Human Costs of Post-communist Transition: Public Policies and Private Response

The transition to capitalism in former communist countries of Eastern Europe and the USSR was achieved at a very high human cost, leading to unprecedented increases in poverty, inequality, and other forms of deprivation. This paper surveys the literature and data on human costs of post-communist transition and discusses differences in responses to poverty among countries of the region. It argues that human costs of transition to the market were strongly influenced by policy choices made by the governments and were least severe in countries of central eastern Europe, where public response dominated the anti-poverty efforts. In most of the countries of the former USSR and south-eastern Europe, state-run poverty abatement programs were largely inadequate, putting the brunt of the struggle with poverty onto the shoulders of families and individuals.