Filling the institutional vacuum in Eastern Europe

With Inmaculada Martínez-Zarzoso and Per Magnus Wijkman. In Eastern Partnership Review No. 21, May 2015.

Abstract

An “institutional vacuum” characterized most Eastern Partnership (EaP) countries for some 15 years after the collapse of the Iron Curtain in 1991. As Soviet Republics they had been subject to central planning and state ownership of the means of production for 70 years. After the dissolution of the Soviet Union, the three Baltic States made the transition to functioning democracy and market economy significantly faster than the six EaP countries. The three joined EU and NATO already in 2004 while only two of the six EaP States had by then started to establish democracy: Georgia with the Rose Revolution in November 2003 and Ukraine with the Orange Revolution in December 2004. While late starters, all six EaP countries were, furthermore, slow in developing their institutional frameworks for democracy and market economy. This resulted in significant difficulties in negotiating and implementing deep and comprehensive free trade agreements. We illustrate this late start and slow speed by comparing some relevant key statistics for each of the six EaP States with those of the three Baltic States and Russia.