Transforming the Core: Restructuring Industrial Enterprises in Russia and Central Europe


In considering the roadblocks facing transition economies, this text focuses on a vital but generally negected sector- large state-owned industrial enterprises. Even though many of the formerly socialist countries have made significant strides in privatization, they have all found it immensely difficult, both politically and practically, to dismantle large enterprises, given the massive unemployment and economic dislocation that would result. Yet these enterprises constitute a heavy burden on fledgling economies by drawing scarce funds away from profitable investments, notably in the private sector. Comparing four countries that are rarely juxtaposed- Russia, Poland, Hungary, and the Czech Republic (with frequent references made also to China- the authors draw out the important similarities and differences among them and discuss implications for the future. The first systematic, genuinely comparative analysis of the biggest hurdle to the development of true market economies, this study, with its wealth of data and informed interpretation, will be essential reading for students and scholars alike.