Two periods of economic and political reform have characterized the years since 1983 in Mozambique. The erosion of the state sector constituted the first period from approximately 1983 to 1990, while the transition to private ownership and a market economy after 1990 define the second period. In his study of regime change in transitional countries, Róna-Tas argues that what differentiates the two periods is the source of the change. In the first period, “self-interested individuals pursuing private gain” initiate state sector erosion from below. In the second period, the state generates the transition to capitalism from above primarily “through decisive legislative action with the explicit purpose of creating a market economy.” I adopt Róna-Tas' approach to explain changes in Mozambique's political economy after 1983. The division into two periods is explanatory: it reveals more clearly the sequencing of the reform measures, and it exposes the social pressures that both prompted and frustrated the reforms.

The emphasis in this chapter on social pressures and reform sequencing differs markedly from explanations of events in the 1980s offered by government officials and some scholars.