Abstract
This chapter presents basic statistical facts on the process of transformation in Central and Eastern Europe over thirty years. The presentation is intentionally descriptive, to be as neutral as possible. Several measures of performance since about 1990 are reviewed including GDP, direct consumption measures, the Gini coefficient and the Human Development Index. The paths of economic reforms and democratisation are also traced. Overall, we present eleven stylised facts, three of which stand out: virtually all communist countries have changed considerably and have integrated significantly into global relations; in the first decade all suffered considerable decline of output, living standards and widening of income distribution; however, the length of the deterioration, its extent and the eventual improvement varied considerably, with Central Europe generally doing better than the former Soviet states.
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Notes
- 1.
The World Bank’s World Development Indicators.
- 2.
A partial exception is Turkmenistan where it is still not easy to obtain an exit visa—though it is far better than earlier. However, its international l trade and investments have become substantial.
- 3.
- 4.
Kornai (1994) discussed why this decline was inevitable to allow inefficient firms to either adjust or be replaced by new ones.
- 5.
Only Tajikistan saw a slight decline perhaps due to the persistent civil conflict.
- 6.
Apart from the problem of GDP_NMP bias, such estimates vary among the literature sources used.
- 7.
For those interested, Novokmet in this volume brushes on the subject.
- 8.
The values are not actual averages, just rough approximations to represent the pattern. ”Actual” values and averages in Table 11.2 are based on one source only—The World Bank. Other sources tend to have higher values for FSU countries.
- 9.
The literature on this is reviewed in Havrylyshyn (2020, chap. 2).
- 10.
Though unofficial estimates for the Soviet Union were often higher in the mid-twenties, as shown in Havrylyshyn (2006, chap. 3).
- 11.
Most of the estimates shown are from the World Bank data base; it should be noted that for two cases, Russia and China, other estimates by individual scholars and the CIA typically show higher values, in the forties rather than the high thirties for the latest years.
- 12.
The CIA factbook estimates a higher value of 0.41.
- 13.
In Havrylyshyn (2020) I discuss why these short-form labels are unfortunate because they mislead a great deal. This is not the place for an elaboration, but a brief explanation is worthwhile: capitalism, neo-liberalism, Smith’s invisible hand principle are too often conflated without considering if the functioning of the market is competitive or dominated by oligopolists, oligarchs or other powerful vested interests. Even the best-known critics of neo-liberalism in their recent writings, for example, Stiglitz (2019) and Milanovic (2019), emphasise that properly competitive market economies can lead to a “good” capitalism different from what they judge the current form of capitalism to be in practice. I therefore prefer using the longer label: competitive market capitalism.
- 14.
Recent non-quantified reporting on Uzbekistan and to some extent Belarus does suggest some further progress since 2016.
- 15.
Havrylyshyn (2020).
- 16.
At least one country, Estonia, has exceeded the 4.0 value.
- 17.
- 18.
Hartwell’s (2013) book explores in detail the Kolodko thesis and concludes it was not the case that the International Financial Instituions (IFI) focus was solely on liberalising, nor did it have the consequence of delaying institutional development in the rapid reformers.
- 19.
Its late catch-up is even more evident in the indicators for corruption discussed later—the Corruption Perceptions Index, moving from 134th position in 2004 to 51st in 2012, ahead of even some EU countries.
- 20.
Until 2004, Transparency International did not have enough information to properly evaluate Turkmenistan—the FSULAG average was for the other two countries and both had better values.
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Havrylyshyn, O. (2021). Thirty Years of Transition: Eleven Stylised Facts. In: Douarin, E., Havrylyshyn, O. (eds) The Palgrave Handbook of Comparative Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-50888-3_11
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