Economic Issues


This compilation features books of the Central European University Press, published since its establishment in 1993, that have some relevance to the economy in the post-communist world, including its historical dimension. After the latest release, titles in the backlist are arranged by content: contemporary topics are on top, older themes below. For more substantial information about the content and availability, please click on the covers of the book, or on the links inserted into the citations.

“Questioning the axiom that the state is an actor pursuing the common good, we can introduce relational economics as a challenger of the mainstream neoclassical synthesis. The type of economy under the criminal state pattern of corruption, operating by the logic of informal patronal networks, is called a relational economy.”—A Concise Field Guide to Post-Communist Regimes.
“In a relational economy, property rights have a conditional character, constantly threatened by predation using the means of grey and white raiding.In a market economy, property rights are upheld impersonally.”
“The key difference between market and relational economies is that, while market economies close markets normatively, relational economies close markets discretionally.”
“While it is customary to refer to the lobbying major entrepreneurs of liberal democracies as ‘oligarchs,’ the two indeed sharply differ. The oligarchs use their legitimate fortune to also build political power: the economic power is public, but the political power is kept hidden.”

“Šik’s” reform, implemented from 1965 to 1969, partially relaxed the mechanisms of central planning of the economy, although it ultimately ended in failure.”—The Rise and Decline of Communist Czechoslovakia’s Railway Sector.
“A central economic plan ensured that in the face of growing competition from road transport, the railways would retain their position in terms of the volume of traffic. On the other hand, there would be no opportunity for modernization, increasing efficiency, and lowering the cost of operations. The railways were trapped in a ‘vicious circle’ they were unable to escape before the end of communism in Czechoslovakia.”
“The wave of economic transformation after 1989 fully exposed the sad state of the railway sector, its lack of funding, and its low level of competitiveness with other forms of transport.”
“It took more than 20 years to change attitudes and stabilize the railway system. Reforms in the rail sector, effected after the year 2000 under intense pressure from the European Union, facilitated and accelerated those changes.”

“To convince trading houses to open up new business on Ottoman territory, the Habsburg government implemented a generous financial assistance system in the form of subsidies and bonuses.”—Engineering the Lower Danube.
“Austria’s exclusion from the Zollverein marked the beginning of a gradual decline in Austria’s economic influence in the other German territories. To compensate for this loss, the Habsburg government elevated the Danube route to its primary export outlet.”
“Since the Treaty of Adrianople lifted the export ban in the two Danubian Principalities, the main economic activity revolved around exporting raw materials, mainly grains, via the Danube and the Black Sea to European markets. To attract foreign merchants and shipowners, Brăila and Galatz were turned into free ports.”
“That the dismantling of economic barriers could also give rise to unequal economic partnerships between international trading houses and local grain exporters, and even encourage economic exploitation, often remained unaddressed.”


Titles on political economy from the backlist:

“It is no longer the oligarchs nor the organized underworld who capture the state, but a political enterprise—the organized upperworld— that captures the economy, including the oligarchs themselves.” —The Anatomy of Post-Communist Regimes.
“The elements of patrimonial domination that existed in the Soviet system transformed into a system of a ‘modernized’ neopatrimonialism, in which these patrimonial relations lose their traditionalist character and acquire a modern economic dimension.”
“The presence of reiderstvo practices is central to the question of what went wrong with the post-Soviet economic reform and why market capitalism failed to be established in Russia.”
“Saakashvili’s economic reforms brought sweeping deregulation that the Western partners didn’t always understand, as they lacked appreciation of the context of those reforms.”
“The predatory nature of the economic system exploded during the Yanukovych presidency. He was in no mood to institute reforms that liberated entrepreneurship, nor did he understand their importance.”

“Open society’s Cold War supports—growing liberal democracies with redistributive capacity, American power as defender of open society, and existential confidence that free markets could benefit us all—have all fallen away.” .”—from a volume that re-examines the history, achievements and failures of the open society concept.
“Open society in its origins was not neoliberal; it was its opposite. By and large, Popper himself, as well as Berlin and Arendt, took for granted a redistributive and welfarist vision of the state’s role in regulating a capitalist economy, to the degree that they thought about economic questions at all.”
“For most Russians, the transition from closed to open society took the form of imperial collapse, economic disintegration, and the weakening of public order and welfare supports.”

