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Popular Attitudes TowardMarket Economic Principles andInstitutional Reform in TransitionEconomiesPetrik Runsta

a Department of Economics, University of Wisconsin-Eau Claire, 105 Garfield Avenue, Eau Claire, WI54702,USAPublished online: 08 Oct 2013.

To cite this article: Petrik Runst (2014) Popular Attitudes Toward Market EconomicPrinciples and Institutional Reform in Transition Economies, Review of Social Economy,72:1, 83-115, DOI: 10.1080/00346764.2013.845337

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Popular Attitudes Toward Market EconomicPrinciples and Institutional Reform in

Transition Economies

Petrik RunstDepartment of Economics, University of Wisconsin-Eau Claire,

105 Garfield Avenue, Eau Claire, WI 54702, USA

Abstract Transition countries display generally low levels of public support for

market economic principles during the 1990s—but more successful countries

display more support than less successful countries. The attitude difference is not just

the result of transition speed or success. Rather, the data suggest that the varying

levels of public support toward market economic principles existed initially and are a

cause of the distinct transition trajectories. Different historical legacies affected

popular attitudes long before the watershed moment of 1990.

Keywords: transition economies, institutional change, economic sociology, political

psychology

JEL Classification: A13, A14, P30

Though men be much governed by interest,

yet even interest itself, and all human affairs,

are entirely governed by opinion.

–David Hume

1. INTRODUCTION

The poster children of post-socialist transition, Poland, Slovenia, Slovakia,

Estonia, and the Czech Republic displayed annual GDP growth rates above 6% in

the 1990s, and per capita GDP in 2010 hovers around $20,000. In contrast,

Romania, Bulgaria, Belarus, the Ukraine, and others are catching up only slowly

to Western European standards of living. Stanley and Ratna (2000: 3) state that

“the countries that have done best are those who pursued their reform agenda most

q 2013 The Association for Social Economics

Review of Social Economy, 2014

Vol. 72, No. 1, 83–115, http://dx.doi.org/10.1080/00346764.2013.845337

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consistently.” Frye and Shleifer (1997) illustrate the importance of institutional

reform toward secureprivateproperty rights.Theycarryoutqualitative surveyswith

shop owners in Warsaw and Moscow. Businessmen in Poland report considerably

lower levels of extortion and corruption, thus more secure property rights.

Social scientists have established the institutional prerequisites of economic

growth (Acemoglu and Johnson 2005; Acemoglu et al. 2005; Bengoa and

Sanchez-Robles 2003; Boettke and Fink 2011; also see Peev and Mueller 2012;

Shirley 2008), secure property rights, sound monetary and fiscal policy, trade

freedom, and others. There are some critical voices. Hamm et al. (2012) argue that

more liberalization, as measured by an European Bank for Reconstruction and

Development (EBRD) index, led to worse outcomes. However, Peev and Mueller

(2012) discuss problems related to this index and provide a more detailed analysis.

The authors confirm the strong positive relationship between economic freedom

and growth in transition countries.

It is, however, not clear why some countries adopt these institutional

foundationsmore successfully than others. Treisman and Shleifer (2001) argue that

the slow down of institutional transition in Russia is a direct result of an attempt to

build a coalition for reform. This political strategy included compensation

payments to key players, who would have otherwise opposed the reform process.

As an unintended consequence, oligarchs and other pressure groups gained power

early on and turned against subsequent rounds of market reform.

Boettke et al. (2008) present another explanation. The farther the distance

between the informal institutions (such as local norms, customs, and practices)

and the formal political rules, the more will the inherent conflict that lead to a

change in the latter. If the underlying culture in a country is not supportive of the

formal institutional reform process, institutional changes will not be forthcoming.

Similarly, Inglehart (1997: 15), who studied value change across 43 countries

between 1970 and 1990, states “Any stable economic or political system has a

compatible and supportive cultural system which legitimates that system.”

Boettke et al. (2008) intuitively suggest that transition countries which display

lower support for market economic principles are less likely to implement

institutional reforms.

Several authors show that support for market reform was generally low among

Eastern European countries (Alesina and Fuchs-Schundeln 2007; Denisova et al.

2010; Hayo 2004; Kluegel and Mason 2004; Mason 1995; Schwartz and Bardi

1997). The previous literature has overlooked the fact that two distinct groups of

countries can be identified, and that the less successful transition countries display

significantly lower rates of support for market economic principles than the more

successful countries. It will also be shown that these differing attitudes are not the

result of the transition process. The differing attitudes existed initially and they

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partially caused the differing success of institutional reforms—leading to

economic growth, on the one hand, and stagnation, on the other.

The remainder of this paper is organized as follows. Section 2 summarizes the

background literature on informal institutions, social capital and norms, and

especially the literature on political attitudes in transition countries. Section 3

presents the two hypotheses. Did the discrepancy in attitudes toward market

economic principles exist initially? Or was it the result of different development

trajectories? Sections 4 and 5 discuss the empirical findings—focusing on political

attitudes and actual voting behavior. Section 6 summarizes the results and

discusses differing historical legacies between the two sets of countries.

2. LACKING SUPPORT FOR THE MARKET ECONOMY: THE

PREVIOUS LITERATURE ON INFORMAL INSTITUTIONS AND

POLITICAL ATTITUDES IN TRANSITION

The transition from a planned economy to a market-based economy is not just a

question of designing the correct formal institutions. Market societies are complex

systems. Any attempt at a comprehensive reform can only change a small part of

these complex requirements in practice (Boettke et al. 2008; Easterly 2006). A

broad literature has shown that transition countries differ from more prosperous

economies not just in their formal institutional structures. They also display

distinct patterns of social capital, trust, and civic norms, political attitudes and

more, all of which cannot be centrally implemented.

Putnam (1994, 2000) initiated the debate about social capital and its

relationship to successful democratic institutions. Social capital is comprises

either generalized norms or durable relationships and the resources associated

with group membership. Howard (2003) shows that civil society in European

post-socialist societies is in fact considerably weaker than in western countries.

However, Knack (2003) finds no evidence for the relationship between

associational membership and growth. A second component of social capital

however, trust and civic norms, has been shown to have a positive impact on

economic growth (Knack and Keefer 1997). The abrupt changes in transition

countries after 1989 affected this type of social capital negatively (Paldam and

Svendsen 2002; van Ees and Bachmann 2006), which resulted in lower growth

(Raiser et al. 2001).

This paper narrowly concentrates on one aspect of transition—political

attitudes toward market economic principles. For a more general literature review,

please refer to Roland (2000) and Aslund (2007).

Attitudes can be defined as the way an individual or a group of individuals

evaluates a person or a social issue. I am exclusively concerned with political

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attitudes. They refer to the mechanisms of structured living together in general

and, for the purposes of this paper, to the public support for the market system in

particular. Such a view might be described as a one-dimensional (1D) continuum.

