On the nature of the divergent economic outcomes during the post-Socialist transition

Abstract

The focus of this thesis is to introduce the reader with the recent developments in the countries in transition from the centrally-planned economy towards a "healthy" democratic system with free market relations. The main aim is to analyze the divergence of paths the countries have experienced in the course of transition, particularly, the rapid recession and a following recovery, since it is critical for any country already experiencing the transition (from any system "A" towards any system "B") or just preparing itself for the process. The comparative analysis in the form of case-by-case and point-by-point methods dominates in the research. The work tries to answer two basic questions: "Why had the post-Socialist countries in transition face a serious output decrease and, generally, an economic recession?" and "Why the developments were divergent throughout the region?" The existence of output recession is proved with the help of several economic indicators, such as evolution of GDP, inflation rate, registered unemployment rate, Human Development Index, composition of GDP by sector, but also G1NI coefficient and poverty ratio, etc. Initial conditions index, Transition progress indicator, Liberalization index, Index of institutional quality, etc. support the second part of the thesis. In search for reasons...