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The term transition economies apply mainly to post-socialist countries in central and eastern Europe, and also in East Asia, despite its wider use in the economic or sociological literature. The term transition is used to describe the process through which a society or economy introduces the institutional facets associated with advanced capitalist economies, such as the legal system, ownership structures, institutions of financial and labor markets, the party system and the institutions of the independent and democratic state.
Whilst the term transition is often restricted to a small time span of an economic change in which new economic institutions are formed and established, or relates only to an economic view of post socialist societies, or describes the fixed result of the changes as ”the” western type of a market economy or capitalism, the term transformation has been more widely used in the sociological literature, especially in Europe. The latter term covers a social process of fundamental political, economic, technological, and cultural change, both managed and evolutionary, or self organized, in structures and values, including all areas and levels of the society, organizations, and the individual and collective actors.
At the societal level, institution transfers vs. institution building, or re-institutionalization of social processes has been at the center of interest, including conflicts between inherent values of the transferred institutions and the local national value systems. Different transition strategies can be observed, ranging from early shock therapy to an incremental change finally leading to a distinctive mixture between public and private enterprise, and with the strong influence of social networks and groups with particular interests that have underpinned economic activities and institutions.
The emergent, or newly embedded, institutions are therefore the result of a ”recombination” of properties or ”bricolage” based on the culture of the past and transformation experiences with the transferred institutions. At the level of individual and collective actors, the emergence and shape of new social groups of actors, especially entrepreneurs or managers and their influence on the development of new organizational forms, values, and the (re-)construction of new institutions can be stated based on an elite reproduction instead of a radical change within the economic elite.
- Fligstein, N. (1996) The economic sociology of the transition from socialism. American Journal of Sociology 101 (4): 1074-81.
- Nee, V. & Matthew, R. (1996) Market transition and societal transformation in reforming state socialism. Annual Review of Sociology 22: 401-35.