“The institutionalized forms of stakeholder engagement—stakeholder dialogue and stakeholder participation in corporate strategic decision-making—are the basis of responsible corporate operation.”—from a book on corporate social responsibility (CSR).
“Corporate social responsibility is essentially political corporate responsibility: corporations, realizing the democratic role they must play reinventing democracy in a transnational globalized world, engage in public deliberations, collective decisions and joint activities with stakeholders.”
“All this, of course, raises a number of problems: how to identify stakeholders to participate in the process; on what group size the possibility of participation depends; exactly how and with what regularity members of the decision-making forums should be elected, etc.”

Why do some nations fail and others strive?—asks one of the best specialists in international economic relations. Development strategies pursued over the past century are sorted out as complete failure (the illusion of shortcut), incomplete failure (development economics) and incomplete success (economic freedom). “A country where the future has arrived—well, not quite…”—guess, which one? (Brazil.)
A penetrating, empirically based analysis of the concurrent development strategies unmasks the theoretical and philosophical fallacies of the statist systems and explains why they have failed economically.
A parable in the book contrasts the way a Polish socialist economist, and Milton Friedman, the would-be Nobel Prize winner looked upon female lipstick. For the one the state, while guiding the economy, should “decisively put a stop to the production of luxury versions of consumer goods,” while for the other lipstick was a typical case of “incentive consumer goods,” which raises the aspirations to consume and—consequently—to work, earn, and save.

From all schools of philosophy, positivism is closest to the economy as a practice and as an academic domain, particularly political economy. Since the beginnings, from the philosophy of progress expounded by Turgot, the comptroller general of Louis XVI, through the Principles of Political Economy by J.S. Mill up to The Methodology of Positive Economics by Friedman, most exponents of positivism also cultivated economic theories, or vice versa. Several of them had a special relationship to the economic thinking of Marx, disciples some, critics others.
The radical reappraisal of positivism as a major movement in philosophy, science and culture aims to determine its influence on, among others, the economic sciences. 

Studies on post-communist economies, current issues on top:

“A tycoon in the Balkan or Serbian context is closer to Carlos Slim or Roman Abramovich than to Bill Gates or Richard Branson.”—The Moneywasting Machine.
“Fiat received a bonus of €1,000 for every car produced. In 2013, the European Commission requested to remove this. Fiat and the Serbian government made a fictitious contract under which the same amount would be paid to Fiat for additional jobs. However, Fiat was not obliged to hire all these workers; it only had to create the positions.”
“The Privatization Agency had around 300 employees, which seemed excessive for an Agency that had not sold a single company for several years in a row.”
“We quickly realized that no one in the Serbian government was interested in reducing party patronage. Quite the opposite: it remains one of the most extractive institutions of the Serbian political institutional design.”
“I have tolerated all obstructions and the irresponsibility of the public companies. After all of this, it makes no sense to remain in the cabinet.”

“Russian identity has been constructed by two widespread establishment discourses: those of cultural and economic regionalism. They correspond to two grand geopolitical projects, that of the Russian world and that of the Eurasian economic integration.”—from a book on constructing Russia as a supranational entity.
“The tendency toward economization and depoliticization of regional integration strengthened as cooperation evolved from the multipurpose framework Commonwealth of Independent States toward more specific agendas under the Eurasian Economic Community, established in 2000.”
“Recentralization of economic power did not mean abolition of capitalism, merely its mutation into a form of ‘state capitalism’ or ‘neopatrimonialism’, whereby control over major assets would be redistributed in favor of a different, and more consolidated, constellation of elite networks organized around the president.”

“No one was able to force Orbán to present the voters, or at least the party’s supporters, with a genuine and coherent political-economic plan. Publicizing and implementing a realistic and coherent economic policy would hinder, or at least slow down, the ability of the regime’s intent to monopolize power.”—from an analysis of a post-communist mafia state.
“The Orbán government proclaims that only industrial, construction, and agricultural production create new value, while the service sector is only involved in the reallocation of generated income, and is even a parasite on the productive sector!”
“According to a constitutional amendment, the Constitutional Court this body can only review tax and other laws governing state finances in limited cases.”

“Kyiv grew 267 % between 1996 and 2011, and in 2012 accounted for more than 17 % of Ukraine’s GDP and about 50 % of Ukraine’s FDI.”—from a book on regional specificities in Ukraine.
“The managerial survey in 2013 included a sample of 625 firms in Ukraine, 25 companies per oblast.”
“The analysis of the dataset established significant unconditional differences in attitudes to risk between the Donbas/southeast and the west/north/center regions, with the former being more risk averse and the latter more willing to take risks. Those who declare two mother tongues, Ukrainian and Russian, are relatively more willing to take risks than those with one mother tongue.”
“Companies in the southern and western regions claim to be least exposed to corruption and to engage less often in informal practices when dealing with public institutions.”
“In general, the project establishes that there are no clear-cut and stable regions concerning attitudes to risk, envy, corruption and informal practices.”

