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Why Read Informality in a Substantivist Manner? On the Embeddedness of the Soviet Second Economy

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Book cover The Informal Economy in Global Perspective

Part of the book series: International Political Economy Series ((IPES))

Abstract

Existing literature tends to see informality in Soviet times as a rational response to deficient socialist institutions. In contrast, informality in post-socialist times is explained by the stickiness of culturally embedded norms. This chapter examines the reasons and implications for these inconsistent interpretations of Soviet and post-Soviet informality using the example of Georgia. It suggests that two influential schools of thought on post-Soviet informality, new institutionalist economics and economic sociology, both fail to overcome this theoretical inconsistency. The chapter then elaborates how a Polanyian substantivist approach can overcome identified theoretical pitfalls and establish continuity in interpreting socialist and post-socialist informality. The importance of recalling this seemingly forgotten substantivist approach is illustrated using the changing institutional context and reproduction of informality in the Georgian case.

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Author information

Authors and Affiliations

  1. Leibniz Institute for Regional Geography, Leipzig, Germany

    Lela Rekhviashvili

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  1. Lela Rekhviashvili
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Correspondence to Lela Rekhviashvili .

Editor information

Editors and Affiliations

  1. Dublin City University, School of Law and Government, Dublin, Ireland

    Abel Polese

  2. University of Sheffield, Management School, Sheffield, United Kingdom

    Colin C. Williams

  3. Alexandru Ioan Cuza University of Iași Faculty of Economics and Business Administration, Iași, Romania

    Ioana A. Horodnic

  4. Institute of Public Finance, Zagreb, Croatia

    Predrag Bejakovic

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Rekhviashvili, L. (2017). Why Read Informality in a Substantivist Manner? On the Embeddedness of the Soviet Second Economy. In: Polese, A., Williams, C., Horodnic, I., Bejakovic, P. (eds) The Informal Economy in Global Perspective. International Political Economy Series. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-40931-3_2

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