Now nearly two decades, 27 countries have entered an unknown and challenging way for their development, called the literature transition to democracy and market economy. Comprehensive transformation that has affected the lives of over 1.5 billion people, can be considered one of the most important events of the twentieth century, with the transition from capitalism to socialism and the Great Depression.
A large group of economists began to study the transition from socialism to capitalism, initially to provide economic policy advice to governments of countries in transition, then the field of academic research, both theoretical and empirical.
Geographical spread across two continents, Europe and Asia, developing countries formed a heterogeneous group since the beginning of the transformation process. Therefore, extensive comparative studies could only be achieved by limiting the number of countries according to objective criteria. A general criterion applied was the geographical, taking into account that developing countries immediately sought to enter a path around a regional economic center. For central and eastern European countries it was the European Union, former Soviet countries except the Baltic countries was Russia, and Asian countries, Japan. There are groups and countries with high potential such as Russia and China which can themselves become centers of gravity and economic models.
For various reasons, academic research on topics of narrow specialization has focused for a long time only in the advanced transition countries - the Czech Republic, Poland and Hungary, the other being omitted. This study group selected from Central and Eastern European countries, six countries: Bulgaria, Czech Republic, Poland, Romania, Slovakia and Hungary, which have certain common characteristics: geographic location on the European continent, economic size, population, etc. geopolitical orientation. Baltic countries have been from the beginning a special group by economic size and past history before transition, and Slovenia was an atypical case even in the former Yugoslav space. Study compared to the six countries is not only a novelty Romanian economic literature, but also internationally.
The disappearance of centralized economy has surprised a goal in the economic literature, but many Western economists intellectual challenge to decipher the correct paths to be followed by countries in transition. Many aspects of the transition from elite economic reforms and institutional values were studied, resulting in a series of photographs validated by reality and that could be taken as a basis for further research. A lack of comprehensive literature but the Romanian economy and this is the second addition that brings this paper.
Entered the capitalist world economy, the Central and Eastern European countries face Western competition, requiring bold decisions from the state for breaking old patterns and making the jump to a higher quality level. Success largely due to transition and opening the external sector of the economy and foreign capital. Identify prospects Central and Eastern European countries in the context of redefining relations East - West needs to clarify their position at the end of transition and economic potential to achieve long-term objective - the development gap recovery from western European countries. Analysis of the external sector was brought up in the years 2005 or 2006 so that the paper presents updated results, which is added to any previous research knowledge.
The structure consists of five chapters for volume 1) strategies, elites and institutions in transition in Central and Eastern European countries, 2) structural reforms and macroeconomic stabilization policies, 3) foreign trade of the countries of Central and Eastern European Union 4) foreign trade of the countries of Central and Eastern Europe and CIS countries 5) foreign direct investment in Central and Eastern European countries.
In the early '90s, when the need of transition from socialist, centrally planned to market economy, there were many works on the transition from capitalism to socialism, but the same could be said about possible reverse trend, that of restoration markets in countries with economy. No Western literature had not been analyzed, with specific means of scientific investigation, such a possibility. In the political collapse, already pressing decisions could not await the outcome of scientific debates. In these conditions, there were proposals early transition strategies, which were grouped around two concepts. This step eliminated the deep tactical difficulties, even when there is political consensus on economic reform target. In addition, political changes, economic and social rights were realized in the context of acute economic crisis, the lack of experience in managing a market economy, political institutions fragile, residual pressure of communist power structures, the historic rivalries and frequent recurrence ethnic fissures.
Transition countries have followed the transition to a market economy and more specifically, the capitalist economy, but without, at least at baseline, a capitalist class. In addition, capitalism was and is a generic term, and economic literature distinguished between capitalism continental and Anglo-Saxon, between the European and Asian, based on institutional and social configuration. Existence of several legitimate question born of capitalism "as capitalism and what is built in Central and Eastern Europe" and whether the region is a laboratory for testing germ future of capitalism.
By balance of eight years of transition, Grzegorz Kolodko Polish economist noted the role played by particular interests of political groups, economic and financial reforms in the decision. The importance was emphasized elite and sociology studies. The transition to capitalism has meant building a stratified social system on grounds of class, the economic capital is dominant, communist political capital devalued, and the role of cultural capital increased, favoring technocracy and civil society actors, former dissidents. Social change could be understood as a process of adjusting the trajectory of individuals in society, and gradual adaptation to new conditions and making the path dependence of the former institutions and behaviors occur simultaneously.
