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After Socialism: Where Hope for Individual Liberty Lies


  • Pejovich Svetozar

    (Texas A&M University, College Station, and Imadec University)


The paper identifies the rule of law, the carriers of institutional restructuring, and the prevailing informal rules in the community as three critical determinants of the outcome of institutional restructuring in the community. The paper demonstrates that the analysis of the interaction among these three determinants a claim I call the interaction thesis explains why the transition from socialism to the market economy in postwar West Germany was a success, why the transition to capitalism in Eastern Europe is still uncertain, and why the use of economic policies based on neoclassical economics have produced the rising strength of pro-socialist parties. The conclusion is that the interaction thesis is a powerful and perhaps necessary method for the analysis of institutional changes and their causes, directions and consequences.Cet article identifie létat de droit, les supports des réformes institutionnelles, et les règles communautaires informelles qui y sont prévalent comme les trois facteurs explicatifs majeurs du succès ou de léchec de la réforme institutionnelle dans un pays. Cet article démontre que lanalyse de linteraction entre ces trois facteurs explicatifs ce que jappelle la thèse de linteraction explique, en premier lieu, le succès de la transition du socialisme vers léconomie de marché en Allemagne de lOuest de laprèsguerre, ensuite pourquoi la transition vers le capitalisme en Europe de lEst demeure incertaine, et, enfin, pourquoi le recours à des politiques économiques fondées sur la science économique néoclassique a revigoré les partis politiques à orientation socialiste. La conclusion est que la thèse de linteraction est une méthode féconde et peut-être nécessaire pour analyser les changements institutionnels ainsi que leurs causes, leurs directions et leurs conséquences.

Suggested Citation

  • Pejovich Svetozar, 2001. "After Socialism: Where Hope for Individual Liberty Lies," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 11(1), pages 1-24, March.
  • Handle: RePEc:bpj:jeehcn:v:11:y:2001:i:1:n:2

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    References listed on IDEAS

    1. Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
    2. Pejovich, Svetozar, 1994. "The Market for Institutions vs. Capitalism by Fiat: The Case of Eastern Europe," Kyklos, Wiley Blackwell, vol. 47(4), pages 519-529.
    3. Benelli, Giuseppe & Loderer, Claudio & Lys, Thomas, 1987. "Labor Participation in Corporate Policy-Making Decisions: West Germany's Experience with Codetermination," The Journal of Business, University of Chicago Press, vol. 60(4), pages 553-575, October.
    4. Enrico Colombatto, 2000. "On the concept of transition," ICER Working Papers 15-2000, ICER - International Centre for Economic Research.
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