The Two Transitions in Central and Eastern Europe as Processes of Institutional Transplantation

Abstract

In the euphoria of the early 1990s the former socialist countries of Central and Eastern Europe (in the following: CE and EE) were generally expected to quickly turn into democracies with market economies. The experience of the last 15 years, however, has shown that only some of them (the Baltic States, Poland, Hungary, the Czech Republic, Slovakia and Croatia) have done so. With Russia, Belarus, Bulgaria, Moldavia, the Ukraine, Romania, and Serbia and Montenegro it is not yet clear where the journey goes. The increasing gap between the two groups of transition countries with regard to both their economic and political orders (see Kitschelt 2003) cannot be explained by their different starting conditions after the breakdown of the Soviet Union alone.' Rather it also has its causes in the cultural and historical circumstances shaping their particular traditions and societal environments. The experience of transition has strongly challenged the neoclassical paradigm (see Murrell 1991), and it has led to a growing awareness of the role of informal institutions in the process of institutional change, not only in institutional and evolutionary economics, but also increasingly in the mainstream. In view of the variety of transitional trajectories, the countries of CE and EE are now sometimes seen as prime examples of historical path dependence with the performance of individual countries dependent on informal rules carried over from the pre-communist past (Winiecki 2004, 143). As much as the idea of path dependence has contributed to a better understanding of transition in CE