A favorable view toward market economic principles affirms the coordinating role

of free exchanges and price signals in a society. The role of the state is confined to

supervision and enforcement of rules, which enable these exchanges (property

rights, sound money, etc.). On the other hand of the spectrum, the government is

seen as the primary coordinator of economic activity due to the existence of

market failure. Note that this 1D definition allows for some amount of

redistribution at the market economic end of the spectrum as long as private agents

are the providers of goods and services.

A number of authors across the social sciences have independently examined

political attitudes and compared it to western countries. Schwartz and Bardi

(1997) describe the differences in political attitudes based on student and teacher

samples from Western and Eastern European countries. They conclude that

individuals from formerly socialist countries emphasize hierarchy values. Hayo

(2004: 7) shows how support for market reform is generally low, based on the

Central and Eastern Eurobarometer database from 1990 and 1996. On a scale from

21 to 1, the mean support for free market reform across countries was 0.12.

Mason (1995) reaches the same conclusion by using data from the International

Social Justice Project for the following countries in 1991: Russia, Poland,

Slovenia, Bulgaria, Hungary, Czechoslovakia, Estonia, Germany, Holland, the

UK, Japan, and the USA. Although the author finds that many people somewhat

agree or strongly agree with the ideologically charged notion of a market economy

(average of 31.5% and 45%, respectively), once specific policy questions are

asked the respondents in formerly socialist economies show strong support for

alleviating income inequality, secure jobs, and a strong role for the Government in

the economy. “On all three orientations, equality, need, and role of the state, east

central Europeans lean toward a more egalitarian and statist system than do those

in western Europe, Japan or the US” (Mason 1995).

Rovelli and Zaiceva (2009) report a low and heterogeneous support for

transition, and a slow increase between 1991 and 2004, based on the Barometer

surveys. Alesina and Fuchs-Schundeln (2007) show that East Germans were more

in favor of state intervention than West Germans in 1997 and 2002. Finally,

Denisova et al. (2010) reports strong support for state intervention in Russia.

None of these authors identifies two distinct sets of countries with differing

attitudes, nor do they suggest a relationship between popular political attitudes

and institutional reform, although the data they present provide implicit hints. For

example, in Hayo (2004), we find that after controlling for inflation, the

unemployment rate, degree of privatization, and other factors the Czech Republic,

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Poland, Albania, and Estonia show relatively more support for market reform than

Romania, Russia, Ukraine, Armenia, Belarus, Georgia, and Slovenia. The results

in Rovelli and Zaiceva (2009) suggest that Poland, Slovenia, Estonia, and the

Czech Republic are more in favor of market reform than other transitional

countries. It will be shown later that these hints are important. Countries that were

more in favor of market economic principles subsequently performed better.

3. BOURGEOIS ATTITUDES AND TRANSITION: TWOHYPOTHESES

The first hypothesis claims that the unsuccessful reform process itself causes

dissatisfaction and hostilities toward market economic principles. Individuals

might, for example, misinterpret economic hardship in the early 1990s as evidence

against a market-based economy, or they might be dissatisfied with the pace and

credibility of the reform process (see Boettke 1995). Inglehart (1997) suggests that

when countries undergo a historical crisis, an authoritarian reflex can be observed,

which leads to stronger Government intervention as individuals look for stability

in the face of rapid change. Similarly, Aslund (2007) states “the problem was not

the people but the ability of the political process to translate their will into market

reform” (Aslund 2007: 203). Byung-Yeon and Pirrtila (2006) show that inequality

and unemployment negatively affect support for reforms.

The second hypothesis claims that different political attitudes are not just the

result of different economic trajectories. Rather, political attitudes already

differed at the beginning of the 1990s and subsequently affected the reform

trajectories. Differing historical legacies, discussed in Section 6, shaped citizen’s

beliefs and preferences long before the fall of the iron curtain and it would be a

mistake to regard the various countries as a homogeneous bloc whose populations

had identical beliefs in the year 1990. The formerly socialist countries were under

Soviet influence for varying amounts of time—where some of them had a tradition

of markets and democracies during the 1920s, whereas others moved from

feudalism to dictatorship. Some of these countries became atheist, whereas in

others, religion played an important role in the resistance against socialism.

Finally, Poland, Czechoslovakia, and Hungary—the countries with higher popular

support for market economic principles during transition—attempted to introduce

market reforms during the last 40 years of socialism already.

The alternative hypothesis stands in the tradition of scholars such as Max

Weber (1905 [2002]), McClelland (1961), and Hayek (1988) who emphasize the

role of ideas in the emergence of capitalism. McCloskey’s work (2006, 2010) is

the most recent contribution to this line of inquiry. She describes a change in

morality which preceded the advent of modern capitalism during the seventeenth

and nineteenth centuries. In her view, the market economy could not have

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developed without this transformation. She presents a variety of literary sources

(McCloskey 2010, esp. chap. 3) in order to illustrate her theory. She states that

Aristotle, Cicero, Thomas More, and St. Aquinas harbored deep suspicions about

merchants, trade, and the pursuit of profit. These activities were later morally

elevated, understood as honest professions, by Adam Smith, John Locke, J.S. Mill,

and Jane Austin. Unless there is a widespread appreciation of businessmen and

women, their profit-seeking activities and the trades which ensue a market society

cannot emerge or be sustained.

In summary, there are two viable hypotheses that will be addressed in the

empirical sections later. Are the differences in support for market economic

principles a response to different reform trajectories? Or are these attitudes the

result of historical legacies that existed at the beginning of the 1990s, and partially

caused the differing reform trajectories?

4. EMPIRICAL RESULTS: POLITICAL ATTITUDES

Some of the previous studies fail to adequately control for income (Mason 1995;

Schwartz and Bardi 1997). Income and educational attainment positively affect

support for market economic principles (see Caplan 2002, 2007). Inglehart (1997,

2002) hypothesized that the level of economic development affects political

attitudes systematically. Table 1(A) displays attitudes by country income, using

all available countries in the World Value Survey. The relationship between

income and attitudes is confirmed and needs to be considered in statistical tests.

First, I utilize Central and Eastern Eurobarometer data for the years between

1990 and 1993, collected by the European Commission. Political attitudes of those

early years will be more indicative of the historical legacy of each country and less

indicative of the success or failure of the reform process. The data consist of

Table 1A: Attitudes by GNI per Capita (World Value Survey, Wave 1, 1995)

Government

responsibility Left/right Private/state Equal/unequal

Strong leader

good/bad

GNI , 10,000 6.09 5.93 5.56 6.04 2.72

GNI . 10,000 5.7 5.48 4.61 5.51 3.09

GNI . 20,000 5.41 5.55 4.36 5.52 3.12

GNI . 30,000 5.83 5.04 4.34 5.18 3.09

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representative, repeated cross sections with a sample size of between 500 and

1,200 individuals per country in 1 year, after accounting for missing answers.

