Business Development Policy of the Post-Socialist States of Central and Eastern Europe

Business Development Policy of the Post-Socialist States of Central and Eastern Europe

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Business Development Policy of the Post-Socialist States of Central and Eastern Europe


1. Title of Dissertation:
Small & Medium Business Development Policy of the Post-Socialist States of Central and Eastern Europe in their Transition to an Open Market Economy: Lessons and Applications for Cuba.
2. Aim of Dissertation & Motivation for Research:
The objective of this dissertation is to study the small and medium business policies developed in Central and Eastern Europe (CEE) as a result of their transition to an open market economy. The experience gained from the extraordinary process of transition, still under way in CEE and in the former Soviet Union (FSU), is rich with lessons that could guide policy making and action in a Cuba of the future. This dissertation attempts to distill some of these lessons and to explore those, which would facilitate the growth of small and medium size enterprises, the so-called SMEs, when transition finally unfolds in the island.
Many years after the initiation of transition in the former command economies of CEE and the FSU, one thing is certain: the process of transformation is far more complex and it takes far more time and resources than envisioned in 1989. The reason is that transition involves changing institutions, practices, and behaviors that have taken root in society during decades of centralized control and political repression. Another certainty is that it is possible to transform economic and political systems radically and end up with market economies and political democracies. Many years after the Berlin Wall fell; most production in countries in transition originates in the private sector and is transacted under free market conditions. In addition, most of the people live under democratic rule, where the people can vote governments out of office and have done so.
The decision to change came about at different times in different countries in the region. In fact, Hungary, Poland, and Yugoslavia had already started some reforms by the late 1980s, before the destruction of the Wall. In 1990, COMECON, the Soviet dominated free trade area, was dissolved as members decided to start trading in hard currency and at world market prices. The disappearance of the Soviet Union, where Gorbachev had started a re-structuring program under socialism, witnessed in 1992 the start of transiti...

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Lipton, D., and Sachs, J. (1990). “Creating a Market Economy in Eastern Europe: The Case of Poland,” Brookings Papers on Economic Activity, Vol. 1990, No. 1, pp. 75-133.

Poirot, C. (1996). “Macroeconomic Policy in a Transitional Environment: Romania, 1989-1994,” Journal of Economic Issues, Vol. 30, No. 4, pp. 1057-75.

Przeworski, A. (1991). Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America (Cambridge: Cambridge University Press).

Roland, G. (1994). “The Role of Political Constraints in Transition Strategies,” The Economics of Transition, Vol. 2, No.1, pp. 27-41.

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