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
|On the Privatization of Stolen Goods in Central and Eastern Europe
|Transition: The First Decade
|From Socialism to the Market Economy: Postwar West Germany versus Post-1989 East Bloc