Table 1(B) displays average political self-identification on a left (1)–right (10)

Likert scale and supports for a free market economy as a binary choice (1 signifies

support) for all available transition countries.

The existence of two distinct clusters of countries is apparent. Individuals in

Poland, Estonia, and the Czech Republic (and, surprisingly, Romania) are in favor

of market economic principles, whereas individuals in Belarus, Armenia,

Table 1B: Political Attitudes in Post-Socialist Countries (Eurobarometer Data)

Left/right self-identification

(scales 1–10)

Free market economy right or wrong

(scales 1 and 2)

Unemployed

Year 1991 1992 1993 1990 1991 1992 1993

Georgia 2.24 Macedonia 1.63 28.3

Hungary 5.37 5.28 4.91 Belarus 1.62 1.4

Belarus 4.94 Armenia 1.6 5.3

Armenia 5.01 Latvia 1.31 1.53 8.7

Bulgaria 5.42 5.02 Ukraine 1.53 0.4

Macedonia 5.03 Russia 1.41 1.51 5.3

Russia 4.69 5.08 Slovakia 1.27 1.3 1.42 12.2

Slovenia 5.13 Czech 1.14 1.22 1.37 3.5

Ukraine 5.13 Estonia 1.3 1.37 6.5

Albania 5.79 5.44 Georgia 1.37 6.6

Poland 6.48 5.67 5.45 Poland 1.18 1.27 1.3 16.4

Romania 5.49 5.45 Bulgaria 1.34 1.21 1.27 16.4

Slovakia 5.78 5.51 5.67 Romania 1.57 1.27 10.4

Lithuania 5.94 5.76 Slovenia 1.26 14.4

Estonia 5.86 5.85 Hungary 1.17 1.15 1.24 12.1

Latvia 5.56 5.93 Lithuania 1.12 1.22 4.4

Czech 5.59 5.91 6.42 Albania 1.19 1.21 29.0

Mean 5.81 5.56 5.20 Mean 1.22 1.27 1.4

Notes: The mean for the attitude variables is denoted by the horizontal line. Attitude mean difference

between above and below mean countries is significant at a ¼ 0.01.

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Macedonia, Russia, and the Ukraine do not support them. This distinction strongly

corresponds to more and less successful institutional reform. Table 1(B) also

displays unemployment rates from 1993. The data are reported and discussed in

Blanchflower (2001). They are the result of EBRD surveys, and the numbers are

generally higher than the official country statistics. A country’s macroeconomic

situation does not appear to have a major impact. High unemployment countries

such as Poland, Hungary, and Slovenia are in favor of the free market economy,

and subsequently undertook lasting market reforms. Russia and Ukraine, on the

other hand, display relatively low unemployment rates but are nevertheless

skeptical about free markets. The Eurobarometer evidence thus supports the idea

that countries display different political attitudes at the beginning of the transition

process, i.e., it supports hypothesis 2.

Table 3 reports marginal effects of an ordered probit regression based on the

World Value Survey, a repeated cross section data-set. There are between 1,000

and 2,000 individual observations per country per wave. Descriptive statistics for

all variables can be found in Table 2. Individuals from all European transition

countries1 are part of the regressions, including East Germany. East Germany’s

“transition by merger” is quite distinct but excluding it has almost no effect on the

results. China’s transition has started much earlier than 1990, and it is non-

democratic. It was therefore not included. Other Asian transition countries such as

Laos, Cambodia, and Vietnam were not available in the data-set in wave 3 (around

1995).

The dependent variables are measured on a Likert scale. Support for

government intervention in the economy (1, low to 10, high), political self-

identification (1, left to 10, right), preference for private or state ownership (1,

private to 10, public), and preference for income equality (1, prefer more equality

to 10, prefer more inequality), which is competition good or harmful (1, good to

10, harmful), and preference for a strong leader (1, good to 4, bad).

The socialist dummy is 1 if the individual lives in a country which was part of

the USSR or a satellite such as Poland or the Czech Republic. The dummy

“success” is equal to 1 if the individual lives in Poland, Slovenia, Slovakia,

Estonia, Hungary, or the Czech Republic.

The results in Table 3 suggest that individuals in formerly socialist countries

are more likely to be in favor of government intervention and are more likely to

1 The socialist countries are as follows: Albania, Azerbaijan, Armenia, Bulgaria, Belarus, Croatia, the Czech

Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovakia, Slovenia,

Ukraine, Macedonia, Serbia, Bosnia, and East Germany; and the non-socialist countries are as follows: Argentina,

Australia, Bangladesh, Brazil, Chile, Taiwan, Colombia, Dominica, El Salvador, Finland, Japan, India, South

Korea, Great Britain, the USA, Mexico, New Zealand, Nigeria, Norway, Pakistan, Peru, Philippines, Puerto Rico,

South Africa, Spain, Sweden, Switzerland, Turkey, Uruguay, Venezuela, and West Germany.

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Table

2:DescriptiveStatistics(W

orldValueSurvey,Wave3,Sam

ple

Means)

Description

All(SD)

Socialist

(SD)

Non-socialist

(SD)

Socialist

Central,Eastern

European,andform

erSovietUnioncountries

0.395

10

Decline93

%GDPdeclinebetween1989and1993bycountry

–32.02

0

Success

DummyforPoland,Czech

Republic,Hungary,Estonia,

Slovenia,Slovakia

0.08

0.20

0

Male

0.481

0.457

0.491

Age

40.85

43.07

39.83

Married

0.57

0.63

0.57

Cohab

Cohabitationdummy

0.05

0.03

0.06

Divorced

0.04

0.05

0.03

Single

0.21

0.18

0.22

Children

Number

ofchildren(0–8)

1.85

1.63

1.96

Edulevel

Educational

attainment(8

levels)

4.52

4.8

4.4

Full_time

Dummy

0.36

0.37

0.35

Part_time

0.08

0.05

0.09

Self_em

ployed

0.09

0.05

0.11

Housewife

0.13

0.06

0.16

Student

0.06

0.05

0.07

Unem

ployed

0.09

0.08

0.09

GNI1995/capita

GNIper

capitabycountry

8,330

5,600

9,574

(continued)

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Table

2:Continued

Description

All(SD)

Socialist

(SD)

Non-socialist

(SD)

Governmentresponsibility

Individuals(1)orgovernment(10)should

takemore

responsibility

6.34(3.34)

7.16(2.69)

5.76(3.12)

Left/rightspectrum

Politicalself-identification,left(1),right(10)

5.63(2.30)

5.33(2.15)

5.83(2.37)

Private/stateownership

Private(1)orstateownership

(10)ofbusinessesshould

beincreased

5.18(2.91)

5.46(2.88)

4.98(2.92)

Income(equality/inequality)

Incomeshould

bemore

equal

(1).Weneedlarger

inequalityas

incentives

(10).

