The Great Transformation: Recession, Recovery and EU Conditionality

Pasquale Tridico

Chapter 2 in Institutions, Human Development and Economic Growth in Transition Economies, 2011, pp 74-113 from Palgrave Macmillan

Abstract: Abstract This chapter deals with recession and recovery in transition economies during the past 20 years of transformation. International constraints will also be examined. The aim is purely descriptive and informative. As far as the new Member States of the EU are concerned, this chapter will analyse the conditionality and compliance of the candidates. Recession was severe both in the CEECs and the FSRs during the transformation. However, I argue, during the period of transformation and economic recovery, the CEECs were, to some extent, favoured by EU conditionality and membership, while the FSRs were not involved in this process. At the same time, the old EU Member States (the EU-15) benefited greatly from trade with and FDI directed towards the CEECs. In fact, in the CEECs, labour costs are cheap and recourses as well as raw materials are abundant. Nevertheless, although it was a very important issue that influenced transition in the CEECs, EU membership was not the crucial factor in the relatively better performance of many CEECs with respect to the FSRs. Some new Member States, such as Romania, Bulgaria and to some extent Lithuania and Latvia, did not perform better than most of the FSRs. As such, crucial factors for development have to be found elsewhere, as I will show in Part III of this book.

Keywords: Czech Republic; Member State; Transition Economy; Purchasing Power Parity; Shock Therapy (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:stuchp:978-0-230-31388-0_3

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DOI: 10.1057/9780230313880_3

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