“There is an inconsistency between the declared aims of development based on an open economy and on innovation and the measures applied: centralization and limitation of the autonomy of independent institutions as well as a certain distancing from deepening European integration.”—from a collection of essays on current Polish politics.
“The economic policies of PiS regarding banks, foreign investors, wind power, energy, and Russia and its fight with the European Commission all play into the narrative of Polish exceptionalism.”
(Presidential candidate Duda) “correctly believed that his electorate did not know that they were living in a country with the fastest economic development in Europe, with deflation, falling unemployment, and a decreasing budget deficit.”

“It is ironic that just eleven years after the split, in 2004, Slovakia became the regional leader in reforms, while the Czech Republic was the laggard.”
Scholars compare Czech and Slovak achievements and failures in the twenty years since independence, including in the economy.
“While the leading Czech economists preferred rapid privatization and minimal state intervention in the economy, many of their Slovak colleagues advocated for a more gradual form of transformation, producing a socially oriented market economy with relatively strong state participation.”
“Post-communist privatization programs created a short-term, high-stakes battle for the wealth and power of a country… Rather than restructuring enterprises, managers stripped them of cash; and rather than repay loans, partial enterprise owners pocketed the money and abandoned their asset-stripped firms to an inefficient bankruptcy process.”
“In the mid-2000s, the Czech Republic reached record GDP growth rates of over 6 percent, which subsequently led to a decrease in the unemployment rate to around 5 percent.”
“Slovakia’s success came largely in spite of Mečiar’s policy innovations, rather than because of them. The untested, but independent central bank retained a stable monetary supply throughout the Mečiar era. This ensured that Slovakia did not catch the Russian disease of hyperinflation.”
“While the Slovak gross domestic product during 1989–2005 grew by 33 percent, real wages in 2005 were still below the 1989 level. This is one of the main factors contributing to the competitiveness of the Slovak economy.” 

“Was the economic transformation really necessary in Czechoslovakia?” The crux of the answer: “The GDP per capita in Czechoslovakia in the early 1950s was the same as in postwar Austria. After forty years of communist rule, the Austrian GDP per capita was five times higher.”
“What is the assessment of the Czech voucher privatization?” To this the reader gets a complex answer including an appraisal of alternative options.
“How should we assess the transformation as a whole?” Zidek discusses three topics that he considers critical for broad evaluation of the process—political/democratic stability, development of GDP, and general direction of the transformation process. “The crucial indicator is the development of real wages… Noneconomic statistics improved as well. Average longevity increased, infant mortality decreased, and the environment improved dramatically.”
“It was an extremely difficult process full of unavoidable compromises and traps. But the overall transformation process is a success story.”

Popular political economy research has remained biased towards advanced countries and has neglected developing and transition economies. The adjustment problems of public finance in countries of Central and Eastern Europe are often misunderstood and misinterpreted by western scholars.
The main question posed in a very interesting application of 'new institutionalist' thinking of public finances in these countries is whether their economies require thinking regarding public finances different from that used in the rest of the developed world. Are transition economies so much different that none of the well-known mainstream political economy concepts or models can be applied to the analysis of fiscal performance in the region? Benczes and his contributors demonstrate that this is not the case at all... 

Trust is a source of economic growth. Satisfaction with democracy is a strong predictor of fiscal performance. Institutional trust is an enabling factor that facilitates the reaching of a country's growth potential. To what extent, and how to prove these suppositions empirically? While searching for answers, the comparative study had to address exceptions to the rule: countries that have performed well in spite of low trust (e.g. Poland). Also, the dilemma of austerity eroding public trust is a challenge. What lessons does history offer? 

An economist turned politician examines the roots of the current crisis and the flaws or weaknesses of the financial system in general and in Europe in particular. 

Political economy of the postcommunist transition:

Shortly after the collapse of the communist bloc CEU Press started off with real time analysis of East European economic transition by most competent experts and actors of the issue: Balcerowicz, Rostowski, Frydman. Subsequent volumes discussed specific aspects of transition: 

An erudite and sweeping essay on the political economy of transition from command to market economy celebrates the historic triumph of miracle over misery, “to learn more about the nature of this miracle to avoid new misery.” In today’s atmosphere and zeitgeist this book is a rare and spirited defence of market capitalism and liberal democracy, of Western civilization. The theme and the approach is similar to the analysis of transition from socialism to capitalism by one of the greatest authorities of the subject.

