Persistent Economic Divergence and Institutional Dysfunction in Post-Communist Economies: An Alternative Synthesis

Abstract

This paper seeks to explain the continuing lack of economic convergence and the persistence of market dysfunctionality, or wild capitalism, in post-communist transformation. An overview of key statistics on economic convergence and market failure are presented. The paper then analyses the causes of malaise through the lens of institutionalist and radical perspectives. In doing so key data are assembled and presented from documents of the international financial institutions and other agencies monitoring crime and corruption. The paper concludes that, rather than encourage convergence and tame dysfunctionality, neoliberalism and its offspring of labour market reform have created the conditions for continuing economic divergence and for wild capitalism to survive and thrive.