GAAMA: a new perspective for emerging markets.

• Author: Boyko, Stephen A.
• Position: Global, asynchronous, asymmetrical, market activity

Abstract

The end of the Twentieth Century witnessed seismic societal shocks for approximately one-third of the world's population who lived under totalitarian political regimes and communist economic systems. However, what Western policymakers perceived as an opportunity for a quick and robust transformation to a market economy has produced mixed results.

To this point, the GAAMA symposium provides a new perspective for understanding why the economic development of some of the post-Soviet successor states has been slower than and less than expected. GAAMA is an acronym for global, asynchronous, asymmetrical, market activity. The symposium consists of three related papers that examine:

1. GAAMA metaphysics--to define the governance structure of the former Soviet Union as a "failed firm" NOT an "inefficient market;"

2. GAAMA metrics--for better management of far-from-equilibrium conditions that are omnipresent in transitioning economies; and

3. GAAMA governance--to identify firm-market incentives that are prerequisites for commercial viability.

GAAMA metaphysics posits that suboptimal GDP growth is, in part, attributable to the misdiagnosis of the former Soviet Union's governance structure as an "inefficient market" rather than a "failed firm." Markets are economic organizational structures that effect transactions for goods and services through a negotiated bid-ask process. Firms, on the other hand, are non-market solutions whose marketing departments set prices for the goods and services that they offer. There were very few goods and services that were obtained through a negotiated process in the former Soviet Union's planned economy. Employing market protocols of regulation and infrastructure to remedy firm maladies added complexity to the preexisting Byzantine structure. The misdiagnosis of the initial condition created false constructs and unintended consequences for both the supply and demand functions of the post-Soviet successor states' transitioning economies.

The metrics paper introduces the GAAMA Model as a blueprint for the better management of the former Soviet Union's transitioning economies. GAAMA results in a far-from-equilibrium condition caused by standards that are either too high or too low, interacting with too many or too few rules for a given level of commercial activity. The Soviet Union experienced a systemic failure caused by bad policy (i.e. the standard of full employment at any cost) that was uniformly...