Event
Political capitalism in Central and Eastern Europe
After their transition, Central and Eastern European (CEE) countries became liberal democracies and capitalist systems, but not without great effort.
Wednesday 8 November 2023
Twenty years since their regime changes, several of the countries in this region have undergone substantial transformation, but stable political and economic systems have failed to emerge.
In this chapter, I explore why this is the case. Drawing on institutional economics and comparative economic theories, I introduce a new typology of Varieties of Capitalism for the CEE region. History and path dependency are also decisive in Central and Eastern Europe: the countries of the region possess a dualistic value system; their informal institutions are characterized by both Western and Eastern values.
Western values are linked to the enlightenment and contain elements of substantive democracy, while Eastern values are the opposite. After the regime changes, Western values became dominant in the region, influenced by the European Union and a rejection of the Soviet past. Even if the transition from communism to capitalism satisfies the indicators laid out by János Kornai, this type of capitalism did not stabilize.
The determinant factor is whether the capitalist system is democratic or non-democratic. Within these two main types, the coordination mechanism distinguishes the capitalist sub-types. In democratic systems, creative coordination is dominant, whereas in non-democratic systems, destructive coordination is.
Presenters: Professor Miklós Rosta (Corvinus University of Budapest)
Host: Dr. Sisi Sung
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