Evaluating a Great Experiment in Cultural Change.

There is an interesting Washington Post  blog guest post by UCLA political scientist Daniel Treisman. (Go Bruins!) It examines the 25 year history of political and economic change in the former Soviet block countries after the fall of Communism and the breakup of the Soviet Union. With respect to economic institutions:

A first trend is obvious — divergence. Communism compressed variation. All Soviet Bloc countries had distorted economies, Leninist party dictatorships, and relatively low GDP per capita. Once the brace was taken off, differences quickly reappeared. The income gap between richest and poorest countries grew from $11,000 in 1990 to almost $25,000 in 2010. By then, their political regimes ranged from oriental despotism (Turkmenistan) to consolidated democracy (Poland). In terms of market liberalism, Georgia came eighth on the World Bank’s ease of doing business rankings in 2013, while Uzbekistan was 146th.

And:

A second trend is almost as obvious — convergence. As they diverged from one another, the postcommunist countries were converging towards something else: their neighbors. In income levels, political institutions, and economic freedom, these countries have become more and more like the non-Soviet-Bloc countries nearest to their borders.

The article goes on to suggest that post-Communist democratic processes had resulted in voter support for economic reform, but that some (charismatic) reform leaders were influential in promoting reform while others were not. Leadership counted, although the author notes that economic reform is a group process.

We think that development is easy, but it takes a long time to change economic institutions. Moreover, some cultures facilitate the development of free-market capitalism to a far greater extent than do others.