The Neoliberal Revolution in Eastern Europe

The Neoliberal Revolution in Eastern Europe

Economic Ideas in the Transition from Communism

New Thinking in Political Economy series

Paul Dragos Aligica and Anthony J. Evans

This unique book develops two different but related research agendas: the study of the spread of ‘neoliberalism’ – as seen from the perspective of Eastern European post-communist evolutions; and the study of Eastern European transition – as seen from an ideas-centred perspective. It challenges a series of misunderstandings and myths about the spread of neoliberal economic ideas in Eastern Europe and offers a clearer understanding of progress since market reform began.

Chapter 3: The Remarkable Path to Primacy of Western Economic Ideas: Change and Institutionalization after 1989

Paul Dragos Aligica and Anthony J. Evans

Subjects: economics and finance, austrian economics


Although the process of change of economic ideas in Eastern Europe started incrementally, was slow and had begun long before 1989, that year is probably the most likely date to mark the crucial moment of ‘paradigm shift’ in the ex-Soviet space (Spulber, 1997; Boettke, 1993). The Kaase, Sparschuh and Wenninger (2002) survey of the field reinforces the notion that around that date, a critical mass was created and the change in ideas and beliefs became manifest and materialized in radical political and economic changes. The case of Poland is exemplary in the chronology of the shift of ideas. The Polish developments became a reference point for the reformers in almost the entire post-communist Europe and as such had a great impact on the way reform was thought of in other countries of the Soviet block in the 1990s. The pressure of changes in the political and economic ideas started long before 1981. In 1981, the ‘Solidarity’ program ‘SelfGoverning Republic’ was promoting economic reforms, although all of them were defined ‘within the limits of the general framework of a market socialist economy’ (Kowalik, 2002). And although they ‘were not challenging directly either state property or the domination of the Communist party’, they were a clear signal that the general climate of opinion regarding economic problems and solutions had changed. The Round Table negotiations and the final Agreement pushed the process into an even more radical direction. The Agreement outlined a much more radical, ‘new economic order’. As the Polish economist...

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