Post Keynesian economic analysis recommended a different reform program for transition economies than the orthodox model in the form of shock therapy implemented and imposed by the Washington consensus. In contrast to the dominant view, Post Keynesians recommended gradual price liberalization, which involved maintaining fixed prices and wages and subsidies, the establishment and maintenance of buffer stocks, government intervention to stimulate investment and incomes, and industry-incomes policies. With regard to monetary policy, Post Keynesians argued that a discretionary monetary policy was essential to reduce unemployment. With respect to fiscal policy, budget deficits were essential to maintain full employment.
A political economy approach to the transition process required the incorporation not only of the economic structure but also of the political and ideological structures. Consequently, an application of a political economy methodology to the transition process gives rise to alternative models of transition. Each model confronts the elements of the transition process - economic analysis; what is a good society? speed; political structure; ideological structure and whether the initial conditions were a concern - with different solutions, making it meaningful to distinguish between alternative models.