5.79(2.98)

5.98(2.89)

5.67(3.03)

Strongleader

good/bad

Astrongpoliticalleader

isverygood(1)orvery

bad

(4)

2.76(1.01)

2.65(1.02)

2.83(1.00)

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Table

3:Ordered

Probit(W

orldValueSurvey

Data)

Wave3

Wave5

1994–1999

2005–2008

Government

responsibility

Left/right

spectrum

Private/state

ownership

Government

responsibility

Left/right

spectrum

Private/state

ownership

Socialist

0.449***

20.319***

0.086***

0.070***

20.189***

0.073***

Socialist*success

20.042***

0.231***

0.126***

20.059**

0.145***

0.159***

Socialist*decline

20.001*

0.000***

20.001***

0.006***

0.003***

20.004***

log_GNI1995/2005

20.144***

20.120***

20.182***

20.009***

20.072***

20.059***

Male

20.064***

0.043***

20.161***

20.004

0.038***

20.071***

Age

0.010***

20.011***

0.004**

0.004**

20.006***

0.003*

Age^2

20.000***

0.000***

20.000

20.000***

0.000***

0.000

Married

20.085***

20.011

20.039***

20.061***

0.027**

20.029***

Cohab

20.073***

0.053**

0.105***

20.151***

0.03*

0.025

Divorced

20.054**

20.044*

20.066***

20.115***

20.056**

20.107***

Children

0.006*

0.019***

0.007**

0.017***

0.002

20.027***

Educational

level

20.033***

20.000

20.042***

20.033***

0.002

20.029***

Full_time

0.007

0.025

0.012

20.056***

20.087***

20.086***

Part_time

20.006

0.011

20.003

20.045**

20.058**

0.11***

Self_em

ployed

20.011

0.093***

20.169***

20.152***

20.031*

0.23

Housewife

20.017

0.127***

20.042**

0.125***

20.134***

0.177***

(continued)

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Table

3:Continued

Wave3

Wave5

1994–1999

2005–2008

Student

0.081***

0.006

0.021

20.041**

0.139***

0.109***

Unem

ployed

0.138***

20.022

0.042**

0.019

20.066***

0.093***

Thresholds

122.36

22.86

20.2.72

21.55

22.27

21.89

222.12

22.62

22.45

21.27

22.01

21.60

321.80

22.25

22.12

20.92

21.67

21.29

421.58

21.96

21.88

20.64

21.40

21.02

521.38

21.14

21.41

20.41

20.74

20.54

621.04

20.77

21.20

20.04

20.35

20.28

720.83

20.48

21.00

0.20

20.04

20.02

820.54

20.12

20.71

0.46

0.34

0.29

920.29

0.10

20.47

0.74

0.59

0.55

Obs

64,000

50,000

62,500

71,000

53,000

65,000

Income(equality

orinequality)

Competition

(goodorharmful)

Strongleader

(goodorbad)

Income(equality

orinequality)

Competition

(goodorharmful)

Strongleader

(goodorbad)

Socialist

20.066***

0.040**

0.035**

20.290***

0.113***

20.305***

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Socialist*success

20.051***

20.060***

0.236***

0.246***

0.089**

0.573***

Socialist*decline

0.004***

0.003***

20.009***

0.004***

20.001**

20.008***

log_GNI1995

20.100***

0.005***

0.152***

20.121***

0.079***

0.059***

Male

0.027***

20.108***

20.009

0.034***

20.097***

20.047***

Age

20.002

20.009***

0.009***

20.001

20.002

0.020***

Age^2

0.000

0.000***

20.000***

0.000

0.000

20.000***

Married

0.019*

20.118***

0.029**

20.012

20.050***

20.018

Cohab

0.039*

20.071***

20.034*

0.064***

0.023

0.027

Divorced

20.018

20.087***

0.032

20.049**

0.034

0.081***

Children

20.001

0.016***

20.010***

0.018***

20.014***

20.007**

Edulevel

0.066***

20.028***

0.054***

0.048***

20.044***

0.048***

Full_time

20.055***

0.019

0.030*

0.062***

0.091***

20.088***

Part_time

20.091***

0.062***

0.093***

20.025

0.145***

20.083***

Self_em

ployed

0.047**

20.010

0.045**

0.097***

0.107***

20.155***

Housewife

20.051***

0.045**

20.049**

0.047***

0.038**

20.183***

Student

20.111***

0.033

0.157***

20.000

0.015

20.052**

Unem

ployed

20.199***

0.061***

20.047**

20.000

0.122***

20.109***

Thresholds

121.74

0.107

0.488

21.95

20.28

20.31

221.53

0.435

1.34

21.71

0.08

0.56

321.26

0.828

2.20

21.46

0.44

1.32

421.05

1.11

21.25

0.77

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Table

3:Continued

Wave3

Wave5

1994–1999

2005–2008

520.71

1.56

20.93

1.22

620.50

1.78

20.71

1.47

720.24

1.96

20.37

1.71

80.16

2.21

0.04

1.99

90.41

2.38

0.34

2.22

Obs

64,000

58,500

56,000

68,000

66,473

63,000

*,**,and***denote

significance

levelsof10%,5%,and1%.

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identify themselves as being on the left. The magnitude of the effect is

considerable. On a scale from 1 to 10, individuals from post-socialist countries

remain one to two ranks higher than individuals from countries without socialist

history. Individuals from former socialist countries are also less in favor of

competition and are more in favor of state ownership of firms, even though the

effect is small in both, waves 3 and 5. In line with the overall trend, the socialist

dummy affects preferences for inequality negatively and preferences for a strong

leader positively, although the latter result only holds in wave 5.

Individuals from the more successful countries (Poland, Slovenia, Estonia, and

the Czech Republic) are less in favor of state intervention, and see themselves as

being farther to the right than individuals in less successful transitional countries.

Individuals in successful transition countries are also less in favor of a strong

leader, more in favor of competition (wave 3), and less in favor of equality in wave

5. However, there is also a stronger preference for state ownership in successful

countries.

Overall, Table 3 provides some evidence for a difference in attitudes toward

the market economy in more and less successful countries, and thus support

hypothesis 2. Apart from the variables equality/inequality and government

ownership, successful countries are more in favor of market principles in four out

of six analyzed variables. There is very limited evidence for hypothesis 1 as well.

Successful countries only become less in favor of inequality after 15 years of

transition have passed.

After performing the procedure explained in Williams (2006), we learn that the

parallel regression assumption has been violated. In particular, the coefficients for

“socialist” and “success” differ across the categories of the dependent variable. A

generalized ordered logit model is utilized and the results are reported in Table 5.

