Future Prospects for Captured States

Abstract

The 27 post-communist countries have diverged considerably in their progress towards open markets and democracy, but the two dimensions which have perhaps the greatest implication for future prospects are the degree of oligarchic development and the potential for EU membership. These dimensions in fact overlap closely. One group in Central Europe, the Baltics and some of South-East Europe have either already achieved membership as of May 2004, or are in the process of negotiating accession in the near future. Most of them overcame strong rent-seeking and state-capture risks early on, while others like Bulgaria, Croatia and Romania are well on the way to reversing such effects. The transformation in these countries is for all practical purposes complete, any final refinements of market and democratic institutions being more or less assured as EU standards kick in. Their future economic problems are those of middle-income emerging-market economies, plus all that is associated with working in a new enlarged EU. The remaining countries in South-East Europe have been provided a conditional offer from the EU without a clear time-horizon, and while they face the challenge of continuing to move forward in their transformation reducing any remaining state-capture elements, they do this with a strong beacon to motivate the political consensus and the clear guidelines of the Acquis. For them the transformation is not over by any means, but the light at the end of the tunnel is strong and almost certain to grow stronger year by year.

‘Forecasting is very difficult — especially for the future.’

Mark Twain