post political constraints in the transition experience. If the former deals with the feasibility and acceptability of reforms, the latter refers the danger of backlash and reversal after decisions are made and outcomes are observed.7 Joel Hellman argues that although post-Communist countries have not suffered from the standard ex ante and ex post constraints reform, they have faced an equally difficult set of challenges from an unexpected source; the political obstacles were the most challenging. …
Fuad Aliyev (Tue,) studied this question.