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Background November 13, 2019
Managing the Crisis
BTI Board
Carl Bertelsmann Prize 2001
Transformation Thinkers

In the last decades, several states have set out to change toward democracy and a market economy. Whereas this wave of democratization has led to a number of successes in transition, the ideal of a democracy based on the rule of law and a market economy flanked by sociopolitical safeguards has yet to become a global standard. While many nations continue to face crucial challenges in development and transformation, others remain resistant to change despite considerable efforts or have yet to invoke change at all.


The Bertelsmann Stiftung believes that of all regime frameworks, a constitutional democracy combined with a socially responsible market economy best facilitates social cohesion. The project therefore asserts these goals as its underlying normative guidelines. Bringing about democracy and a market economy is not simply a question of political will, but requires as well the ability to overcome substantial political, economic and socio-cultural obstacles. Consistent strategic management and the effective use of resources are necessary prerequisites to success.


The experience of previous transformation processes shows that there are a number of possible paths to democracy and a market economy. Certainly, democratic and economic reforms have, in most cases, mutually supported one another. There are cases, however, in which economic reforms have either preceded or succeeded the political reforms. Both routes can also lead to success. Nevertheless, it is clear that the expansion of freedom of choice in each phase of transformation points a country in the right direction. The guarantees of the rule of law provide a framework in which this expansion is made possible.


Good governance is the key variable in implementing reform goals. While the transition to democracy and a market economy can take many forms, the success of each is dependent upon actors capable of guiding the process as effectively as possible by means of good management. Governments and other actors must be determined in the pursuit of their goals, use their resources prudently and effectively, combine the capacity to govern with consensus-building and cooperate with external organizations of support. Astute transition management is essential to bringing a country closer toward the goal of a constitutional democracy and a market economy flanked by sociopolitical safeguards.

©2009 Bertelsmann Stiftung
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