Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of boxes
- Preface
- Introduction
- 1 The economic factors in the collapse of state socialism and the new international environment, 1973–1989
- 2 Radical transformation and policy mistakes: dramatic economic decline in the early 1990s
- 3 Toward better times: the European Union and its policy of eastward enlargement
- 4 Recuperation and growth: the role of foreign direct investment
- 5 Economic restructuring: transforming main sectors, economic recovery, growth, and weaknesses
- 6 Transformation and social shock
- 7 Lasting changes in the structure of income, employment, welfare institutions, education, and settlement
- 8 Epilogue: the future of catching up in the European “melting pot”
- Bibliography
- Index
2 - Radical transformation and policy mistakes: dramatic economic decline in the early 1990s
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- List of figures
- List of tables
- List of boxes
- Preface
- Introduction
- 1 The economic factors in the collapse of state socialism and the new international environment, 1973–1989
- 2 Radical transformation and policy mistakes: dramatic economic decline in the early 1990s
- 3 Toward better times: the European Union and its policy of eastward enlargement
- 4 Recuperation and growth: the role of foreign direct investment
- 5 Economic restructuring: transforming main sectors, economic recovery, growth, and weaknesses
- 6 Transformation and social shock
- 7 Lasting changes in the structure of income, employment, welfare institutions, education, and settlement
- 8 Epilogue: the future of catching up in the European “melting pot”
- Bibliography
- Index
Summary
Deregulation and macroeconomic stabilization
The countries of Central and Eastern Europe began in the 1990s to transform economically as well, based on – and in parallel with – their political transformation from one-party, non-parliamentary regimes to multiparty, parliamentary democracies. The former state socialist countries hurried to eliminate the failed economic system based on state ownership, planning, strict central regulations, and in most cases collectivized agriculture. Changes were patterned on the Washington consensus guidelines, and the newly elected governments rushed to build a capitalist market system overnight. Other concepts and recommendations for transformation were not seriously considered and were almost universally rejected. The new elite believed that speedily copying the West would open the door to joining Europe almost immediately.
The Poles thought that the West bore a “moral responsibility” to reward them for their role in eliminating the Soviet danger. The Czechs believed they genuinely belonged to the West, and Václav Klaus often pointed to the map, noting that, geographically, Prague is more Western than Vienna. The Baltic peoples rediscovered their Nordic–Scandinavian connections. The Yugoslavs were convinced that their international recognition and historical advantage in reform would pave the way for an easy transformation.
Socialist economic planning, state control, and regulations were rapidly abolished. New laws brought about deregulation. The constitutions were either amended or new ones enacted by the new, freely elected parliaments. Private ownership was reestablished, and the road was opened for private business. State interference was significantly decreased.
- Type
- Chapter
- Information
- From the Soviet Bloc to the European UnionThe Economic and Social Transformation of Central and Eastern Europe since 1973, pp. 50 - 78Publisher: Cambridge University PressPrint publication year: 2009