Transitional Societies in Eastern Europe: Moving Beyond the Washington Consensus Paradigm in Transitology

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Post-communist transitions are generally thought to be a part of the past. However, most students of those transitions now acknowledge that the processes of transition in the countries in Central and Eastern Europe and the Former Soviet Union are far
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  Transitional Societies in Eastern Europe: Moving Beyondthe Washington Consensus Paradigm in Transitology Maksim Kokushkin* Department of Anthropology and Sociology  Abstract Post-communist transitions are generally thought to be a part of the past. However, most stu-dents of those transitions now acknowledge that the processes of transition in the countries inCentral and Eastern Europe and the Former Soviet Union are far from over. Instead of reachinga point where all countries converge towards normal capitalism, the experiences of the countriesfrom the region are extremely diverse. This article surveys the literature on post-communist tran-sitions and argues that transitologists have experienced a shift from viewing transitions as mostlysimilar and converging to viewing transitions as uniquely complex and diverging. To advance thisargument, the article: (i) systematizes the literature along methodological lines; (ii) uses a policyparadigm (namely, the Washington Consensus) as a metaphor to illustrate the tensions in the lit-erature; and (iii) connects the shift away from one-size-fits-all policies with the evolution in theliterature from being formally prescriptive and abstract to being context-sensitive and emphasizingcomplexity. Introduction Twenty years ago, one of the super-powers in the world collapsed. The dissolutionof the Soviet Union in 1991 followed the fall of the Berlin Wall in 1989 and thetwo together triggered thorough reforms across the former Soviet Bloc. In 1991, theformer Soviet republics joined a number of transitions from ‘‘communism’’ to‘‘capitalism’’ in Central and Eastern Europe (CEE). In the context of ongoing andemerging transitions, an overview of the dynamics of the study of transitions can pres-ent insights into the importance of academic research in the context of policy-makingduring transition. This paper traces the evolution of transitology’s study of post-communist transitions from a fairly deterministic and prescriptive field to one that iscritical of economic determinism and emphasizes rich description. I use the Washing-ton Consensus as a metaphor that illustrates this evolution. I argue that starting fromthe early 1990s, transitology’s analysis of post-communism followed the philosophy,logic and prescriptions of the Washington Consensus, but then shifted to analysesthat acknowledged complexity and the importance of local cultural and historical con-texts.To substantiate this argument, I first present a brief overview of the three maintypes of studies used in the context of post-communist transitions. I then connect theformal logic of a subset of those studies with the ideas of the Washington Consensus.Then, I discuss in more detail specific examples from the literature that illustrate thetransition from one-size-fits-all to context-sensitive analyses of transitions. Toconclude, I offer suggestions for the future studies of post-communist and other transitions. Sociology Compass  5/12 (2011): 1044–1057, 10.1111/j.1751-9020.2011.00423.x ª  2011 Blackwell Publishing Ltd  The studies of post-communist transitions It is important to preface the discussion of the types of studies of transitions with a noteon the term ‘‘transition’’. In the 1990s, the term was critiqued for implying that therewas one single model of transition that the countries from CEE and the Former SovietUnion (FSU) had to follow. For instance, Stark (1994) argues that the term usually repre-sents oversimplified linear ideas about the set of reforms that would lead from commu-nism to capitalism. For Stark, the term is associated with ideas about the superiority of capitalism as an economic system, disregard for any cultural and historical factors at playin a transitional country, and assumptions about an existing institutional vacuum and abil-ity to ‘‘start from scratch’’ (Stark 1994). Agreeing with Stark, Bryant and Mokrzycki(1994, 4) argue that the term ‘‘transition’’ does not reflect the complexities of the institu-tional change in CEE and FSU. Instead, the authors prefer to use the term ‘‘transforma-tions’’. In effect, this paper traces the expansion of the concept of ‘‘transitions’’ to a levelor richness and complexity that makes it synonymous with ‘‘transformations’’. To avoidconfusion, I use ‘‘transitions’’ to refer to the thorough institutional transformations inCEE and FSU.Analyses of transitions from communism have been abundant 1 and rich. Typically, theyare comparative studies, holistic case studies, or comparative case studies using a varietyof research