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Poland and Ukraine Compared What Type of Capitalism in Post-Communist Europe ? Poland and Ukraine Compared Vlad Mykhnenko By the beginning of the 21st century, the East European political economies and examine academic discussion of post-communist ‘transition’ whether the newly-emerged institutional forms of has appeared to be almost over. A considerable post-communist capitalism function as number of post-communist, predominantly Asian, complementary – interdependent and mutually re- nations have appeared to be accomplishing their enforcing – systemic elements. Drawing on the transition by regression to consolidated autocracy empirical analysis of the region’s two largest and command economy. Hence the focus of most neighbouring political economies, I will argue that scholars of democratisation and marketisation has several parallel, i.e. non-converging, types of post- now shifted to the newly-established pluralist communist capitalism have been emerging on the market regimes of Eastern Europe. Towards what continent. Both possess a large number of type of system has this more approximate part of similarities with respect to the specific models of the post-communist world transited? What kind of modern capitalism identified in the literature; yet, capitalism has taken root in the region? How close none is fully analogous to them. is the emerging formation to a ‘Western standard’? The scope of this paper is limited to the Several scholarly contributions aimed at comparative institutional analysis of the two addressing some of these issues have appeared variant capitalisms in transition. Thus, the recently (see, for example, Lane 2000; Chavance questions as to why and how such divergent types and Magnin 2000; Buravoy 2001; Cernat 2002; of capitalism have been constructed in Poland and Martin 2002; Hunter 2003). This paper will follow Ukraine or how post-communist capitalism has the ambitious research agenda formed around the performed will not be addressed. question of what type of capitalism emerges in the post-communist countries by engaging into an extensive systemic comparison of Poland’s and TOWARDS A COMPARATIVE INSTITUTIONAL Ukraine’s post-communist transformations. In ANALYSIS OF POST-COMMUNIST CAPITALISM order to understand the complex phenomenon of capitalism in transition this paper will apply an It has become an established tradition in post- alternative comparative approach which draws its communist studies to understand and interpret the assumptions and explanations from two pioneering on-going systemic changes in Eastern Europe and works in Western political economy by Peter A. the former Soviet Union through various Hall and David Soskice (2001a), and Bruno measurements of those countries’ compliance with Amable (2003). Western political requirements and economic By applying the theory of institutional standards set up by international financial complementarity and the ‘varieties of capitalism’ institutions and advocacy groups. Since the early approach to the research problem of capitalism in 1990s, the European Bank for Reconstruction and the post-communist context, this paper will Development has been compiling its widely- propose a comparative institutional analysis of two Actes du GERPISA n°39 84 publicised annual ‘progress in transition’ index describe and account for the emergence of a which ranks twenty-seven post-communist distinctively East European capitalism. Yet, as countries on a scale of 1 to 4+, with ‘1’ these theorists of post-communist path-dependence representing a standard centrally-planned economy have admitted, if a full appreciation of the and ‘4+’ a standard free market economy of distinctive character of post-communist capitalism industrially advanced countries (e.g. EBRD 1994; can only be achieved through comparison to other 2003). Various ‘freedom’ and ‘democratisation’ relevant cases, how is one to undertake that indices regularly prepared by the Washington- comparison without already comprehending the based Freedom House (2003a; 2003b; 2004a; major contours of various post-communist cases 2004b) provide political ratings of ‘nations in themselves? (Stark and Bruszt 1998: Introduction). transit’ which measure the degree of democratic A significant consequence of the path- transition under post-communism from ‘total dependent approach lies in the sphere of repression’ to ‘total freedom’. The concept of methodology and new paradigm-seeking. As it has multiple or combined liberalisation (i.e. been argued elsewhere, what is currently lacking is simultaneous political and economic liberalisation) a paradigm of post-communist capitalism developed on the basis of such data-sets has laid developed around the concept of ‘divergence’, of the foundation on which the orthodox paradigm of different types of capitalism in the post-communist post-communist political economy has been world (Lane 1999). The theorists of post- constructed (for example, see Dethier, Ghanem, communist path-dependence have been the first to and Zoli 1999; Bunce 1999; Havrylyshyn and Van attempt to conceptualise this newly emerging Rooden 2000; Ekiert 2000; Dąbrowski and Gortat ‘composite’, ‘combined’ or ‘mixed’ capitalism in 2002; World Bank 2002: Part III). transition (e.g. Chavance and Magnin 1997). Notwithstanding the apparent policy relevance However, in order to respond to the research and expediency of the neo-liberal political problem posed by the path-dependence approach, economy of post-communism for the community of one has to tackle another central issue – the international donors, economic advisors and problem of major contours of capitalism itself. technical assistants, its core theoretical assumptions How can one compare different East European and deduced explanations have attracted major political economies and what determining variables criticisms. Some have argued that instead of should one employ? examining political economies of post-communist Europe according to the degree to which they Institutional Complementarity and conform to, or depart from, the ideal types of Hierarchy Western-style capitalism, one should be concerned Orthodox market economics has been long with variations and mutations evolving from the criticised for relying on distorting and recombination of the inherited institutional forms oversimplifying theoretical formalisations and with emerging new ones. Therefore, in place of mathematical models (Hodgson 1988), as well as transition (driven by hypothesised end-state), a for neglecting ‘the set of fundamental political, group of critics of the neo-liberal transition social and legal ground rules that establishes the paradigm have called for the study of path- basis for production, exchange and distribution’ dependent transformations, in which the (Davis and North 1971). Douglass North’s volume introduction of new elements occurs in on institutions, institutional change and economic combination with adaptations and reconfigurations performance (1990) – with its statement of the of already existing institutional norms (Stark and institutional framework as a major determinant of Bruszt 1998; see also Stark 1992; 1996; Grabher the performance of an economy – has provided a and Stark 1997; Stark and Bruszt 2001). new impetus for the study of previously neglected As David Stark and László Bruszt (1998) have ‘ground rules’. Generally following the rational maintained, one cannot grasp the contemporary choice logic, North defines institutions as the post-communist world through the old dualisms of humanly devised constraints that shape, structure, private/public, market/plan, capitalism/socialism, and motivate political, economic, and social since after the demise of state socialism such interactions; or, in other words, as the rules of the ‘method of mirrored opposition’ – comparisons game in a society that consist of both formal East-West – is no longer fruitful. They have institutions (constitutions, law, property rights) and proposed to engage in ‘comparative capitalisms’, informal constraints (customs, sanctions, norms, i.e. into the comparative institutional analysis of codes of behaviour, traditions) which reduce ‘really existing’ capitalisms vis-à-vis each other to uncertainty by establishing a stable (but not Actes du GERPISA n°39 85 necessarily efficient) structure to human interaction The Institutional Core of Modern Capitalism (1990; 1991). The question one has to put further concerns the Whilst generally accepting North’s definition of set of complementary institutional forms – institutions, a number of authors, however, have institutional arenas – which are located at the top of raised some further questions. The first issue is the institutional hierarchy. In other words, what whether different institutions are totally specific institutions are considered to be decisive in autonomous or whether they function in some influencing the performance and productive interdependent fashion. Masahiko Aoki (1994) has specialisation of a capitalist economy, and through been amongst the first to argue that, similar to the which one could potentially identify the main concept of ‘complementary goods’, there can exist features of post-communist capitalism? Prior to complementarity between the institutions of discussing the central characteristics of the political economy. In the basic case of emerging capitalist political economies in Poland complementary goods, pairs of goods for which and Ukraine, one should define the notion of consumption is interdependent, for example, capitalism. According to a sociological
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