Recovering from communism. (Other Countries).(Brief Article)

Anders Aslund, Building Capitalism: The Transformation of the Former Soviet Bloc, Cambridge University Press, 40 West 20th Street, New York, New York 10011

It has now been over a decade since the Soviet Union collapsed and the former Soviet bloc was freed from Russian tyranny. Anders Aslund, a Carnegie Endowment researcher, surveys the 15 nations that once comprised the Soviet Union and six countries in occupied central and southeastern Europe to determine how they are faring economically and politically.

Aslund divides the former Soviet bloc into three classes. Doing best are the

Baltic states and the nations of Central Europe, including Poland, the Czech Republic, Slovakia, and Hungary. These nations have become market-oriented democracies. In the middle are Russia, Ukraine, Romania, Bulgaria, and most of the nations in the Caucasus, which are semi-democratic, semi-capitalist, and semi-free. At the bottom are unreconstructed communist dictatorships, such as Belarus.

Aslund judges the progress of these states on six criteria: establishment of a market-based economy; keeping inflation below 40 percent per year; privatization of at least 60 percent of the economy; annual economic growth of at least 4 percent for three years; limiting corruption; and establishing democracy.

According to Aslund, there are several factors that determine which former communist nations became successes. Countries that were once free found it easier to regain freedom. Poland and Hungary, to take two examples, had some strong private businesses.

A more crucial factor has been the pace of privatization. Those nations which implemented privatization swiftly ended up creating economic reforms that lasted. The architects of massive privatization were derided at the time for causing economic misery. But their efforts ensured that Poland and the Czech ...