Microeconomic Change in Central and East Europe: Selected Papers from the Fifth World Congress of Central and East European Studies, Warsaw, 1995

Citation

Hoen, H.W. (2004), "Microeconomic Change in Central and East Europe: Selected Papers from the Fifth World Congress of Central and East European Studies, Warsaw, 1995", International Journal of Social Economics, Vol. 31 No. 4, pp. 445-447. https://doi.org/10.1108/03068290410523458

Leonard's volume on microeconomic change in Central and Eastern Europe is part of a series for which Ronal J. Hill is the general editor. The volumes in this series bring together a variety of papers that were presented at the Fifth World Congress of Central and East European Studies. In 1995, Warsaw hosted the participants of this huge conference. Whereas the Fourth World Congress in Harrogate (1990) took place in an atmosphere of euphoria, right after the collapse of communism, the Warsaw conference focused on the experiences of the first five years of transition from a centrally planned to a market economy embedded in a democratic order. The analyses in these volumes include themes as language and literature in post‐communist Europe, new reflections on the history of Stalinism, ethnic and nationality issues, as well as democratization and market reform. The volume edited by Leonard on microeconomic change is a constituent part of the latter.

The Warsaw conference took place in 1995 and, therefore, the reader might feel somewhat uncomfortable on the date of appearance of this volume: 2002. Of course, seven years reflect fullness, but the general idea is that in the 1990s the focus in transition debates gradually shifted from the trinity of stabilization, liberalization and privatization towards the implementation and the enforcement of market rules. In 1995, the (majority of) scholars were astinished by the huge decline in economic activity. At stake in current debates on microeconomic change are the issues of corporate governance and trust that are believed to be crucial for convalescence. The editor has to be credited, though, that most of the contributions in this volume include the relevant developments of the second half of the 1990s, although not all chapters reflect that empirically.

Apart from an introductory chapter of the editor, which is highly informative, the volume consists of three parts. The first addresses microeconomic developments in sectors and regions. There is a particular focus on defence industry in the Russian Federation. In the second part of the book the leading thread is enterprise behaviour. Pivotal is the extent to which different modes of privatization, such as ownership transfer by vouchers and employee ownership, yield different enterprise performances. In actual fact this part goes far beyond the insights that were available at the time of the conference. In the beginning of the 1990s privatization was just an aim in itself. Part three on trade and markets concludes the book. There are only two chapters in this part, which makes the analysis less extensive and less thorough than the foregoing two. But this minor point of criticism leaves unaltered the fact that the book is well‐structured.

It goes beyond the scope of this review to discuss all the chapters. Suffice it to mention two of them that can illustrate the strengths and weaknesses of the volume as a whole. Without disqualifying the other contributions, there are two outstanding empirical chapters on computable general equilibrium (CGE) models for economic policy analysis. The first is a joint Hungarian‐Rumanian production of Ernő Zalai, Constantin Ciupagea and Ana Voicu that addresses the CGE model for analyzing consistency of policy goals and trade‐offs between conflicting objectives. Although the model is first and foremost equipped for macroeconomic rather than for microeconomic policies, the authors succeeded in including specific variables that take into account the socialist legacy of decision mechanisms in the transition countries. The same holds true for Michael L. Wyzan's analysis on the Bulgarian economic policy. The strength of this chapter is to be found in the methodology rather than in the empirical testing, since the latter was restricted to the first half of 1990s. Due to the Bulgarian policy shift in 1997, many attention‐grabbing insights are missing.

To conclude, Leonard's volume on microeconomic change is well‐structured, based upon sound theoretical underpinnings, empirically well‐endowed and, despite its roots in the Fifth World Congress of Central and East European Studies in 1995, still informative.