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  • Understanding Postcommunist Transitions
  • Leszek Balcerowicz (bio)

The specific nature of the transition from communism in Central and Eastern Europe becomes clear when we compare it with other major shifts from one stable state of society to another potentially stable state. Other types of transition include 1) classical transition, meaning the extension of democracy in advanced capitalist countries between 1860 and 1920; 2) neoclassical transition, referring to democratizations in basically capitalist countries after the Second World War (West Germany, Italy, and Japan in the 1940s; Spain and Portugal in the 1970s; some Latin American countries in the 1970s and 1980s; South Korea and Taiwan in the 1980s); 3) market-oriented reform in noncommunist countries (West Germany and other Western countries after the Second World War; South Korea and Taiwan in the early 1960s; Chile in the 1970s; Turkey and Mexico in the 1980s; Argentina in the 1990s); and 4) Asian postcommunist transition (China since the late 1970s and Vietnam since the late 1980s). There is, of course, much internal variety, especially within the first two categories. We will, however, disregard it here in order to focus on the fundamental differences between rather than within the respective types of transitions.

A number of features distinguish the postcommunist transition in Central and Eastern Europe:

First, the scope of change is exceptionally large. Both political and economic systems are affected, and changes in these systems in turn interact with changes in the social structure. All these internal changes [End Page 75] in the respective countries came about due to and in the framework of the dissolution of the Soviet Empire. Most of the post-Soviet countries faced the additional transition problems of defining their territorial as well as social and cultural boundaries, and of building their institutional machineries.1

In all other cases of radical transition, there was either a focus on the political system while the economic system remained basically unchanged (as in classical and neoclassical transitions), or a focus on the economy while the political regime (usually nondemocratic) was unaffected. The unprecedented scope of changes in Eastern and Central Europe means, among other things, an extreme information overload for top decision makers. Errors and delays are hardly surprising, especially since decision makers must work with a public administration largely inherited from the old regime. Massive administrative turnover proved possible only in the former East Germany after reunification, an option obviously not open to other postcommunist countries.

Second, although the changes in the political and economic systems started at about the same time, it is misleading to speak of "simultaneous transitions" in postcommunist Europe. It takes more time to privatize the bulk of the state-dominated economy than to organize free elections and at least some rudiments of political parties. Given the largely simultaneous beginnings of the political and economic transitions, this asymmetry in speed produces a historically new sequence: mass democracy (or at least political pluralism, i.e., some degree of legal political competition) first, and market capitalism later.2

Third, this sequence implies that market-oriented reforms, which must be exceptionally comprehensive because of the socialist economic legacy, have to be introduced under democratic, or at least pluralistic, political arrangements. Most other market-oriented reforms were introduced under nondemocratic regimes (the third and fourth types of transition). Within this group, it is hard to find any case of economic transition that both approached the comprehensiveness of what occurred in postcommunist Europe and was carried out under a democratic regime. Indeed, all the radical economic reforms elsewhere were introduced under clearly autocratic and rather oppressive regimes (Chile in the 1970s, China since the final years of that decade).3 There were some economic reforms carried out under democracy in the 1980s, including privatization programs in certain developed Western countries and stabilizations and structural adjustments in developing economies. Problems attributable to the democratic political environment did arise during these transitions, perhaps warning of similar hazards lurking in the much more comprehensive and complicated transitions of Eastern and Central Europe.

These complications are, of course, far from being a sufficient argument for falling back on authoritarian solutions. This is so not only [End Page 76] because of democracy's intrinsic importance to human dignity...