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After State Socialism: The Political Origins of Transitional Recessions

American Sociological Review
After State Socialism: The Political Origins of Transitional Recessions

Transitions from state socialism created a startling range of initial economic outcomes, from renewed growth to deep economic crises. Debates about the causes have largely ignored the political disruptions due to regime change that coincided with sudden initial recessions, and they have defined the problem as relative growth rates over time rather than abrupt short-run collapse. Political disruptions were severe when states broke apart into newly independent units, leading to hyperinflation, armed warfare, or both. Even absent these disruptions, the disintegration of communist parties inherently undermined economic activity by creating uncertainty about the ownership of state assets. The protracted deterioration of the party-state prior to the breakup of the Soviet Union generated widespread conflict over control of assets, which crippled economic activity across the Soviet successor states. A more rapid path to regime change was less disruptive in other post-communist states, and the problem was absent in surviving communist regimes. Comparative accounts of regime change frame an analysis of panel data from 31 countries after 1989 that distinguishes the early 1990s from subsequent years. A wide range of variables associated with alternative explanations have little evident impact in accounting for the onset and severity of the early 1990s recessions.