Toward Capitalism or Away from Russia?: Early Stage of Post-Soviet Economic Reforms in Belarus and the Baltics

While at the start of systemic economic transformations in Eastern Europe, both indigenous reformers and Western observers tended to interpret the events as a rationally conceived and executed replacement of an economic system of inferior performance by another one whose superiority was proven, the developments that followed the disintegration of the Soviet polity did not support this view. Shortly after the former Soviet republics gained independence, they exhibited marked variations in speed and sometimes direction of market transformation that could not be satisfactorily explained within the framework of economic theories used by promoters of reforms. In this paper I compare the early stages of economic transformation in Belarus, where reforms were eventually abandoned, with the three Baltic states (Latvia, Lithuania, Estonia), which are the most successful emerging market economies among the former Soviet republics. In this comparison I will attempt to highlight non-economic factors that might have contributed to this difference. Copyright 2002 The American Journal of Economics and Sociology.