Economic Ideas in the Transition from Communism
- New Thinking in Political Economy series
Chapter 9: Neoclassical Economics, New Institutionalism and the Eastern European Economic Reform Experience
9. Neoclassical economics, new institutionalism and the Eastern European economic reform experience The image of an Eastern European landscape of economic ideas homogenized, stalled and held up under the spell of Western economics has a twin: the image of a rigid and unchanged Western dominant paradigm – the notion of an unmovable, Olympian neoclassical economics, that has reached a stage of mature invulnerability and scientiﬁc rectitude. Yet, a closer look at the conceptual and theoretical dynamics set into motion by the encounter between the neoclassical paradigm and the Eastern Europe reform experience after 1989 tells a diﬀerent story. The limits of policies and approaches inspired by neoclassical economics seem to have invited a challenge from new perspectives. The most inﬂuential of them was the so-called ‘new institutionalism’. And it may be the case that the rise to preeminence of the new institutionalism as a potential challenger to the supremacy of the neoclassical paradigm both in East and West could be in the end the most signiﬁcant epistemic outcome of the reform experience. A very notable episode in the history of economic thought may thus be taking shape: After replacing Marxism in Eastern Europe, neoclassical economics comes to face a paradigm challenge mounted from a perspective that was reinforced and inspired by the accumulated lessons drawn from the encounter between the neoclassical views and the realities of transition. This chapter explores this neglected but intriguing facet of the Eastern European social and intellectual experience. The fact that Western...
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