Strengths and Weaknesses of ‘Weak’ Coordination: Economic Institutions, Revealed Comparative Advantages, and Socio-Economic Performance of Mixed Market Economies in Poland and Ukraine
This chapter explores and explains: ‘what type of capitalism has emerged in post-communist Europe?’ and, ultimately, ‘does it work?’. It also critically examines the suitability and applicability of essentially Western neo-institutionalist theories of comparative capitalism for the study of post-communist phenomena. On the basis of empirical evidence and comparative analysis of the two largest neighbouring political economies of eastern Europe (Russia apart), it is argued that notwithstanding the world-wide neo-liberalising pressures, the changeable politics of post-communist transformation, and the unstable nature of eastern European institutions, both Polish and Ukrainian national variants of capitalism can be described as mixed- or ‘weakly’ coordinated market economies. In spite of the prevailing perceptions and popular media praise given to post-communist nations for adopting a deregulated, privatised, liberal type of capitalism, neither Polish nor Ukrainian political economy generally resembles the liberal market-based model. It is contended, however, that despite the apparent system-wise detachment of the eastern European economies of Poland and Ukraine from the ideal types of a coordinated-market economy (CME) and, especially, of a liberal-market economy (LME), the institutional structures of the two post-communist countries are not necessarily of a ‘low-level’, ‘dysfunctional’, or ‘suboptimal equilibrium’ type.
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