This chapter focuses on the rise and fall of pyramid schemes in Albania during the tenure of Sali Berisha. Since 1992, the Albanian government had followed a policy of price liberalization, reductions in government subsidies, and inflation control. The formula was initially successful, earning for Albania accolades from International Monetary Fund (IMF) and World Bank officials. It turned out that the government manipulated the data, and accurate data collection was complicated by the privatization of farms and cooperatives. Furthermore, Albania’s economic growth, if indeed it was phenomenal, was less impressive when compared to the past. The IMF and World Bank overlooked these essential facts and chose to concentrate on immediate success without addressing structural flaws. This chapter examines how pyramid schemes—led by former army officer Rrapush Xhaferri—were born in Albania, Berisha’s support for the schemes, and the schemes’ collapse.
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