The interplay between economic and political transition

Abstract

Political transition in the countries of Central and Eastern Europe refers to the movement away from a one-party communist state towards political pluralism, i.e. open competition for votes as the main vehicle for achieving and maintaining power within the state. Economic transition denotes a movement from a socialist economy, a special case of a non-market economic system, towards a market economy with a growing share of private ownership. Economic transition is thus synonymous with a market-oriented reform, a special case of systemic change or institutional transformation. In addition, economic transition includes, if necessary, macroeconomic stabilization.