Edited by Chris Brewster and Wolfgang Mayrhofer
Chapter 24: The Transition States of Central and Eastern Europe and the Former Soviet Union
Michael J. Morley, Dana Minbaeva and Snejina Michailova Since the fall of the Berlin Wall and the attenuation of socialism, two words have become synonymous with the economies of Central and Eastern Europe (CEE) and the Former Soviet Union (FSU), namely ‘transition’ and ‘transformation’. While these terms are sometimes mistakenly used interchangeably as if they signalled the equivalent development, both do call attention to the latent dynamics and complex changes characterising this part of the world. Inherent in the discourse is the notion of an ideological, political, economic and socio-cultural shift. This is not in question. What are, of course, more contested are the nature, speed and substance of the shift and what the eventual outcome might be. Changing economies is complex and not all organisations within a country alter radically or consistently when this country goes through radical changes (Whitley, 1990: 240–241). Waves of progress towards change on some indicators can mask negative consequences on others. For example Kiriazov et al. (2000) demonstrated in their analysis that East European political reforms aimed at improving productivity had in many instances caused decreased output, reduced wage rates, and resulted in more downsizing and increased layoffs. Lane (2007) argues that transition states can be divided into three categories: middle income; low income; and very low income: the former (including for example Hungary and Slovakia) are closest to continental European capitalism, reflecting the pressures associated with joining the European Union and the need to form institutional arrangements that are complementary to their...
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