Political Economy, Democracy and Eastern Europe

Recent proposals for swift privatization of all social property in Eastern Europe overlook the unique history and culture of that region. The neoclassical model of development treats private property and free markets as virtual guarantees of prosperity, stability, and political democracy. However, the more comprehensive method of political economy highlights the social, political, and cultural underpinnings of economic activity. Centuries of authoritarian rule, culminating in four decades under communism, have left Eastern Europe ill‐equipped for the rigours of international competition. Until Eastern Europe develops stable democratic institutions, mass privatization is likely to result in chaos and the reimposition of political authority.