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The transition in Eastern Europe and the former Soviet Union: some strategic lessons from the experience of 25 countries over six years

Chapter

Abstract

The second half of 1989, with the fall of the Berlin wall and of a number of communist governments, brought dramatic developments in the process of collapse of the communist system in Eastern Europe and the Soviet Union. The economic transition from the command to the market economy began in earnest in the late 1980s with the Balcerowicz reforms in Poland and the gradual market reforms in Hungary. The end of the Soviet bloc as an integrated economic unit was marked by the historic meeting of the Council for Mutual Economic Assistance (CMEA or Comecon) in Sofia in January 1990 and its decision that trade should be conducted in hard currency and based on world prices. The Soviet Union itself collapsed as an entity following the unsuccessful coup attempt of August 1991 (by the end of that year Gorbachev had resigned as President and the Soviet Union ceased to exist) and in October 1991 the President of Russia, Yeltsin, announced a drastic economic reform programme, under the Gaidar team. Thus the momentous events of these extraordinary two years embodied four inter-related and fundamental elements: the arrival of political democracy; the disintegration of an empire; the collapse1 of an economic bloc; and the launch of the transition. Any attempt to understand the economic aspects of transition in the region must clearly take account of this broader context and the interrelation of these elements.2 It must also take account of the different countries and the differences in the nature and timing of the reform and stabilization programmes.

Keywords

Foreign Direct Investment Corporate Governance Market Economy Financial Institution Transition Economy 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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© Springer Science+Business Media New York 1997

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