ARTICLES
Why did the knowledge transition occur in the West and not in the East
Economics and Business ReviewEconomics and Business Review, Vol. 1 (15), No. 1, 2015: 69-88 DOI 10.18559/ebr.2015 Synthetic 'real socialism': a counterfactual analysis of political and economic liberalizations 1 Ilaria Petrarca, 2 Roberto Ricciuti 2 Abstract : We evaluate the effect of the 1989 shock over economic development in four Eastern European countries. We apply a counterfactual approach and define the shock alternatively as the trigger for economic openness, political competition, or both. The main result is an effect of economic freedom larger than the one of democratization. In Poland and Bulgaria we find a positive impact of economic freedom, whilst in Bulgaria there is also a smaller effect of democratization. In Albania, after an initial recession, economic freedom helps recovery. Finally Romania does not show any robust effect.