The postcommunist countries were amongst the most fervent and committed adopters of neoliberal economic reforms. Not only did they manage to overcome the anticipated domestic opposition to 'shock therapy' and Washington Consensus reforms, but many fulfilled the membership requirements of the European Union and even adopted avant-garde neoliberal reforms like the flat tax and pension privatization. Neoliberalism in the postcommunist countries went farther and lasted longer than expected, but why? Unlike pre-existing theories based on domestic political-economic struggles, this book focuses on the imperatives of re-insertion into the international economy. Appel and Orenstein show how countries engaged in 'competitive signaling', enacting reforms in order to attract foreign investment. This signaling process explains the endurance and intensification of neoliberal reform in these countries for almost two decades, from 1989-2008, and its decline thereafter, when inflows of capital into the region suddenly dried up. This book will interest students of political economy and Eastern European and Eurasian politics.
Hilary Appel is the Podlich Family Professor of Government and George R. Roberts Fellow at Claremont McKenna College. Her research examines the politics of post-Communist economic reform, fiscal governance, privatization, policies of retrospective justice, and issues of identity in Eastern Europe. Her publications include the books: Tax Politics in Eastern Europe: Globalization, Regional Integration and the Democratic Compromise (2011), A New Capitalist Order: Privatization and Ideology in Russia and Eastern Europe (2004), and two edited volumes. She has also published numerous articles appearing in journals including World Politics, Comparative Politics, and Comparative Political Studies. Mitchell A. Orenstein is Professor and Chair of Russian and East European Studies at the University of Pennsylvania. His research focuses on the political economy and foreign policy of post-Communist states. He is the author of two prize-winning books, Out of the Red: Building Capitalism and Democracy in Postcommunist Europe (2001) and Privatizing Pensions: The Transnational Campaign for Social Security Reform (2008), several prominent World Bank policy publications, and numerous articles appearing in journals including Comparative Politics, Comparative Political Studies, and Foreign Affairs.
1. Triumph and crisis of neoliberalism; 2. First phase: the Washington Consensus; 3. Second phase: Europeanization; 4. Third phase: avant-garde neoliberalism; 5. Competitive signaling and foreign direct investment; 6. The crisis of neoliberalism; 7. Revising transition theory.