Titles on economic history:

“The slave economy not only ruined the peasant class but also prevented the rise of a commercial middle class. It bears the burden of blame for the disintegration of the ancient world.”—The Rise of Comparative History.
“The progress of commerce everywhere is the catalyst for industrial transformations. This progress is responsible for the economic prosperity of the Italian republics and Dutch towns. From the fifteenth century onwards, the textile merchants often transformed into entrepreneurs.”
“The Empire became in the 18th century something of an economic and customs unit. The abolition of customs lines advanced but slowly. It was considered a progress that goods going from Silesia to Trieste only had to pay duties at six points. Goods using the Danube route paid duties at thirteen points in the Austrian provinces.”
“After the Revolution of 1848 Hungary and Austria were at last joined into one economic unit, more than three hundred years after their political union.”

“Emphasis on economic well-being as a crucial element of nation building was just one of the many ways in which the development of nationalist ideologies became linked to the economic realm.”—from a collection of essays and comparative studies on the nationalism-economy nexus.
“Most economists and political economy scholars use the term ‘economic nationalism’ as a synonym for protectionism. In doing so, they misleadingly equate nation and state, and anachronistically trace economic nationalism back to early modern mercantilism.”
“In a nutshell, while there is not enough economics in nationalism studies, there is not enough nationalism in political economy scholarship.”

“The objective of the GDR was to increase the economic returns from culture. The copyright system should encourage to be creative for the benefit of socialism and for the people. The GDR wanted to join the world economic scene and engagement with international copyright law was crucial.”
A book on the expansion and institutionalization of intellectual property norms.
“While copyright is highly compatible with market economies it does nothing to facilitate political resistance against state domination. Instead, copyright can be used as a tool to curb the exchange of information.”
“Post-communist copyright legislators had a twofold task: they had to adapt the old copyright system to the necessities of a modern market economy and had to find answers to the new problems raised by the technological, economic, and social developments.”
“Critics from peripheral states accuse patent law of protecting the special interests of rich states and multinational corporations. Critics at the center of the globalized world complain that copyright no longer serves workers in the cultural sector or the culture of a nation, but rather globally operating media concerns.”

20th c. Russian agriculture constitutes a special cluster: 

“To a tyrannical elite, economic planning gave political benefits—industrialization, militarization, modernization. Economically, however, the system could not function”—One Hundred Years of Communist Experiments.
“The irrational, unbending commitment of the communist states to such disastrous economic regimes shows that this was an ideological project, in which ruin and collapse were acceptable collateral damage.”
“CIA and independent scholars dispute Goskomstat’s national income growth statistics, but the USSR’s solid anti-inflation and full employments records are incontestable. Overfull employment was the USSR’s anti-equilibrium norm.”
“Economists saw good reasons to predict a smooth transition to a market economy. Yet the planned economy had been largely supplanted by the parallel economy long before its formal collapse. Post-communist reforms only strengthened the grip on resources by parallel economy dealers and corrupt politicians, and bosses of organized crime affiliated with them.”

“I examine the economic backwardness of Eastern Europe from the perspective of the debate that took place among Polish historians in the postwar period.”
“It is worth considering Eastern Europe as a community whose Europeanness was questioned—primarily on account of its economic weakness. This region was excluded from the ‘European miracle’ of industrial capitalism, and in this respect it is similar to Southern Europe (Greece, Spain, Portugal, the south of Italy) and Russia.”
“The Europe of serfdom was characterized by a legacy of social and cultural polarization between the nobility on the one hand, and peasants and Jews on the other. Structurally, it differed from Western Europe in terms of its weaker bourgeois and farmer traditions, and compared to the Balkans it had weaker folk and tribal traditions and stronger feudal ones.”
“I do not assume that backwardness is the unchangeable condition of East European societies; I merely observe that it has been to date.”

Further economic history titles discuss the intersection of globalization and the dynamics of core-periphery relations, the economic annihilation of the Jews in Hungary in the 1940s, and the impact of the Czechoslovak and East German uranium industries particularly after the end of the World War II. 

Economic history of the recent past:

“Both the political leadership of the USSR and its economic experts entertained an ongoing interest in economic cooperation with the West and particularly with the United States, and that these concepts can be traced back to Soviet economic diplomacy in the immediate postwar period.”
Contrary to today, the essays on the decades of “peaceful coexistence” (détente) present a United States based on principles and values much firmer than its West European allies with regard to Russia.
“West Germany swiftly became one of Moscow’s major trading partners and the ties established during the early 1970s were selfperpetuating, even after Willy Brandt’s fall from office. By 1975, West Germany had signed two more gas pipeline deals, again financed by German bank consortia to be repaid over decades to come with the exported natural gas. For West Germany, East-West trade had become a lucrative long-term investment in the Soviet economy.”
“The role of Basket II of the Helsinki Final Act in 1975 is generally underestimated—the economic cooperation originally seen in the East as a vehicle for consolidating the Soviet Bloc economies, by the end of the 1980s, became a catalyst in the collapse of the communist systems.”
“Carter’s call for sanctions fell mostly on deaf ears. When he pressured his European allies to sacrifice this economic cooperation during the summit meeting in Venice, in June 1980, the Europeans rejected Carter’s demands outright and complained about “being nagged and incorporated as America’s ‘51st state.’”

