Reforms in Eastern Europe: Lessons from the East Asian Capitalist Model

Abstract

Eastern Europe faces a ‘catching up’ problem: to achieve living standards close to the level of Western Europe and North America, and to integrate sufficiently into the core economies to share some of their dynamism. The probability of catching up depends on at least two things: one is competition from other would-be catch-up economies, and the other is the type of capitalism that the national economies of Eastern Europe institute within their borders. Enter East Asia. This region is relevant to Eastern Europe both as a competitor and as a model of a distinctly different type of capitalism from the Anglo-American one. In what follows I concentrate on the latter, but first briefly discuss East Asia as a competitor.