The results do not alter the conclusions drawn above but they add detail. This table

reports log odd ratios. The coefficient for the variable “socialist” translates into an

odds ratio of expð1Þ ¼ 2:72. Thus, in wave 3, an individual from a formerly

socialist country is about three times more likely to be in a higher rank category

than one compared to an individual from a non-socialist country. As the rank

category increases the effect becomes smaller, yet still considerable. Individuals

from a socialist country are about 1.75 times more likely to be in a higher rank

category than 9. The likelihood that they self-identify as “right” on the political

spectrum is only between 40% and 80% of western individuals. They are slightly

more likely to demand state intervention (by a factor between 1.12 and 1.39) and

are slightly less likely to accept inequality across most rank categories (by a factor

of 0.86 and 0.94). The effect of socialism on strong leadership is more polarized.

Individuals in socialist countries are more likely to classify a strong leader as very

bad and fairly bad, but there also seems to be a group of people who believe a

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strong leader to “very good.” Finally, the unreported coefficients of a linear

regression confirm the robustness of the results.

As a second robustness check, I use two-stage least squares. This specification

is used in order to address potential endogeneity problems by separating the effect

of the decline in output and the socialist and success dummies. Equation (1)

represents the OLS regression, where political attitudes are explained by

economic output decline and gross national income (GNI) in 1995. Only the part

of attitudes (E) which is not explained by these variables is then used as the

dependent variable in regression (Equation (2)):

Attitudes ¼ aþ b * declineþ g *GNI 1995þ E ð1ÞE ¼ aþ b * socialistþ g * successþ d *X þV: ð2Þ

The socialist country dummy and the dummy for successful socialist countries

are the main explanatory variables. The same set of control variables is used. The

results in Table 4 confirm the earlier results (Table 5).

Over time, attitudes in formerly socialist countries approach the western

countries for the topics such as government responsibility, left/right, and the

private/state spectrum. They become, however, more pronounced for the topics

equality/inequality and strong leadership, which probably reflect the socio-

economic uncertainty and economic decline of the early transition years as

hypothesis 1 suggests.

Summarizing the results of Eurobarometer and World Value Survey,

previously socialist countries in general are less in favor of market economic

principles than others. The data mostly support hypothesis 2. The countries whose

population is initially more in favor of market economic principles experienced

more success in their subsequent transition process (with the exception of state

ownership and preference for equality) than the countries with lower levels of

support.

5. EMPIRICAL RESULTS: ELECTION OUTCOMES

It might be criticized that survey answers can be untruthful. This section, however,

shows that countries with a higher support for market institutions are also less

likely to vote for socialist parties and more likely to vote for market reforms, and

they subsequently perform better. The close correspondence between attitudes and

election outcomes discussed later shows that preference falsification is not a

concern—citizens put their votes where their mouth is.

Table 6 (only available in the online edition) displays parliamentary election

results for a selection of more and less successful transition countries during the

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Table

4:Two-StageLeastSquares—

WorldValueSurvey

Government

responsibility

Left/right

spectrum

Private/state

ownership

Income(equality/

inequality)

Competition

(goodorharmful)

Strongleader

(good/bad)

Stage1

log_GNI1995

20.14***

20.18***

20.30***

20.33***

0.18***

0.09***

Decline

0.023***

20.01***

20.00***

0.00***

0.00*

20.01***

Stage2

Socialist

0.67***

20.27***

0.34***

0.03

0.23***

20.07***

Success

20.19***

0.35***

0.18***

20.11***

20.16***

0.28***

Note:Controlvariablesnotreported.

*,**,and***denote

significance

levelsof10%,5%,and1%.

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Table

5:Generalized

Ordered

Logit—LogOddRatios(CoefficientsforOther

ControlVariablesNotReported)

Wave3

Wave5

Rank

category

Socialist

Socialist*

success

Socialist*

decline

log_GNI

95

Socialist

Socialist*

success

Socialist*

decline

log_GNI

95

Governmentresponsibility

11.00

0.14

0.003

20.04

0.37

0.01

0.12

20.97

0.05

0.002

20.09

0.16

–0.012

0.09

30.94

–0.09

0.004

20.11

0.20

20.17

0.01

0.03

40.93

20.11

–20.19

0.19

20.18

0.01

–

50.86

20.07

–20.23

0.19

20.18

0.01

–

60.78

–20.001

–0.26

0.16

20.21

0.01

–

70.73

–20.003

20.32

0.13

20.09

0.01

20.06

80.70

20.05

20.004

20.37

–20.02

0.01

20.10

90.56

20.09

20.004

20.38

––

0.01

20.13

Left/right

120.22

0.27

0.01

0.28

––

0.01

0.18

220.38

0.36

0.01

––0.17

–0.02

0.12

320.47

0.39

0.01

–20.13

0.22

0.01

–

420.53

0.40

–20.09

20.16

0.33

0.01

20.06

520.59

0.40

–20.22

20.43

0.14

0.00

20.17

620.63

0.33

–20.28

20.47

0.24

0.00

20.17

720.62

0.36

–20.38

20.43

0.33

0.00

20.20

820.68

0.41

–20.47

20.51

0.51

0.01

20.28

920.80

0.37

–20.46

20.60

0.71

0.01

20.32

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Private/state

10.33

0.39

––

0.25

–20.007

0.07

20.22

0.29

–20.09

0.12

–20.006

0.04

30.19

0.26

–20.19

0.08

0.13

20.006

20.01

40.15

0.25

20.002

20.27

0.12

0.23

20.007

20.07

50.11

0.32

20.005

20.41

0.11

0.17

20.006

20.12

60.12

0.32

20.006

20.49

0.09

0.27

20.004

20.15

70.12

0.35

20.007

20.56

0.15

0.42

20.006

20.20

8–

0.09

20.003

20.57

0.17

0.47

20.006

20.26

9–

0.09

20.003

20.57

–0.64

20.006

20.26

Equality/inequality

10.15

20.23

0.014

0.10

20.13

–0.009

20.04

2–

20.24

0.015

0.09

20.29

0.21

0.007

20.08

320.06

20.26

0.013

–20.50

0.34

0.009

20.14

420.08

20.19

0.01

20.06

20.54

0.41

0.008

20.19

520.13

20.05

0.006

20.13

20.61

0.46

0.008

20.19

620.15

–0.005

20.20

20.65

0.57

0.009

20.21

720.15

–0.002

20.30

20.53

0.55

0.008

20.24

820.15

20.07

0.003

20.36

20.50

0.41

0.007

20.30

920.14

20.20

0.003

20.37

20.72

0.59

0.012

20.30

Strongleader

(goodorbad)

120.15

0.37

20.007

0.39

20.70

1.15

20.006

0.19

20.09

0.30

20.02

0.28

20.52

1.09

20.01

0.09

30.19

0.46

20.03

0.19

20.38

0.69

20.02

0.07

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1990s. The data have been assembled from various sources. It can be seen that

ideologies and political organizations do not change overnight; the specter of

communism still haunted all transition countries in the 1990s. It can also be seen

that periods of liberalization and institutional reform are followed by socialist

backlashes, as for example in Hungary or Slovakia.

