Transitions to Capitalism and Democracy in Russia and Central Europe: Achievements, Problems, Prospects

By M. Donald Hancock; John Logue | Go to book overview

POSTSCRIPT
Domestic Reform and Transnational Support

John Logue and M. Donald Hancock

The integration of Central and Eastern Europe into the Western European economic and security systems depends on the success of ongoing economic and political transitions in the region. That process, as our authors have demonstrated, has been genuinely messy. At the time of the opening for reform in 1989, no working models existed for transforming sclerotic, state-owned planned economies into efficient privately owned market economies. The predominant neoliberal ideological paradigm offered more panaceas than practical guidelines for successful reform.

Economic transformation in Central and Eastern Europe remains partial and problematic. The farther east one goes -- and farther away from the integrated market and coordinated economic and monetary policies of the European Union -- the more partial and incomplete such transformation becomes. Clearly, Russian economic reform has been the most problematic of the national cases treated in this volume. The depth of the protracted decline of the Russian economy and the growing poverty of the majority of the population are virtually unparalleled in the experience of the industrial world (except in the case of war). Still, even the Russians continue to muddle forward, and in the midst of the economic gloom there are success stories like that of Elinar.

Several important lessons from the single-country and comparative analysis in this volume are worth noting: The first is that economics has much more to do with cultural and psychological attitudes than is generally acknowledged in most textbooks. Western homo economicus took nearly two centuries to evolve and cannot simply be summoned by chanting "private market economy" while invoking the names of Milton Freedman, Margaret Thatcher, and the International Monetary Fund (IMF).

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