Transition and development: the case of the Lao economy: the contribution of macroeconomic modeling.

Summary The Lao PDR, a Least Developed Country with a complex historical heritage, is adopting socialism to rapidly develop its economy in harmony with its geographical location and social composition. Since the 1980s, the country has undertaken reforms for a market-oriented economic management. These reforms, together with the upheavals in the situation in Eastern Europe, are known as a "transition" process. The country, previously the master of its economic reforms, is subject to international recommendations, brought by the International Monetary Fund and the World Bank, through conditions related to financial contributions. Macroeconomic models accompany these recommendations, which often have mixed and sometimes perverse results, because they are based on an inadequate appreciation of the historical, cultural, social and geographical dimensions of the country. The purpose of our study is therefore to understand the mechanism of macroeconomic modeling in order to better monitor the approach of the recommendations and the evaluation of the market mechanisms. The results of the study provided a better understanding of the discussions on the country's development and possible views for the 2020 horizon. The analysis of the development of the macroeconomic model provides increased knowledge about the use and construction of a macroeconomic model for the country.