The Market Transition Debate: Toward a Synthesis?

Szelényi, Iván; Kostello, Eric C.

doi:10.1086/230791

Cited by 187 publications

(126 citation statements)

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“…The persistence and bolstering of informality in postsocialism aligns with those accounts that emphasize path dependency and the ways in which structures inherited from before and during the state-socialist period influence how capitalism is being built, so that transformations occur out of the ruins of the former regime and often result in reproduction rather than social change (Stark 1992;Szelenyi and Kostello 1996;Stark and Bruszt 1998). These institutional accounts see economic transformation from socialism to capitalism as a process that depends on experimentation and evolutionary learning and incorporates existing social and economic networks and forms of practice (Kogut 1996;Stark 1992Stark , 1996Stark and Bruszt 1998;Kogut and Zander 2000;Spicer et al 2000;McDermott 2002).…”

Section: Informality: Social Relations In Economy and Moral Imperativsupporting

confidence: 53%

On postsocialist capitalism

Bandelj

2016

Theor Soc

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Unlike recent tendencies to specify the variety of postsocialist trajectories, this article attempts to characterize the common features of postsocialist capitalism, as it has developed since the 1990s in Eastern Europe. Using conceptual tools of economic sociology, the postsocialist socio-economic organization is analyzed as embedded economy, the institutionalization of capitalism as a moral project, and the pervasiveness of informality from the networks and culture perspectives. Economic development is viewed as dependent, simultaneously, on the system's structural, political and cultural features. For postsocialist capitalism, these features include lack of state autonomy due to close coupling of political and economic roles; the embrace of greed and self-interest as legitimate motives for action; and persistence and bolstering of informality as modus operandi. Stipulations about developmental consequences are provided in the conclusion.Keywords Political and economic transformation . Eastern Europe . Embedded economy . Moralized markets . Informality as modus operandi . Development Scholarship on the socio-economic changes after the communist transitions in Eastern Europe has focused on the intra-regional differences in development, inspired by the literature on the varieties of capitalism (Hall and Soskice 2001) to specify varieties of postsocialist capitalism (King and Szelenyi 2005;Feldmann 2007;Noelke and Vliegenthart 2009;Bohle and Greskovits 2012;Bruszt 2012). In contrast, the present article proposes to bracket the obvious cross-country differences and to challenge the received wisdom, asking if, possibly, we can identify some common institutional features for countries, which underwent relatively rapid simultaneous political and economic transformations from socialism to capitalism. 1 The article does so by applying conceptual Theor Soc DOI 10.1007/s11186-016-9265-z 1 The emphasis is on rapid simultaneous political and economic transformations toward a capitalist democracy, which means that the scope of countries discussed here does not include countries of Central Asia and South Caucasus, nor China, Vietnam, and Laos.

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Section: Informality: Social Relations In Economy and Moral Imperativsupporting

confidence: 53%

On postsocialist capitalism

Bandelj

2016

Theor Soc

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“…Indeed, as Szelenyi and Kostello (1996) pointed out, it is implausible to argue that inequality declines on the one hand, and returns to education increase on the other. If highly educated people earn much more than people with lower education, the overall inequality in a society should increase rather than decline.…”

Section: Discussionmentioning

confidence: 99%

“…While the market is viewed as a generic institutional force that reshapes the social stratification order ( Szelenyi and Kostello 1996), the work unit is a specific institution through which the market exerts its influence on urban social inequality. To explore the social consequences of the market-oriented economic reform, the effect of marketization on the work unit, i.e., how marketization has changed the work unit=s influence on stratification, needs to be first taken into account (Oberschall 1996(Oberschall :1028Guthrie 1997Guthrie :1265.…”

Section: Introduction: the Market Transition Debatementioning

confidence: 99%

Work Units and Income Inequality: The Effect of Market Transition in Urban China

2002

Social Forces

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Nee's market transition theory claims that redistributive power will decline and returns to human capital will increase as state socialist economies are transformed into market economies.However, many other scholars have discovered that either the influence of redistributive power persists or returns to human capital decline. In this paper, I analyze the effect of marketization on individuals= income inequality in urban China as mediated by work units, which are classified into three types: Low Profit State Firms (LPFs), High Profit State Firms (HPFs), and Market Firm (MFs). LPFs are farthest from the market, HPFs are closer to the market and MFs have to be completely exposed to market conditions. Results based on two urban survey data sets show that while the influence of redistributive power declines, returns to human capital do not monotonically increase, as market transition theory predicts. Although returns to human capital are higher in the market sector than in the state sector, the effects of education on earnings are weaker in HPFs than LPFs within the state sector. The inconsistency is attributed to the effects of bonuses that are equally distributed among employees in HPFs.

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“…The state cadre will be better off as marketization progresses if he controls resources that are indispensable in the new arenas of the market. 107 The scarcer the resource, the less egalitarian is the outcome the market transition will produce. Overseas PRC businesses are the most internationalized, market-oriented section of the Chinese economy, yet those succeeding in the formation of private capital are almost exclusively state cadres and their children, because two key resources for entering this section, the permission to work abroad and the investment capital, are monopolized by the state.…”

Section: Discussion a N D I M P L I C A T I O N Smentioning

confidence: 99%

Informal Privatization Through Internationalization: The Rise of Nomenklatura Capitalism in China's Offshore Businesses

Ding

2000

Brit. J. Polit. Sci.

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China's remarkable business expansion abroad since the mid-1980s cannot be explained simply by applying existing theories, which focus on conventional international businesses from capitalist systems. Many puzzling phenomena in Chinese investments abroad become intelligible only when we introduce a key variable–illicit privatization through internationalization. So far only advantageously-placed nomenklatura members and their kin have had access to crossborder ownership, but many of them are accumulating sizeable private wealth at the cost of nationalized property. Contrary to an impression held by many in the West, the Chinese economy under Communist rule experiences spontaneous privatization parallel to what has happened in European postcommunist nations–though with a few Chinese characteristics. An examination of informal privatization in China's multinationals adds a new dimension to our understanding of the shift from state socialism to market capitalism.

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The Market Transition Debate: Toward a Synthesis?

Cited by 187 publications

References 16 publications

On postsocialist capitalism

On postsocialist capitalism

Work Units and Income Inequality: The Effect of Market Transition in Urban China

Informal Privatization Through Internationalization: The Rise of Nomenklatura Capitalism in China's Offshore Businesses

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