Reagan “I believe they hunger for some trade and technology transfers. There is no question but that we have a tremendous advantage on that front. Now I know some on our side don’t like linking trade to political conduct; they believe peaceful trade is worthwhile all on its own. Well, I happen to think that trade is for us a major bargaining chip. We shouldn’t give it away.” (Reagan, November 1985)
Face to face conversations of superpower leaders at the end of the Cold War, now in paperback.
“Reagan said some people in Congress had passed and sent him a protectionist trade bill. He had vetoed it, and Gorbachev knew what a veto meant.
Gorbachev said that the President might not know it, but the US had very high protectionist barriers to trade with the Soviet Union. Tariffs on Soviet went up to 220 percent. The dead were still controlling the living. Jackson was long dead, but his amendment lived. Instead of most-favored-nation tariff treatment, the Soviet Union received mostunfavored-nation tariff treatment.” (May 1988)

Bush: Let’s begin trade negotiations immediately. I will push the American side to move. I want it done. I would like to wrap up an agreement by the 1990 Summit.” (December 1989)—from Gorbachev and Bush.
Gorbachev:  We are moving toward private property, but very small and with no big business. Our eventual goal is to make all these enterprises act within the market after market mechanisms have been installed.
Bush: If more privatization can be encouraged, this would be better for international trade, at least with the U.S. It would attract capital from our country in tremendous volumes.” (December 1989)
Gorbachev: Before making the transition to free prices, we must take steps to protect the poorest part of our population. A threat exists in the productive sector because a disruption in economic ties will lead to a decline in production in January and February. There might not be a sufficient amount of goods despite the freeing of prices. We need financial aid for more goods and aid to convert the ruble and open the country to foreign capital.” (Gorbachev, December 1991)

“Economic concepts were reconsidered in many countries after the 2008–09 global economic crisis. The devastating effects of the unexpected financial crisis could be mitigated only by massive state intervention. The meltdown of the global financial system was prevented through bailouts of the largest global financial institutions in the United States and Europe. Various techniques were applied, but the outcome was generally a massive increase of state ownership in the financial sector.”
From the introduction of a comparative analysis of the role of state in the economy in Austria, Brazil, France, Germany, Hungary, Poland, Turkey, Singapore, and Slovenia.

“Nine days after the fall of the Berlin Wall, François Mitterrand persuaded his European Community colleagues to consider the creation of a ‘Modernisation and Development Bank for Europe’”—After the Berlin Wall.
„Attali protested to Mitterrand, urging him to intervene to reclaim the coordinating role about Bank, but was rebuffed. ’The US prefers the Brussels imp to the French devil! A novel choice, more divisive than constructive. The President, to whom I speak to suggest, as host country, we reclaim the secretariat, refuses firmly: ‘One can’t have everything’.’”
„Mitterrand, like Thatcher, was nervous at the prospect of a strong Germany. In due course, Kohl was able to allay these fears by committing fully to the single currency and the EU.”
“Investors were comforted by Yeltsin’s appointment of wellknown reformers Anatoly Chubais to run the Presidential Administration office and later Boris Nemtsov as first deputy prime minister. This encouraged financial markets to believe a turning point had been reached in Russia’s transition.”

“In late November,2008, writing to Jose Manuel Barroso, the heads of the six large EU-based banks sounded an alarm bell about the state of financial stability in emerging Europe and pressed for liquidity injections.”—Transforming Markets.
“Ukraine, Hungary and Latvia all benefitted from international sovereign support over the last three months of 2008.”
“Early loans included credits to micro-lending organisations in Tajikistan and Kyrgyzstan, boosting the availability of Tajik somoni and Kyrgyz som loans to local entrepreneurs.”
“By 2014, when the EBRD stopped funding new investments in Russia following the annexation of Crimea, Turkey became the EBRD’s largest country of operations by annual business volume.”
“It was at the 2015 Annual Meeting that Governors had called specifically for the creation of a gender strategy as part of the Strategic and Capital Framework 2016-2020.”