National ideology, public policy, and the business environment: A contingency approach to economic reform in Hungary, Poland and Eastern Europe

Abstract

This paper proposes a contingency approach to economic reform in former Eastern bloc countries. In contrast to the standard view suggesting that market economies are the only viable alternative to command economies, this paper presents three alternative models of capitalism and offers a contingency approach to economic reform. The contingency view suggests that Eastern European countries should adopt the capitalist economy type that (1) best matches their capital and labor market structures; (2) is most consistent with their national history; and (3) best matches their economic development goals. Hungary and Poland are used to illustrate the efficacy of the proposed contingency framework.