91984 - Economics Of Transition In Eastern Europe

Learning outcomes

Student is expected to have an in-depth knowledge of Central European economies either in regional terms or looking at individual countries' economic strategies and policy choices particularly in market economies macroeconomic stabilization, microeconomic adjustment, privatization, and price, trade and financial liberalization.

Course contents

This is a comparative study of the Central and South East European countries’ economic transition since 1989, taught in two parts, the first focusing on the central European countries (the new EU member states or NMS) and the second part focusing on the south east European countries. The course also touches upon the experience of economic transition in Russia and the former Soviet republics for comparative purposes. The course begins by examining the basic features of the pre-1989 Soviet-type command economies, focusing on the origins of economic decline in the 1980s. We then look at individual countries’ economic strategies and policy choices in introducing market reforms in terms of macroeconomic stabilization, microeconomic adjustment, privatization, and price, trade and financial liberalization. We will examine the development of labour markets, unemployment, social costs and benefits of transition, as well as the transformation of social welfare systems, migration and demographic trends, healthcare and pension reform. We will look specifically at local firms and how factors from the past and new foreign investment have impacted enterprise development and economic structure. The process of EU accession and its effects on economic growth, as well as issues involved in entering the Euro zone will be studied. We examine infrastructure development, energy policies and tax policies. We look at the impact of the global financial crisis on these regions, economic recovery and the factors behind the new EU members’ recent economic dynamism compared to “old Europe”, including the movement of industry from western to eastern Europe and the role and impact of new investment from Russia, China and the Middle East. Finally, we analyse the impact of the Russian invasion of Ukraine on the region.

Module 1: East/Central Europe

Lesson 1: Course introduction, defining macro-economic terms,

Lesson 2: Origins of economic decline in Eastern Europe; features of Stalinist systems, 1950s

Lesson 3: Pre-1990 attempts at economic reform and economic collapse.

Lesson 4: Beginning of transition from command to market economy; Washington consensus, shock-therapy vs. gradualism

Lesson 5: Privatization

Lesson 6: State-building and social effects of transition – the Baltics vs. the Visegrad countries

Lesson 7: Enterprise Development and Foreign Direct Investment; different business environments: Russia vs. Central Europe

Lesson 8: EU accession and Euro zone entry; Maastricht criteria and new member states

Lesson 9: Impact of recent crises on CEE: the 2008-9 financial crisis, Covid and the Russian invasion of Ukraine

Lesson 10: Midterm exam, Module 1: 2-hour written essay exam on Module 1 topics

Module 2: Southeast Europe

Lesson 11: Yugoslav economy prior to 1990s

Lesson 12: Economic systems of Romania, Bulgaria and Albania prior to the transition

Lesson 13: The 1990s in ex-Yugoslavia, Romania, Bulgaria and Albania

Lesson 14: Privatization, FDI in the Balkans

Lesson 15: Social effects of transition in the Balkans – migration, remittances, unemployment, labor market dynamics, healthcare, education.

Lesson 16: EU integration and regional economic integration - Romania and Bulgaria, Western Balkans

Lesson 17: Southeast Europe between the EU, Russia and China

Lesson 18: Effects of Russian invasion of Ukraine on the Balkans

Lessons 19 and 20: Student presentations

Readings/Bibliography

• Myant, Martin and Jan Drahokoupil, Transition Economies: Political Economy in Russia, Eastern Europe, and Central Asia,(2010) Wiley-Blackwell
• Aslund, Anders, How Capitalism was Built: The Transformation of Central and Eastern Europe, Russia, and Central Asia (2007) Cambridge University Press
• Bohle, Dorothee and Bela Greskovits, Capitalist Diversity on Europe’s Periphery. Cornell University Press, 2012
• Galgoczi Bela and Jan Drahokoupil, Condemned to be left behind? Can Central and Eastern Europe emerge from its low-wage model? ETUI, 2017
• R.J. Crampton. The Balkans Since the Second World War (Pearson, 2002)
• Will Bartlett. Europe's Troubled Region: Economic Development, Institutional Reform and Social Welfare in the Western Balkans (Routledge, 2008).
• Milica Uvalic. Serbia’s Transition: Towards a Better Future (Palgrave, 2010)

• Sabrina P. Ramet. Balkan Babel, 4^th edition. (Westview Press, 2002)

Teaching methods

Traditional lecture format with abundant class participation.

Assessment methods

1. In-class written mid-term essay test on Module 1

2. Research paper of 3,000-3,500 words on topics covered in course with 10-minute powerpoint presentation summarizing research results, at end of course.

3. Oral exam on Module 2 after course ends

Teaching tools

Power point, on-line research of scholarly works

Office hours

See the website of Carolyn Ann Kadas