Overall, communist and socialist parties are more dominant in less successful

transition countries. In Moldova, Ukraine, Bulgaria, and Russia, citizens favored

socialist parties in their early elections. Similarly, the Party of Social Democracy

in Romania had roots in a socialist ideology, and according to Ibrahim and Galt

(2002) the name neo-communist has been applied often to those in power after

1989. On the other hand, socialist parties never achieved an early winning position

in any of the successful countries. Poland and the Czech Republic are especially

informative. Both countries experienced popular uprisings against Soviet rule, and

neither of them was led by socialist parties after 1990 although the Polish

Democratic Left Alliance had roots in the Marxist Polish United Workers Party.

Similarly, Hungary experienced a popular uprising against central planning in

1956. Its political elite steered toward democracy and market reforms even before

1989, fueled by popular movements such as Fidesz, although it experienced a

temporary backlash in the 1994 election. Estonia and Slovenia displayed a strong

preference for liberal and conservative parties. The Lithuanian Democratic Labor

Party encouraged privatization and foreign investment despite the ties to its

predecessor, the Communist Party of Lithuania, and, according to news reports,

the decision to sever all ties to Moscow was a popular one in the country.2 In the

election 1996, the conservative and Christian Democratic Party took over winning

positions.

Table 6 also utilizes a unique data-set created by the manifesto project of the

Social Science Research Center Berlin (WZB). The data-set comprises political

parties and their programs across countries and time. The variables measure the

percentage of sentences expressing politically relevant topics. For the purposes of

this paper, the categories Pr Entpr, Incntvs, Planning, Cntrl, National, and Marx

are investigated. They correspond to favorable mentions of free enterprise, supply

side-oriented policies, favorable mention of economic planning, positive and

negative mentions of protectionism, the need for central control over economic

activity, favorable mentions of nationalization, and positive references to Marxist

analysis.

The leading party in all successful countries endorsed supply side policies or a

private enterprise economy with the exception of Lithuania, where support for

market economic principles started to show up in 1996. However, as mentioned

2 “Algirdas Brazauskas” in The Telegraph, 27 June 2010.

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Table

6:Parliam

entary

ElectionResultsin

Post-SocialistCountries

%

Pr

Entpr

Incntvs

Planning

Prtctsm

Cntrl

National

Marx

Moldova

1994

Dem

ocratic

Agrarian

Party

ofMoldova

(CommunistAg.Elite)

43

0.7

1.4

00/0.7

00

0.7

SocialistParty

22

00

00/0

00

5.7

1998

Party

ofCommunistsoftheRepublicof

Moldova

30

0.6

4.1

01.5/0

5.3

0.9

5.6

Dem

ocratic

Convention—

ElectoralBloc

19

2.8

4.3

01/0

00

0

ForaDem

ocratic

andProsperousMoldova—

ElectoralBloc

18

2001

Party

ofCommunistsoftheRepublicof

Moldova

50

3.9

1.3

01.3/0

5.3

011.8

BraghisAlliance

13.6

Ukraine

1994

CommunistParty

ofUkraine

12.7

00

0.7

0/0

1.5

0.7

35

People’s

Movem

entofUkraine

5.5

Independents

66

1998

CommunistParty

ofUkraine

24.7

1.1

00

2.2/0

1.1

020.3

People’s

Movem

entofUkraine

9.4

0.9

4.3

0.9

0/0

1.7

00

SocialistParty

ofUkraine—

PeasantParty

ofUkraine

8.6

1.3

0.6

02/0

2.7

1.3

1.3

Belarus

1995

Belarusian

Party

ofCommunists(42seats)

00.8

00/0

2.5

012.3

(continued)

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Table

6:Continued

%

Pr

Entpr

Incntvs

Planning

Prtctsm

Cntrl

National

Marx

Questionable

Independents(95seats)

Election

Alexander

Lukashenko(autocratic

president,anti-reform

)

Bulgaria

1994

BulgarianSocialistParty

43.4

11.3

11/3.2

1.3

0.3

0

UnionofDem

ocratic

Forces

24.1

20.9

00.2/4.9

0.7

0.9

0

1997

United

Dem

ocratic

Forces

52.3

1.8

1.8

00/0

0.8

00

BulgarianSocialistParty

22.1

0.7

10

0/0

0.8

00

Romania

1992

Dem

ocratic

National

SalvationFront

47.2

3.5

0.6

00/0

00

0

RomanianDem

ocratic

Convention

31.1

6.5

0.9

2.3

0.1/2.7

2.3

0.14

0

1996

RomanianDem

ocratic

Convention

30

01.3

4.1

0/0

00

0

Party

ofSocial

Dem

ocracy

21.5

2.1

0.7

9.5

0.6/2.6

2.5

0.7

0

2000

Party

ofSocial

Dem

ocracy

36.6

0.76

5.51

1.1

0.2/0

0.6

00

Greater

Romania

Party

19.4

Russia

1995

CommunistParty

oftheRussianFederation

22.3

00.9

00/0

0.9

3.9

0

Liberal

Dem

ocratic

Party

ofRussia

11.1

0.8

1.5

09/0

1.5

4.5

0

OurHome—

Russia

10.1

6.9

1.1

01.1/0

00

0

1999

CommunistParty

oftheRussianFederation

24.3

01

00/0

11

1

Interregional

Movem

ent“U

nity”

23.3

1.8

00

0.9/0

00

0

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Arm

enia

1995

RepublicanBloc

42.6

2.5

00

0/0

3.8

00

Questionable

(Largestparty:Pan-A

rmenianNational

Movem

ent)

Election

Sham

iram

16.8

Arm

enianCommunistParty

12.1

Georgia

1995

UnionofCitizensofGeorgia

25.2

3.5

1.8

00

0/2.6

4.8

0

CivilWar

National

Dem

ocratic

Party

8.4

1999

UnionofCitizensofGeorgia

44.5

00.8

.90/0

7.6

00

Revival

ofGeorgia

Bloc

26.8

Czech

1992

ODSandKDSCoalition(Conservative)

29.7

5.0

2.2

10/0.3

20

0

Republic

ODS

9.5

0.56

00/0.5

00

0

LeftBloc(Communist)

14

0.6

1.5

01.5/0

2.4

0.6

0.9

Social

Dem

ocracy

6.5

Liberal-Social

Union

6.5

1996

Civic

Dem

ocratic

Party

(Conservative)

