The transition from socialist to market economics is typically informed by outcomes-based social welfare theory (SWT). Institutionless, intentionally valuefree SWT is ill-suited to this enterprise. The only evaluative standard to which it gives rise—efficiency—is indeterminate, and the theory is not accommodative of other dimensions of moral evaluation. By contrast, the contractarian enterprise focuses on the role and importance of formal and informal institutions, including ethical norms. Given that individuals should be treated as moral equivalents, the project assigns lexical priority to rights and regards justice as impartiality. This explicitly normative, institutional approach permits analysis of potential conflicts between informal norms and prospective, formal rules of the games. Moreover, it underscores the instrumental and intrinsic value of rights in the transition process. Finally, the emphasis on impartiality—embodied in the generality principle—facilitates analysis of constitutional constraints on behavior that is inimical to the transition process.
Timothy P. Roth, "Contractarian Analysis, Ethics, and Emerging Economies," Journal of Markets & Morality 4, no. 1 (Spring 2001): 55-72