To Scholars and Students Interested in Hungarian, East Europe'an, and Cold War History

to scholars and students interested in Hungarian, East Europe'an, and Cold War history. A basic knowledge of Hungarian history will be useful to gain full advantage of this work. The image of Hungary as the "first domino" in the eventual collapse of Soviet hegemony over Eastern Europe is perhaps a little too deterministic. Granville's text makes clear that she also believes that chance plays a role in decision making and history in general. Granville concludes that "multiarchival research tends to confirm the postrevisionists' theory about the Cold War: it was everyone's fault and no one's fault. It resulted from the emerging bipolar structure of the international system, a power vacuum in the center of Europe, and spiraling misconceptions." (p. 214) John C. Swanson Utica College of Syracuse University After the Collapse of Communism: Comparative Lessons of Transition. Edited by Mi- chael McFaul and Kathryn Stoner-Weiss. Cambridge and New York: Cambridge Uni- versity Press, 2004. vii, 264 pp. $60.00. This book derives from an autumn 2000 politics conference at Princeton marking one decade after the collapse of the Soviet Union. Six of seven papers focus on political de- velopments in Eastern Europe and the Former Soviet Republics (FSU). One paper deals with economics and four concentrate on Russia. The title suggests an overview of social progress a decade after the fall. The book is better understood as a collection of papers on politics each of which is a step along a research agenda. I recommend it to anyone concerned with democracy or with politics after the collapse. The tone of the book is disappointment in postcommunist performance. I feel more positive. Westerners were surprised by the peaceful collapse of the USSR. Afterward, we hoped for transition toward private markets and democracy. For many new states, though not all, this has been true. Michael McFaul (Table 1, page 73) scores 12 democracies, 11 J partial democracies and 6 non-democratic regimes. Since 2000, several more strides have taken been toward democracy. Democracy, private markets, and a legal system are public goods whose innate char- acteristics prevent efficient production by decentralized private markets. Large fixed costs, dispersed winners and entrenched losers, and non-exclusionary services inhibit private success. The actions required of bureaucrats and the elite to institute reforms are un- natural - divest oneself of power. Ironically, central planning is needed to install private markets, democracy and a legal system. Public choice analysis implies that many of the new nations, even Russia, have been quite successful. Most are moving, sub-optimally perhaps, towards markets and political plurality. Given the uniqueness of the context, political impediments, and social disrup- tions, leaders did pretty well. Rapid development toward economic and political free- doms is preferred, but a lot is in the glass even if it is not full. In the specific essays, Philip G. Roeder argues that prior segmentation into quasi- states preordained which nation-states would emerge. He supports this view with sophisticated logit regression, and tests his thesis that "segmentation" is a cause against it being a consequence of the process. Michael McFaul notes paths to democracy were inconsistent with political theory. Rather than cooperation and negotiation, power and ideas dominated the process. But are these transformations unique? They are to some extent. When else has the world wit- nessed the nonviolent dissolution of an authoritarian empire held together at the point of a gun? Once they realized they would not be shot, people massed at the Austrian- Hungarian border and later tore down the Berlin Wall. East Europeans quickly gravitated toward Western markets and democracies. Yeltsin continued to allow the process, freeing the Baltic States and letting the empire unravel. To McFaul's short list of key players, I would add Vaclav Klaus and Mikhail Gorbachev. Vladimir Popov shows that ineffectual government and un-enforced laws stymie economic reform. His analysis casts a wide net: Eastern Europe, FSU, China, and Vietnam. While I agree with much of his analysis, I think economic transitions have been relatively successful. Popov's thesis of failure relies on statistics produced by communist agencies before the collapse. These inflated economic measures imply poor post-communist performance, but they are misleading. Statistical agency staff in several new countries told me that data they had been producing before reflected growth goals given by superiors, not real out- comes. Communists view statistics as a propaganda tool. (Since Vietnam and China are still run by Communists, be wary of their data too.) Even Western statistical methods would generate biased SU GDP figures. In market economies economic aggregates indicate social welfare, because quantities and prices re- flect benefits at the margin to consumers. Thus, GDP components are weighted by rela- tive prices. Additional flaws in SU statistics are legendary. For example, the SU produced ball bearings; they were measured at costs of high value, but they were often wasted or used to produce unwanted, defective goods. This leads to serious measurement error. An economist in Hungary told me of a major state owned enterprise in Budapest that could not be privatized because it was worth about two percent of nominal value. After the collapse, many state owned enterprises folded. When large enterprises with lots of workers fail, measured GDP falls. Spontaneous home construction, private gardens, bar- ter trades, and grey market transactions spring up, but even sophisticated statistical agencies struggle to capture these activities. The result is an upward bias in the measured de- cline of transition output. Soviet GDP could be one third of official statistics. If one starts the analysis in Figure I (p. 97) in 1992, then post-communist performance looks pretty good. No one I talked to from 1991 to 1997 preferred the old regime, so this is not too unreasonable. Kathryn Stoner-Weiss attributes stalled Russian reforms to the center's inability to govern the periphery. Moscow could not collect taxes much less enforce laws. She produced a great data set from questionnaires of federal and regional officials followed by targeted interviews of over 800 officials from 72 provinces. I have a different twist to her analysis. Gorbachev and Yeltsin were dealing in treach- erous times - the social fabric was unraveling. Gorbachev, a socialist, had to defang the Byzantine central authority. Yeltsin, a true democrat, intentionally continued to discon- nect levers of central power. The man stood on a tank to face down a resurgent Commu- nist cabal. He knew he had to weaken institutions that might foster a communist come- back. Shouldn't we be grateful that Gorbachev and Yeltsin broke up that lethal empire with little bloodshed? Stoner-Weiss laments the insider privatization by Yeltsin's reformers and regrets the concentration of ownership among managers and employees. But who else knew enough to run these monsters? Speed was important to stop backsliding, and, besides, aren't eight to ten oligarchs better than one communist monopoly? Perhaps Gorbachev and Yeltsin did overdo it, but removing the Communist yoke was crucial for markets and plurality. Yeltsin fostered new power centers - business, the .

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