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Democratization, Economic Liberalization, and Transformational Slump: A Cross-Sectional Analysis of Twenty-One Postcommunist Countries

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  • P Dostál

    (Department of Human Geography, Faculty of Environmental Sciences, University of Amsterdam, Nieuwe Prinsengracht 130, 1018 VZ Amsterdam, The Netherlands)

Abstract

In this paper the author provides some empirical evidence to show that those old, new, or restored countries of the former Soviet-dominated bloc which embarked on the early institutional transformation of their political and economic systems in a broad and intensive way experienced more quickly the resumption of economic stability and growth and thus left behind the severe downturn of a transformational slump (that is, economic contraction, hyperinflation, and a highly unbalanced governmental budget). The early postcommunist transformation is examined in terms of a general transformational equation. The author provides a cross-sectional explanation of early differences throughout the twenty-one countries both in the institutional transformation and in the transformational slump. Two complementary LISREL (linear structural equations) models show that a successful early postcommunist transformation means (1) a quick resumption of macroeconomic balance and economic growth resting on (2) genuine democratization and economic liberalization, and (3) higher levels of inherited modernization.

Suggested Citation

  • P Dostál, 1998. "Democratization, Economic Liberalization, and Transformational Slump: A Cross-Sectional Analysis of Twenty-One Postcommunist Countries," Environment and Planning C, , vol. 16(3), pages 281-306, June.
    • Handle: RePEc:sae:envirc:v:16:y:1998:i:3:p:281-306
    DOI: 10.1068/c160281
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    References listed on IDEAS

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    1. Anders Åslund & Peter Boone & Simon Johnson, 1996. "How to Stabilize: Lessons from Post-communist Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(1), pages 217-314.
    2. Philip Hanson, 1997. "What sort of capitalism is developing in Russia?," Post-Communist Economies, Taylor & Francis Journals, vol. 9(1), pages 27-42.
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