Networks and Institutions in Europe's Emerging Markets [Paperback]

Examines the role of social networks in the efficient running of democratic market economies. This title is also available as Open Access.Since the 1980s, reformers have advocated free markets and regarded networks as sources of corruption. Paradoxically, the rapidly developing East Asian Tiger economies and the most successful post-communist countries developed networked economies linking politicians and businesspeople. This book explains when such social networks are a force for development. Available as Open Access on Cambridge Books Online and via Knowledge Unlatched.Since the 1980s, reformers have advocated free markets and regarded networks as sources of corruption. Paradoxically, the rapidly developing East Asian Tiger economies and the most successful post-communist countries developed networked economies linking politicians and businesspeople. This book explains when such social networks are a force for development. Available as Open Access on Cambridge Books Online and via Knowledge Unlatched.Do ties between political parties and businesses harm or benefit the development of market institutions? The post-communist transition offers an unparalleled opportunity to explore when and how networks linking the polity and the economy support the development of functional institutions. A quantitative and qualitative analysis covering eleven post-socialist countries combined with detailed case studies of Bulgaria, Poland and Romania documents how the most successful post-communist countries are those in which dense networks link politicians and businesspeople, as long as politicians are constrained by intense political competition. This combination allowed Poland to emerge with stable institutions while Bulgaria demonstrates that in developing economies intense political competition alone is harmful in the absence of dense personal and ownership networks. Indeed, as Romania illustrates, networks are so critical that their weakness is not mitigated even by low politil£I