Post-Socialist Transition and Environmental Protection

This article examines the institutional characteristics of market and centrally planned economies and their impact on the environment. It argues that while the planned economies are utilising market mechanisms in environmental protection, their market counterparts are facing more and more environmental problems that require governmental intervention. Using the latest statistical information, the records of sulphur dioxide emission under market and planning over the past twenty years are compared. The findings show that while planned economies generated more pollution due to energy inefficiency, they were nevertheless quite effective in reducing pollution under centralised coordination. This is particularly true at the initial stage of pollution control. Although the industrialised market economies were capable of diverting resources into pollution control, they were equally capable of causing environmental disruption, especially at their early stages of industrialisation. Finally, it is argued that environmental protection in post-socialist societies is likely to experience a downturn in the near future. This is due to the decreasing role of government coordination, the lack of a legal system, and the difficulty of developing a well-functioning market.