91984 - Economics Of Transition In Eastern Europe

Course Unit Page

Academic Year 2021/2022

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

Syllabus Part I : Economics of Transition in Central Europe Lecture 1: Introduction

  • Defining macro-economic terms
Lecture 2: Origins of economic decline in Eastern Europe
  • Features of Stalinist systems, 1950s
  • Soft budget constraint
  • Shortage economy
Lecture 3: Pre-1990 attempts at economic reform and economic collapse.
  • Pre-1989 economic reforms
  • Import-led growth
  • Foreign indebtedness
  • Socialist market economy
  • Collapse of Soviet-type systems
Lecture 4: Beginning of transition from command to market economy
  • Strategies and priorities of economic transformation – the Washington consensus
  • Macroeconomic stabilization and economic liberalization
  • Shock-therapy vs. gradualism
  • Economic recession, output fall
Lecture 5: Privatization
  • Political constraints on privatization
  • Centralized and decentralized privatization
  • Modes of privatization - Voucher privatization, management and employee buy-outs, direct sales.
  • Share of private sector in economies
Lecture 6: State-building and social effects of transition – the Baltics
  • Re-birth of 3 nations
  • Policy choices
  • International influences
Lecture 7: State-building and social effects of transition – the Visegrad countries
  • Priorities in the new welfare states
  • Taxation, public spending
Lecture 8: Enterprise Development and Foreign Direct Investment
  • Shock and recovery
  • Growth of new firms
  • Different business environments: Russia vs. Central Europe
  • Foreign direct investment
Lecture 9: EU accession and Euro zone entry
  • Accession effects on economic growth, FDI
  • Maastricht criteria and new member states
Lecture 10: Impact of global economic crisis on CEE
  • Varieties of capitalism
  • Economic conditions prior to the “crash”
  • Role of international financial institutions
  • Lessons learned

Mid-term exam: 2-hour essay exam on topics previously covered

Part II: Economics of Transition in Southeast Europe

Lecture 12: Basic features of Yugoslav economy prior to 1990s

Lecture 13: Economic systems of Romania, Bulgaria and Albania prior to the transition

Lecture 14: The 1990s in ex-Yugoslavia, Romania, Bulgaria and Albania

Lecture 15: Privatization and FDI in the Balkans

Lecture 16: Social effects of transition – migration, remittances, unemployment, labor market dynamics, healthcare, education.

Lecture 17: EU integration and regional economic integration – Romania and Bulgaria, Western Balkans

  • Trade integration
  • Conditionality, institutional reform
  • Lecture 18: Current and future trends in CEE and SEE
  • Current outsourcing trends between west and east – industries, strategies
  • Recent investment from China and the Middle East
Lectures 19 and 20: Student presentations, review


Core Textbooks:

  • 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
  • Lavigne, Marie, The Economics of Transition: From Socialist Economy to Market Economy (1999) Macmillan
  • Sznajder Lee, Aleksandra, Transnational Capitalism in East Central Europe’s Heavy Industry: From Flagship Enterprises to Subsidiaries (2016) University of Michigan Press
  • 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)

Teaching methods

Traditional in-person lectures outlined in Power point presentations with the possibility to simultaneously attend remotely. Abundant class participation.

Assessment methods

  1. Mid-term exam - a choice of 3 out of 5 essay questions on the first 9 topics, in 2 hours.
  2. Research project: Research paper of 3,000-3,500 words plus bibliography on a topic chosen from the themes we will be covering in class; oral presentation of main points of research paper (with power point) of 10 minutes.
  3. Final oral exam on all material covered in class.

Teaching tools

Power point, on-line research of scholarly works

Office hours

See the website of Carolyn Ann Kadas