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Former Communist party membership and present-day entrepreneurship in Central and Eastern Europe


  • Ivlevs, Artjoms
  • Nikolova, Milena
  • Popova, Olga


After the collapse of Communism in Central and Eastern Europe, former party members were particularly likely to start businesses and become entrepreneurs. However, it remains unclear whether this entrepreneurial activity was driven by the resources, information and opportunities provided by former party membership or because people with specific individual attributes were more likely to become party members (self-selection). This study is the first to separate the causal effect of former Communist party membership from self-selection. Using individual-level Life in Transition–III survey and instrumental variables analysis, we find that, in Central and Eastern European countries, membership of former Communist party has facilitated business set-up but not business longevity. Our results also suggest evidence of negative self-selection, meaning that people who joined the former ruling party tended have fewer of the traits associated with entrepreneurship such as motivation, risk tolerance, and entrepreneurial spirit. We show that former Communist party membership still matters for business practices, business ethics, and the nature of doing business in transition economies.

Suggested Citation

  • Ivlevs, Artjoms & Nikolova, Milena & Popova, Olga, 2019. "Former Communist party membership and present-day entrepreneurship in Central and Eastern Europe," GLO Discussion Paper Series 423, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:423

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    References listed on IDEAS

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    2. Sałach, Katarzyna & Brzeziński, Michał, 2022. "Political connections and the super-rich in Poland," Economic Systems, Elsevier, vol. 46(4).
    3. Sorgner, Alina & Wyrwich, Michael, 2022. "Calling Baumol: What telephones can tell us about the allocation of entrepreneurial talent in the face of radical institutional changes," Journal of Business Venturing, Elsevier, vol. 37(5).
    4. Otrachshenko, Vladimir & Nikolova, Milena & Popova, Olga, 2021. "Double-edged sword: Persistent effects of Communism on life satisfaction," GLO Discussion Paper Series 927, Global Labor Organization (GLO).

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    More about this item


    communism; communist party; elite networks; entrepreneurship; post-socialist countries;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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