Quality elites generated in each country a specific institution, formal and informal, which decisively influenced the course of reforms. Leading economists have noted that the reforms implemented in companies of Central and Eastern Europe have destroyed much of the formal communist institutions - laws, regulations, organizations, but at the same time, informal institutions of the communist period, including relationships, norms and rules behavior persists in various measures and continued to shape expectations, incentives and behavior. Moreover, new institutions appeared alongside informal and formal rules new laws. Reformers seeking to define and introduce new formal institutions, should understand that these measures will face and will interact with reminiscences of the old arrangements and informal institutions emerged spontaneously. All these issues - major concepts reform its guidelines, the initial conditions, the nature of post-communist elites, formal and informal institutions are the subject of Chapter I of the paper.
Components of the transition process have been established fairly quickly by taking the principles previously applied by the World Bank and International Monetary Fund in developing countries in Latin America. These were expressed by the phrase "liberalization, stabilization, privatization" was subsequently added a fourth component, institutional reform. A real confrontation between economists on the speed with which these reforms had made led to the conclusion that some components of the reform could be translated into reality quickly ("shock therapy"), but more slowly ("gradualism"). The content of the reforms of CEE countries is presented in Chapter II, in two sections: structural reforms and macroeconomic stabilization policies.
Eliminate the state monopoly on the property was a necessary condition for the establishment of market mechanisms and private sector in creating an economy was considered "keystone" to change the economic system. Methods of creating private sector, speed property reform, the privatization process are presented in the first section of structural reforms. Capital market development, an important component of the transition, is studied in the second section. Trade liberalization, the foreign investors and institutional reform is the last part of the first section.
At the beginning of transition, some governments have considered that the establishment of market pricing mechanism is through rapid liberalization of prices. According to the findings of economists, in some "shock therapy" has generated too much shock and too little therapy. Therefore, imbalances in the economy macro policies required. Section II of Chapter II presents the policies implemented by the Central and Eastern reduction and control of European inflation.
Liberalization and stabilization policies have resulted in damage to equipment production amongst others that came out of the socialist economy countries. Achieving sustainable development has forced CEE countries to open external sector and integrate into the global economy. Foreign trade has become vital for economic development. Contrary to some opinions initial CEE countries have considerably increased their exports to developed markets, particularly the European Union, simultaneously with the reorientation of the markets of former partners of the Council of Mutual Economic Assistance.
Current fundamental question is whether central and eastern European countries have gained from the economic structure reforms to ensure recovery of the development gap and standard of living of the population. It is obvious that for the transition countries must converge to the production structure of developed countries, focusing on high-technology goods and human capital, which is reflected due to the high degree of economic openness, the composition of trade.
Quantitative and qualitative changes in the trade of Central and Eastern European countries with the European Union are examined in Chapter III of the paper. Qualitative analysis of foreign trade is conducted from the perspective of 'comparative advantage', 'intra-industry trade "and" international segmentation of production process. "
After the disappearance of Comecon and the dismantling of the Soviet Union, trade between CEE countries and new countries of Commonwealth of Independent States fell to the level guaranteed by the relative endowment of factors of production and their economic status. CEE countries have made improvements over time in the structure of exports to the European Union is to assume that these goods began to be exported in November and CIS countries. Checking this hypothesis occurs in Chapter IV through quantitative and qualitative analysis.
Foreign trade between the CEE and CIS countries according to economists lies in the potential and possibilities of the future revival of trade is of particular interest. Aspect is studied in the last part of Chapter IV.
Aging production equipment and lack of economic competitiveness were the reasons that led to the collapse of the socialist system and required transition to a market economy. Upgrading / refurbishment industry was achieved partly through foreign direct investment (FDI). The importance and characteristics of this process are studied in Chapter V of the paper. Major issues addressed are the determinants of foreign investment, the volume and quality characteristics of foreign investments made in CEE countries, the effects of FDI on host economies, the relationship between foreign direct investment made in CEE countries and the emergence of new comparative advantages in their trade outside perspective on attracting new investment by CEE countries.
Work remains within the economic perspective, although political and geopolitical factors may explain the rationality and sometimes much better opportunity of behavior and government decisions. The main objective is to form an image on the position of Central and Eastern European countries in the context of relations with Western countries and former Soviet countries and ways to identify potential economic development.
The volume concludes with a chapter of general conclusions and selective bibliography