The Political Economy of Reforms in Central and Eastern Europe (original) (raw)
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The politics of economic reform in Central and Eastern Europe
1992
The unexpected collapse of communism in Central and Eastern Europe in 1989 ushered in a triple transition: political, economic and social. This course deals with the politics and dilemmas of creating a functioning market economy in the context of dramatic political and social change. In order to appreciate the formidable challenges that the newly democratic regimes were facing at the outset of the reform process, the course first analyzes the economic and political nature of the socialist system, its reform attempts, as well as the causes of its final collapse. The seminar then engages prominent interdisciplinary debates concerning optimal way of "building" capitalism, drawing on literatures from political science, economics and sociology. The debates considered pertain to privatization, restructuring, and the role of the state in the economy and in the transition process. While the readings devote much attention to the domestic politics of economic and state reform, the course also examines the central role that the European Union accession process plays in setting the reform agenda. The final part of the course analyzes the social consequences of economic reform and discusses the institutionalization of social space. Course Requirements 1. Class Participation-20% 2. Reader Responses-35%-one page reflection on the readings (10 required), emailed by 3 p.m. the day before class 3. Country outline and 10 min. presentation in week 4 (group project)-10% 4. Final Research Paper (15 p.) or take-home final exam (12 p.)-35% Readings The following books can be purchased at the Yale bookstore (also on reserve at CCL):
The Political Economy of Reforms: Empirical Evidence from Post-Communist Transition in the 1990s
SSRN Electronic Journal, 2000
Using a novel data set from post-communist countries in the 1990s, this paper examines the linkages between political constraints, economic reforms and growth. Results from a dynamic panel analysis suggest that public support for reform is negatively associated with increases in income inequality and unemployment. In addition, both ex post and ex ante political constraints referring to the extent of public support affect progress in economic reforms, which in turn determines economic growth. These findings highlight that while economic reforms are needed to foster growth, they must be designed in such a way that they do not undermine political support for reform.
We study the dynamics of individual support for changes in the economic and political system, using a unique dataset for 12 transition economies over the period 1991-2004. We document that support for transition was initially lower in the CIS countries and that there has been a converging trend in the support for reforms between the CIS and the Baltic and Central and Eastern European countries. We suggest several explanations for the initial divergence and the post-98 convergence in support for transition between these three groups of countries, and show that economic growth, declining income inequality and improving quality of governance have contributed to increase the support for transition. In addition, we find that increased support for the market economy and democracy in the CIS is accompanied by a larger increase in trust towards the political institutions. Our results also confirm the implications of Aghion et al. (2010)'s model of a negative correlation between trust and the demand for government regulation.
Economic Transformation and Political Stability in East Central Europe
Security Dialogue, 1996
aspired to become members were supposed to converge on EU standards of all types. However, since membership materialised for a group of countries from the Baltics to the Balkans in 2004 and after, economic convergence seems to have been accompanied by political divergence. To describe these trends of political deviation, deformation or even degeneration, the word populism has been most widely used. However, this article argues that populism as an expression has been not only overused but also often unhelpful to explain political developments and causality. In the context of East-Central Europe, it is more productive to focus on economic nationalism and the revival of authoritarian traditions.
Political Determinants of Economic Reforms in Former Communist Countries
SSRN Electronic Journal, 2000
This paper examines how political institutions and electoral outcomes have affected the economic reform process in the post-communist transition countries. Panel data estimations on annual data for 26 transition economies from 1992 to 2006 suggest that the institutional structure of the economy has been of importance, at least for the western-most transition countries. Democratisation and a relatively short exposure to communist rule have been conducive to economic reform, while the timing of elections and whether the government commands a majority in parliament appear to have been unimportant. Governments with right-wing ideology have implemented more market-economic reforms than governments with other ideologies. A high development level but also high inflation have proved conducive to reforms, while unemployment has had the opposite effect.
Eastern European Economic Reform: Transition or Mutation?
Atlantic Economic Journal, 1995
Assessments of postcommunist economic reforms by systems specialists and those stewarding G-7 assistance are sharply polarized. Both acknowledge that official Eastern European data indicate catastrophic falls in GNP far deeper than the Great Depression of 1929 and a myriad of other failures including rampant inflation, anticompetitive abuses, graft, corruption, and the persistence of socialist ownership and controls. But while the former interpret these outcomes as a consequence of the communist legacy and transmuted anticompetitive institutions, the latter in Schumpeterian fashion interpret them as a successful prelude to competitive capitalism, as the postcommunist East traverses the J curve of recovery to rapid modernization. This essay surveys the recent literature and, siding with the systems theorists, explains why the G-7's interpretation of macroindicators is misleading.