strategies and data sources. Most of the comparative studies are in line with aformal comparison, 2 where idiosyncratic features and characteristics are brought together and organized in a meta-explanation. These comparative studies tend to follow Marsh’s(1967) outline of what a comparativist should do: (i) put forward propositions based oncross-societal analysis; (ii) divide these propositions belongs based on their specific societalsubsystems – family, polity, stratification, demography, or culture; (iii) code and classifyeach proposition into a set of issues within a societal subsystem.The comparative studies of post-communist transitions (see Andrusz et al. 1996; A˚slund2007; Bandelj 2008; Elster et al. 1998; Eyal et al. 1998; Grabher and Stark 1997; Holmes2006; Orenstein 2001; Outhwaite and Ray 2005; Stark and Bruszt 1998) usually attemptto construct typologies of transitions either using already established typologies (e.g. polit-ical cleavages, types of democracy) or by generating native typologies. They draw conclu-sions that are generalizable to a region of countries (i.e. CEE and the FSU) whilemerging country-specific features in a larger framework.For instance, Elster et al. (1998) focus on how institutions are built and re-built duringtransition. The authors construct a model of an ideal state of Western capitalism that allcountries from the region are presumably heading to. In another example, Eyal et al.(1998), investigate the role of communist elites in building capitalism during transition.Both of these comparative studies use country-specific examples of how transition works.However, these examples are subordinated to the larger arguments the authors make. Inthe end, the larger arguments are presented as applicable to the whole region.Holistic case studies (see Cook 1997, 2007; Creed 1998; Mcdermott 2002; Roper 2000; Schwartz 2006; Shirk 1993; Sperling 1999; Verdery 2003; Weiner 2007; West2002), on the other hand, are narratives put together by an investigator that both emergefrom events and are used to explain events (Abbott 1992). These studies focus on theuniqueness of one country’s experiences 3 and background in constructing a holisticaccount of how a specific transition has developed in a country, a sector or a part of acountry. Holistic case studies are thus not concerned with generalizing and applying their country-specific conclusions outside of the case. At the same time, they use rich evidenceto make analytical points that extend outside the context of a specific case. Hence, case Post-Communist Transitions 1045 ª  2011 Blackwell Publishing Ltd  Sociology Compass  5/12 (2011): 1044–1057, 10.1111/j.1751-9020.2011.00423.x  studies of one transition have relevance in the context of other transitions, even thoughthey lack generalizability.For example, Creed (1998) traces how a specific version of socialism previouslyadopted in a Bulgarian village influenced the experiences of that village during transition.The author’s ethnographic data suggest that, in Bulgaria, people in agriculture saw thepolicies of transition as upsetting the economic viability of their embedded agriculturalinstitutions. Similarly, Sperling (1999) argues that during the 1990s a particular group(women activists in Russia) incorporated the history of Soviet gender practices in itsactivities during transition. Hence, central to these holistic case studies of post-communisttransitions, is the epistemological argument that the study of transitions needs to be con-textual and grounded in local cultural and historical processes.Finally, the comparative case studies of post-communist transitions (see Blanchard et al.1994; Ble´ jer and Skreb 2001; Dudwick et al. 2007; Hoshi et al. 2003; Lane and Myant2007; Linz and Stepan 1996; Mcfaul and Stoner-Weiss 2004; Pridham and Gallagher 2000) are usually in edited volumes that include brief case studies written by expertauthors with a loose analytical framework put together by the editors. Comparative casestudies thus represent the middle ground between comparative studies and holistic casestudies. The editors usually draw broad conclusions that are somewhat generalizable whilechapter authors focus on country-specific narratives with some depth.For instance,  After the Collapse of Communism  (Mcfaul and Stoner-Weiss 2004) is anedited volume based on a 2000 conference 4 commemorating twenty years of transition.The editors pose three general questions that the chapter authors interpret and address: (i)What are the overall lessons ten years after the collapse of the Soviet Union? (ii) Whatare the theoretical implications of post-communist transitions? (iii) What are the theoreti-cal ideas emerging from post-communist transitions? The editors argue that ‘‘lingeringlegacies from the Soviet era had real consequences for the emergence of new practices adecade later’’ (Mcfaul and Stoner-Weiss 2004, 15). They also maintain that the studies of post-communism contribute to the analyses of comparative politics