29.6

0.81

4.5

0.5

0.5/0.3

0.1

00

Czech

Social

Dem

ocratic

Party

26.4

0.8

5.9

0.8

2.1/0

1.3

00

CommunistParty

ofBohem

iaandMoravia

10.3

Poland

1991

Dem

ocratic

Union

12.3

9.9

0.3

1.5

0/4.3

0.2

00

Dem

ocratic

LeftAlliance

12

0.8

0.4

00.8/0

1.7

2.1

0

1993

Dem

ocratic

LeftAlliance

20.4

2.1

10.5

4.2

2.1/4.2

011.6

0

Polish

People’s

Party

15.4

00

02.7/6.7

00

0

Dem

ocratic

Union

10.6

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Table

6:Continued

%

Pr

Entpr

Incntvs

Planning

Prtctsm

Cntrl

National

Marx

1997

SolidarityElectoralAction(Liberal

Conservatism)

33.8

0.5

5.3

00/0

00

0

Dem

ocratic

LeftAlliance

(Social

Dem

ocracy)

27.1

012.1

00.4/0

00

0

Freedom

Union(Classic

Liberalism)

13.4

Slovenia

1992

Liberal

Dem

ocracyofSlovenia

23.5

11.8

00

0/0

00

0

SloveneChristianDem

ocrats

14.5

2.2

2.5

00/0

00

0

United

ListofSocial

Dem

ocrats(U

nited

List)

13.6

00

00/0

00

0

1996

Liberal

Dem

ocracyofSlovenia

27

2.6

1.1

00/0

0.7

00

SlovenianPeople’s

Party

19.4

5.6

00

0/0

00

0

Social

Dem

ocratic

Party

ofSlovenia

16.3

2.4

2.4

2.4

0/0

00

0

Estonia

1992

Bloc“Fatherland”(Conservative)

22

2.51

8.4

00/0

00

0

Bloc“SafeHome”

(Liberalism)

13.6

07.6

00/0

00

0

Bloc“PopularFront”

(Center)

12.2

010.7

00/0

00

0

1995

Bloc“C

oalitionParty”and“C

ountry

People’s

Union”

32.2

2.4

7.7

0.7

0/3.3

00

0

EstonianReform

Party

16.2

1.8

8.5

55/1.2

00

0

EstonianCenterParty

14.2

Lithuania

1992

LithuanianDem

ocratic

LaborParty

44.0

01.7

00/0

00

0

Sajudis

21.2

1.6

00

0/0

00

0

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LithuanianChristianDem

ocrat

Party

12.6

1996

HomelandUnion(Conservatives)

31.3

33.5

0.2

0.2/1.6

0.2

00

LithuanianChristianDem

ocrats

10.4

0.6

1.5

0.5

0.1/0

0.3

0.7

0.1

LithuanianDem

ocratic

LaborParty

10

1.3

2.4

00.5/1.3

00

0

Hungary

1990

HungarianDem

ocratic

Forum

23.9

6.1

2.5

00/4.3

00

0

Alliance

ofFreeDem

ocrats

21.9

8.6

00

0/3.2

00

0

IndependentSmallholder’s

Party

10.7

1994

HungarianSocialistParty

31.3

0.3

21

0.7/1.7

00

0

Alliance

ofFreeDem

ocrats

18.6

15.8

2.6

00/2.6

00

0

HungarianDem

ocratic

Forum

12.0

Slovakia

1992

Movem

entforaDem

ocratic

Slovakia

37.3

4.9

02.4

1.2/1.2

00

0

Party

oftheDem

ocratic

Left

14.7

0.7

1.4

0.7

2.1/1.4

00

0

1994

Movem

entforaDem

ocratic

Slovakia

35

0.3

5.3

00.6/0

10

0

CommonChoice

10.4

0.9

0.9

00/0

1.8

0.9

0

Notes:Thenumbersrepresentthepercentageofsentencesin

party

programsconcerningfavorable

mentionsofFreeEnterprise

(PrEntpr),taxandwage

policies

toinduce

enterprise

(Incntvs),favorable

mentionsofeconomic

planning(Planning),protectionism

(Prtctsm

),acontrolled

economy(Cntrl),

nationalization(N

ational),andMarxism

(Marx).

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above, the Lithuanians did, in fact, commit to market economic reforms in

practice, despite the lack of programmatic support for such policies. Except

Poland, none of the parties from successful transition countries displayed a

commitment to planning, nationalization, central control, or Marxist doctrines.

The Polish Democratic Left Alliance dedicated a considerable amount of its

program to favorable mentions of nationalization. Yet, it put an equal weight on

supply side-oriented policies. In the following election, it dropped the

commitment to nationalization completely and was defeated by the conserva-

tive/liberal solidarity electoral action. On the other hand, leading parties in

unsuccessful countries put less weight on market economic principles and they

frequently followed principles of central planning.

In summary, an analysis of election outcomes and party programs supports the

hypothesis that individuals in more successful transition countries were more

supportive of market economic principles than individuals in less successful

countries at the beginning of the 1990s.

One might object that the election outcomes in less successful countries were

subject to voting irregularities or manipulations and do not reflect the electorate’s

opinion. After all, there is a correlation between the Freedom House’s index of

political rights and civil liberties and the World Bank’s structural reform index

correct (Aslund 2007). This explanation, however, is only partially correct.

Table 6 highlights the two countries with questionable elections, as measured by

the Electoral Misconduct Index (Birch 2007) and one country experiencing civil

war. The evidence remains strong. There is a clear link between the success of

reform parties/failure of communist parties and subsequent market reform.

6. CONCLUDING DISCUSSION: HISTORICAL LEGACIES,

POLITICAL ATTITUDES AND MARKET REFORM

The analysis of survey data, election outcomes, and party manifestos above

suggests that political attitudes caused the differential success at institutional

reform, not only the other way around. Even though high unemployment,

inflation, and falling income during transition do contribute to the low levels of

support for a market transition (Hayo 2004), this cannot be the main explanation.

Low levels of support for markets existed initially. Eurobarometer data have

shown that individuals in more successful countries are less likely to self-identify

as left and they are more likely to affirm a free market economy in 1992 (Table 1

(B)) and that these attitudes do not seem to be caused by economic differences,

such as unemployment rates.

The World Value Survey shows that Individuals in successful transition

countries are less in favor of government intervention, more in favor of private

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ownership, less likely to self-identify as left, less likely to favor a strong leader,

and more in favor of competition in the years between 1994 and 1999 (Table 3).

Moreover, the results hardly change after controlling for output decline running

several robustness checks. It was shown that individuals in more successful

countries voted for reform parties, whereas individuals in less successful countries

voted for non-reformers or socialists during their first free elections (Table 6).

