Post-Socialist Transformation of Central and Eastern Europe at the Turn of the Century: Regional Development and Economic Inequality

The evolution of socio-economic systems is non-linear, it includes both the periods of smooth changes and subsequent abrupt transformational leaps. The overall structure of new prospects opens as early as at the stage of emerging evolutionary processes, and their forecast requires to analyze the historical premises and risks that are closely associated with the change of public attitudes. With the collapse of the Soviet Union, the newly independent states went through a transformational and evolutionary development stage that led them from a regional economy (since they actually had been the regions) to the national economy, while the countries in Central and Eastern Europe experienced a dramatic drift towards the European Union. This paper examines the results of almost 25-year-long transformation of these countries. The new states that emerged following the collapse of the Soviet Union went through three types of transformation. First, there were transformations on the ideological level. The transformations of the second type were purely economic. The third type can be described as institutional (including structural and financial) transformation. It has been demonstrated that one of the important reasons for modest economic performance in the post-Soviet space was the fact that the new states ignored and did not use the principles of regional policy and regional modernization in their state-building practice. A characteristic feature in the socio-economic evolution of Eastern Europe after 1990 was a sharply emphasized process of stratification and social differentiation occurring against the backdrop of insufficiently strong middle class and the polarization of income levels in different regions. The growing polarization of income levels in different regions represents the dominant trend of rising economic inequality.This research has been conducted with the support of the Russian Science Foundation (the Grant No. 14–28–00065) "Structural and Cyclical Paradigm of Economic and Technological Renewal of Macro-Social Systems (World and Russia in the First Half of the 21st century).

The post-socialist transformation of central and eastern european countries at the turn of the century: Regional development and economic inequality

The evolution of the socio-economic systems is a non-linear process and it contains periods with smooth changes and subsequent periods of sharp jump transformation. The general design of new prospects opens at a stage of the birth of evolutionary processes, their forecasting requires the analysis of the historical prerequisites and risks, which are closely integrated to the change of moods in society. With the collapse of the Soviet Union, the newly independent states have passed the transformational and evolutional stage of development from the regional economy (they actually were the regions) to the economy of the state; the Central and Eastern European countries have experienced a dramatic "drift" to the European Union. In the article, the results of almost 25 years' transformation of these states are considered. New states, formed as a result of the collapse of the USSR, passed throughout three types of transformation. Firstly, it is the transformation at the ideological level. The transformation of the second type was purely economic. The third type can be characterized as the institutional (including structural and financial) transformation. It is shown that one of the important reasons for the modest economic performance in the post-Soviet space is that newly independent states ignore and do not use in the practice the principles of regional policy and regional modernization. One of the important characteristic of the social and economic evolution of the countries of Eastern Europe after 1990 became the process of stratification and social differentiation of society with an insufficiently strong middle class and the polarization in income levels between the different regions. The increasing polarization in the income levels of the various regions acts as the dominating trend of the growing economic inequality.Рассмотрена экономическая эволюция постсоветского пространства. Представлены положительные и отрицательные стороны постсоветского трансформационного периода. Проанализированы региональное развитие и экономическое неравенство регионов в странах с низким уровнем доходов и догоняющим типом развития. Выявлены причины и последствия расширения Европейского союза.The research has been supported by the Russian Science Foundation (Research project No 14-28-00065 "Structural and cyclical paradigm of economic and technological renovation of macro-systems (World and Russia in the first half of the XXI century)"