and the social sciencesin general.Another set of comparative case studies draws an overall framework of the types of economic systems emerging from the transition and positions cases within each of thetypes. Lane and Myant (2007) outline three types of post-communist economic systems:consolidated market economies, hybrid economies, and statist market economies. Then,chapters on specific countries are organized around these three broad types. The editorsemphasize that the diversity of economic institutions in the former Soviet bloc ultimatelyillustrates the argument that capitalism is not a single coherent economic system, but vari-eties of capitalism.The hybridity of the format of comparative case studies explains why some lean clo-ser to comparative studies, while others lean closer to holistic case studies. At the sametime, comparative case studies are always a mix of the other two. The narrative focusof case studies orients them towards characteristics, processes and causalities within aspecific transitional context. This puts case studies in opposition to a formal comparativelogic of comparative studies. To a different extent, both holistic case studies andcomparative case studies of transitions have always emphasized the importance of localcontexts.Comparative studies, on the other hand, tend to use narratives as illustrations and tryto extract essential components of transitions across different geographical and culturalcontexts. Comparative studies have thus tended to not pay close attention to local con-texts and sometimes ignore differences between countries for the sake of constructing 1046 Post-Communist Transitions ª  2011 Blackwell Publishing Ltd  Sociology Compass  5/12 (2011): 1044–1057, 10.1111/j.1751-9020.2011.00423.x  transitional typologies. Tracing the evolution of comparative studies from less to moresensitivity to local social, cultural and historical contexts, would thus demonstrate thethorough transformation of the transitions literature that I claim has occurred. In the nextsection, I argue that the initial formal logic of comparative studies of transition was closeto the policy paradigm 5 put in place during the 1990s in transitional countries. Then, Iillustrate the transformation with specific examples from the literature. The Washington Consensus The ‘‘Washington Consensus’’ metaphor, as coined by Williamson (1990) and problema-tized by Joseph Stiglitz (1999), is an excellent tool to illustrate how much agreementthere was, until the 2000s, in the field of transitology. The ‘‘Washington Consensus’’referred to the shared consent of developed countries about the nature of the reforms tobe introduced in the former socialist bloc. It included a list of policy prescriptions thatfollowed three general themes: liberalization of the economy, privatization of state ownedenterprises, and institutional restructuring (Stiglitz 1999; Williamson 1990). These policieswere typically implemented using economic ‘‘shock therapy’’ 6 involving drastic structuralchanges within a compressed time frame (Balcerowicz 1995; Kolodko 2000).According to its ‘‘father’’, the ‘‘Washington Consensus’’ program included a list of tenreforms ‘‘widely needed in Latin America as of 1989’’ (Williamson 2003, 324). Accord-ingly, the reforms included: (i) free market components like the liberalization of prices,interest rates and foreign direct investment, and privatization; (ii) structural stability com-ponents like fiscal discipline and guaranteed property rights; and (iii) removal of barriersto doing business like complicated and high taxes, indiscriminate subsidies and variousregulations (Williamson 2002). In the 2000s, Williamson (2002) emphasized that the‘‘Washington Consensus’’ should have been viewed as a toolkit, rather than an ideology.However, in the 1990s, the term referred to desired destinations (both political andeconomic) set from outside of the regions of CEE and FSU. Alternatives called for emphasizing the existing diversity and design policies that take into account historical,cultural, and other contextual factors (Dahrendorf 2005; Schnellenbach 2005). However,the Washington Consensus silenced those alternatives. The literature on transitions hasbeen similar to the policies used in transitional countries – produced in the West, rigidand unrealistic   ⁄   idealistic. The following paragraphs establish this argument and contrastcontemporary transitology with that of the 1990s.The field of transitology is an interdisciplinary field that analyzes transitions from com-munism to capitalism. Transitologists are sociologists, anthropologists, economists, politi-cal scientists, but also legal scholars and ethnographers. With such diverse representation,one would expect lively debates and little (if any) agreement on the policies that shouldguide any given transition. However, the basic stances of transitologists have been verysimilar. Particularly during the 1990s, one could find very little dissent on the basics prin-ciples behind