Theoretical Considerations

In the years since the collapse of communism, issues of post-communist transformation have been the subject of intense scrutiny by a variety of scholars employing various approaches from political culture, ‘transitology’, nationalism and institutionalism to political economy, neoclassical economics and rational choice.1 Given the complex reality of the radical transformation which the transition economies have undergone, this variety in approaches comes as little surprise. Despite their differences in methods and choice of perspectives, a large number of these studies assign an important role to institutions in the transition process. Institutionalists and political economists, in particular, are strong proponents of the idea that institutions matter (Williamson 1975; North 1990). Many political scientists and economists have argued that the patterns of state-societal interactions play a major role in explaining the differences in economic performance among nations (Olson 1982; Lange and Garret 1985; Hart 1992; Knack and Keefer 1995; Hicks and Kenworthy 1998).2 Although other studies (Gray and Lowery 1988; Wallis and Oates 1988) revealed significant differences in growth performance without major changes in state-societal arrangements, the attempt to explain macroeconomic aggregates and economic growth through societal-independent variables remains a valid research pathway to the understanding of differences in economic performances among otherwise similar countries.