The Economics of Institutions and the Transition in Eastern Europe and the Former Soviet Republics

Abstract

"The recent political changes in Eastern Europe and the former Soviet Union pose a serious challenge to economics. The new authorities of the region, having abolished the Soviet model in its diverse manifestations and expressing a will to introduce a market economy of some form, urgently need advice on how to build the necessary institutions. The present paper is a survey of the new economics of institutions with an emphasis on its potential contribution to institutional change in the former Soviet economies. The purpose of the paper is twofold: to provide persons who are directly or indirectly involved with institutional change in the region with new tools and concepts that may help in their work, and also to encourage people in the field to provide the empirical insights that are much needed for the further development of the economics of institutions."