The Capitalist Revolution in Eastern Europe A contribution to the economic theory of systemic change

The Capitalist Revolution in Eastern Europe

This is one of the first monographs written on post-Communist transition without aiming at providing policy advice, normative views or ad hoc generalizations of a single country experience, by a single author from within the region. Published by what has developed one of the most efficient and prestigous non-university private publisher for academic output, the volume attempts to elaborate a comprehensive – though not holistic – economic theory of systemic change. It focuses on peculiarities of systemic change in central and eastern Europe making it dissimilar from large scale insitutional and policy reforms elswhere in the globe. The book is an attempt to merge region/area specific knowledge with general insights from mainstram policy analysis and suggestions of IFIs. It also attempts to feed back the regional experience into general economic thinking in terms of neoinstitutionalism.

One of the lasting insights of the book is that standard economic analyisis, if applied with careful in-between steps of medium range theories, is indeed able to analyze and interpret historically unique and non-replicable phenomena. In order to succeed in this it is necessary to avoid mechanistic and simplistic approaches having dominated contemporary policy analyses, as well as doctrinaire approaches disregarding the context of application, thus misrepresenting the mainstream. In order to have a fruitful synthesis, the book argued, it was necessary to change the focus of manistream economics, since some of its core concepts, such as optimalizing, exclusive reliance on quatitative indicators, coherence as the sole success criterion and the disregard for institutional conditions of applying theoretical insights. These, especially in the policy-making areana might be misleading /not only in this particular context/.

By contrast, solid financial institutions, transparent regulation, ensuring contestability of markets and regulation enforcing civilizatory norms in the market contest, together with due regard for social norms and other informal institutions may lead to a productive approach. Quality rather than speed is therefore the decisive success indicator, therefore any indicators of change must be interpreted with a grain of salt. Assistance of the EU as well as FDI may only complement, however not replace efficient and socially accepted domestic rules of the game and savings that may thus be mobilized.

Revolution, as figured in the title, is shown to be a feature of qualitative change rather than bloodshed. The book argues that changes, at least in central Europe, do stand up to this quality /against contemporary alternative suggestions, such as refolution, third way and local brand of capitalism, let alone a mere change of the facade, or the stealth of the revolution/. The varied, and often unsuccessful experience in the 30 or so post-Communist countries, compounded with the shocks of the 1997-99 east Asian and Latin American financial crises and contagion, have indeed contributed to a turn to appreciating the role of institutions in standard economic analyises, and the book might have contributed to this more balanced approach.

Publisher: Elgar

Year: 1995

Number of pages: 345

ISBN: 1 85278 672 8


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The Capitalist Revolution in Eastern Europe