Entrepreneurship in transition economies: the role of institutions and generational change

Saul Estrin () and Tomasz Mickiewicz
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Saul Estrin: London School of Economics

No 106, UCL SSEES Economics and Business working paper series from UCL School of Slavonic and East European Studies (SSEES)

Abstract: The transition economies have lower rates of entrepreneurship than are observed in most developed and developing market economies. The difference is even more marked in the countries of the former Soviet Union than those of Central and Eastern Europe. We link these differences partly with the legacy of communist planning, which needs to be replaced with formal market-supporting institutions. But many of these developments have now taken place, yet entrepreneurial activity still remains low in many places. To analyse this longer term issue, we highlight the necessarily slow pace of development of new informal institutions and the corresponding social attitudes, notably rebuilding the generalised trust. We argue that changes are even slower in the former Soviet Union than Central and Eastern Europe because communist rule was much longer, leading to a lack of institutional memory. We posit that changes in informal institutions may be therefore delayed until after full generational change.

Date: 2010-02
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Citations: View citations in EconPapers (31)

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Working Paper: Entrepreneurship in Transition Economies: The Role of Institutions and Generational Change (2010)
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