transitions.Throughout the 1990s, the field of transitology (with some exceptions) reflected theWashington Consensus metaphor in that it was setting up theoretical paths for the former communist countries that those countries needed to follow. The economist and politicalscientist corners of the field even assumed moral positions in making actual recommenda-tion and reprimanding the governments that were not following those recommendationsor deviating from the predetermined path (A˚slund 2007; Blanchard et al. 1994). The pri-mary concerns of the field were convergence 7 (Blokker 2005; Sztompka 1993) and con-solidation 8 (Bandelj and Radu 2006; Linz and Stepan 1996). Post-Communist Transitions 1047 ª  2011 Blackwell Publishing Ltd  Sociology Compass  5/12 (2011): 1044–1057, 10.1111/j.1751-9020.2011.00423.x  Current transitology has given up on the metaphor. Instead, it focuses on specific newconditions that have emerged from the former communist bloc (Myant and Drahokoupil2011; Wiarda et al. 2006). The actual experiences of the countries from the region sug-gest the need for significant changes in the field. Ideas and theories should be emergingfrom within those countries instead of being based on Western-constructed frameworks.A standing debate in transitology after 1989 revolved around the delineation of a spe-cific path for post-communist transitions to follow – gradual or radical (Balcerowicz1995; Brabant 1998). Debate is probably not the correct term to use since the Washing-ton Consensus determined the one right policy path to be followed. Critics of the ‘‘con-sensus’’, e.g. Dahrendorf (1990) and Stiglitz (1999) had not been popular. Stiglitz, inparticular, was accused of being a revisionist rather than a true critic of the radical reformagenda (A˚slund 2002, 104–6). On the other hand, the ‘‘father’’ of the idea never acknowledged its failure (Williamson 2002).The two camps have also been described as constructivists and Popperians (Ellmanet al. 1993). Constructivists stood behind the idea that the same model of transition couldbe applied to all parts of the post-communist world and problems could be dealt with ina contingency fashion. Furthermore, constructivists advocated that any short-term trou-bles countries might run into were actually a great thing and anything that might get lostin the process was not worth keeping. Popperians, on the other hand, stressed that transi-tions were likely to be works in progress for a long time and that replacing one utopianmodel with another would not solve issues of thorough social, economic, political, andcultural transformations.The constructivist camp dominated both the academic and the policy scene during the1990s. The Washington Consensus metaphor thus helps illustrate the dominance of theconstructivist camp and the tremendous issues with its approach. Both employed simplis-tic views about complex changes. Since the dual transitions in CEE and FSU involvedsimultaneous political and economic transformations (Encarnacion 1996) focusing on eco-nomic reform while bracketing all other aspects of the transformation proved to be doomof the Washington Consensus paradigm (Kolodko 2000).Shock therapy was a specific set of policy tools used to implement the WashingtonConsensus program. Shock therapy thus illustrates both the shortsightedness of the Wash-ington Consensus and the complexity of diversity of the contexts across the region. Themastermind of Polish shock therapy Balcerowicz defines shock therapy as a comprehen-sive maximum-speed transition to private market (Balcerowicz 1995, 179). Haggard andKaufman (1995, 151) explain the logic of shock therapy by pointing out that dramaticpolitical changes create a ‘‘honeymoon’’ period that allows the implementation of radicaleconomic reforms. Haggard and Webb add that these reforms create ‘‘irreversible macro-economic and institutional changes’’ (Haggard and Webb 1994, 186).While the economic changes are certainly an important part of the story, enough focusneeds to be also directed towards political changes. For example, Weiner (2007) investi-gates the long-term effects of shock therapy on female factory workers in the CzechRepublic. Weiner argues that shock therapy introduced stratification where there used tobe sameness. As a result, the female factory workers saw no change in their occupationalstatus while experiencing a tremendous drop in their socio-economic status. The latter change influenced both the female workers’ politics in a direction opposite to the eco-nomic reforms (Weiner 2007).While one can claim that the Czech example illustrates what happens to the losers after the implementation of economic shock therapy, the winners do not necessarily have avested interest in supporting the reforms either. Hellman (1998) argues the net winners 1048 Post-Communist Transitions ª  2011 Blackwell Publishing Ltd  Sociology Compass  5/12 (2011): 1044–1057, 10.1111/j.1751-9020.2011.00423.x
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