Finally, the case of East Germany provides further evidence against the claim

that popular attitudes are the result of differential reform success. While

privatization reforms were certainly not without problems, the transition process

in East Germany was a credible and fast process and resulted in higher living

standards. However, World Value Survey data show that East Germans were more

in favor of government intervention than individuals in Poland, the Czech

Republic and Slovenia, close to the average of all transition countries. This is the

opposite of what would be expected if reform success caused popular attitudes.

As the role of political attitudes in economic transition and development

becomes evident, the question about the origin of these structures moves to the

foreground. They are likely to be found in the historical legacy of each country or

each group of countries. The importance of alternative empirical methods, such as

network and narrative analysis, becomes apparent (for example, see Chamlee-

Wright and Storr 2011; Frye and Shleifer 1997; Mia Kim 2008; Runst

forthcoming; Storr and Haeffele-Balch 2012).

A brief description of three historical aspects supports the main hypothesis.

Hungary, Poland, the Czech Republic, Slovakia, Slovenia, and Estonia are the

most successful transition countries. Overall, they displayed support for free

market principles and voted accordingly in the early 1990s. Interestingly, the

unease with socialism, as illustrated by social reform movements and uprisings,

can be traced back decades before the fall of the communist bloc.

First, although East Germany almost turned into an atheist society (Smith

2012), religion could only be suppressed but not eradicated in Poland and

Hungary. While about 15% of the Polish clergy at least officially enlisted as

government’s informants, scholars generally consider the Catholic Church to be a

considerable source of resistance against communism (Osa 2003). The solidarity

movement, for example, which emerged in the 1980s, used religious symbols and

phrases (Szporer 2010). Similarly, the Hungarian Lutheran Church supported the

short-lived 1956 revolution (Froese 2001). During the 1980s, the Hungarian state

made concessions to religious groups, including marginalized ones such

Jehovah’s Witnesses, who had to operate in hiding during previous decades. In

1988, the Law on Church Policy was drafted, which gave “legal guarantees for the

autonomous activity of churches” (Froese 2001). Table 7 displays the countries

that are more and less in favor of market economic principles (corresponding to

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Table 1(B)) and the percentage of regular church attendance in the mid-1990s.

The church attendance in countries that are favorable toward market economic

principles is significantly higher than in the countries which are not. Religion

might have offered an alternative belief system which is less hostile toward the

market society; and being itself a belief system is incompatible with socialist

ideology.

Second, market economic and other reforms were undertaken in Czechoslo-

vakia in 1968, which became known as “socialism with a human face.” It is

noteworthy that the push for liberalization was not only initiated in the Czech part

of the country. According to Stolarik (2010), the movement also found

considerable support in Slovakia. Similarly, Hungary’s market economic reforms,

Table 7: Percentage of Church Attendance, Once or More per Week, by Country (WorldValue Survey)

Czech 0.092

Slovakia 0.35

Poland 0.55

Estonia 0.036

Slovenia 0.22

Romania 0.21

Lithuania 0.154

Albania 0.18

Hungary 0.11

Ukraine 0.1

Belarus 0.058

Moldova 0.11

Russia 0.02

Macedonia 0.11

East Germany 0.05

Azerbaijan 0.056

Armenia 0.073

Bulgaria 0.072

Georgia 0.09

Croatia 0.22

Latvia 0.047

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also known as “Goulash Socialism,” created the conditions for an improved

supply of goods. East German tourists, for example, purchased items in Hungary

unavailable in their home country. Slovenia, part of Yugoslavia, decentralized and

undertook market economic reforms in the mid-1960s and the first attempt to

democratically reform the country in 1987 occurred earlier than in all other

socialist countries. Likewise, the Polish opposition movement has been active

since the 1960s. The following decade saw an increased activity of civic, liberal,

nationalist, and other groups which culminated in the solidarity movement of the

1980s (Osa 2003).

Finally, time spent under socialism and historical experience of markets and

democracy qualifies as a third historical difference across countries. Although

Poland, Czechoslovakia, Slovenia, and Hungary fell under Soviet control only

after World War II (WWII), other countries such as the Ukraine, Belarus,

Armenia, and Georgia, with lower support for market economic principles, were

part of the USSR for much longer. In fact, many of the Eastern European countries

never experienced democratic governments or market institutions. The Soviet

Union seized control of poor agricultural monarchies. Romania and Bulgaria fell

under Soviet influence only after World War II, but neither country displayed

strong democratic institutions in the 1920s. Romania’s governing Liberal Party

was, in fact, quite illiberal in their strife for autarky. In the case of Bulgaria, early

free elections reveal a strong popular support for communism (Rothschild 1974).

Similarly, East Germany, which displayed low support for market institutions,

has been under totalitarian control since 1933, and socialist and national-socialist

parties received strong support since the late 1920s. Czechoslovakia, on the other

hand, remained the only viable democracy in 1938, with “uninterrupted

constitutional and civil libertarian continuity” (Rothschild 1974: 100) and was the

most developed country of the region (Rothschild 1974: 20), while all other

Central and Eastern European countries became authoritarian during this period.

Polish democracy in between 1921 and 1935 was weak but socialist parties did not

receive broad popular support. In the free elections of 1922 and 1928, socialist

parties did not gain winning positions and remained below 13% of the votes. The

Polish Right emerged as the winner of both, the election to the constituent

assembly in 1919 and the elections to parliament in 1922. The historian

Rothschild notes, “Basically bourgeois in its appeal, the Right endorsed private

enterprise” (Rothschild 1974: 31). Although Hungary did not become a

democratic country between the world wars (especially after the radical right-

wing successes after 1935), the communist revolution in 1919 did not succeed

either. Hungary’s interwar years also provided some experience with a market

society “Though not as modern as the western provinces of Czechoslovakia, it was

nevertheless quite advanced within East Central Europe” (Rothschild 1974: 166).

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Interwar Slovenia was the most developed part of Yugoslavia. Lazarevic writes

“in about the first 40 years of the twentieth century Slovenes lived within states

with capitalist economies” (Lazarevic 1994: 48).

In summary, the evidence of attitude surveys and electoral outcomes suggests

that more successful transition countries were more in favor of market economic

principles at the beginning of the reform period. Differences in religion,

democratic and market experience, and market economic reforms during

socialism indicate that different historical legacies shaped different political

cultures. After the fall of the communist bloc around 1990, these attitudes

translated into different voting behavior and different reform trajectories.

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NOTES ON CONTRIBUTOR

Petrik Runst has obtained an M.Sc. in Economic from the University of

Nottingham, UK, and a Ph.D. from George Mason University. He is currently

working as an Assistant Professor at the University of Wisconsin, Eau Claire. His

primary field of interest lies at the intersection of Political Economy, Behavioral

Economics and Economic Sociology.

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