Hilary Appel and Mitchell A. Orenstein: From Triumph to Crisis: Neoliberal Economic Reform in Postcommunist Countries

Abstract

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.