Why has Eastern Europe all but abandoned its capitalist ideals of the early 1990s? Although pro-capitalist on the surface, many of its reforms undermined a transition to capitalism by creating fear and uncertainty, thereby raising transaction costs and alienating bureaucrats and retirees-obstacles that might have been avoided had reformers emphasized the need for stable, pro-market legal systems compatible with prevailing cultural norms.


Other Independent Review articles by Svetozar Pejovich
    Fall 2005   On the Privatization of “Stolen Goods” in Central and Eastern Europe
    Summer 2003   Transition
    Summer 2001   From Socialism to the Market Economy