From market economics to institutional embedness of economic development: key ethical issues for transition societies

The debate over the role of ethics in transition economies is part of a larger debate concerning the interaction of state and markets in East Europe. This paper demonstrates the suitability of the institutional approach and the methodological disadvantages of the neoclassical theory concerning the key issues of this debate. It is suggested that transition economies need not to provide dichotomy between the end and the means of economic policies but rather need to reflect ethically how market and institutions interact efficiently, targeting in general economic and social welfare.