Politics and Entrepreneurship in Transition Economies

71 Pages Posted: 9 Apr 2008

See all articles by Simon Johnson

Simon Johnson

Massachusetts Institute of Technology (MIT) - Entrepreneurship Center; National Bureau of Economic Research (NBER)

Daniel Kaufmann

Natural Resource Governance Institute (NRGI); The Brookings Institution

Andrei Shleifer

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Date Written: June 1, 1997

Abstract

The economies of Eastern Europe and the former Soviet Union (FSU) escaped communism with a heavy burden. Despite the collapse of central planning, these economies continued to suffer from heavy political control of economic activity, reflected in massive subsidization of state firms, heavy regulation of entry and operations of private firms, as well as punitive taxation by the government and - separately - by its agents (corruption). Such politicization of the economy had to be reduced significantly for small business formation and growth to begin. In recent years, some countries have succeeded in depoliticizing their economies much better than others. As this paper shows, these are the countries that also had the best growth records.

Suggested Citation

Johnson, Simon and Kaufmann, Daniel and Shleifer, Andrei, Politics and Entrepreneurship in Transition Economies (June 1, 1997). Available at SSRN: https://ssrn.com/abstract=1117620 or http://dx.doi.org/10.2139/ssrn.1117620

Simon Johnson

Massachusetts Institute of Technology (MIT) - Entrepreneurship Center ( email )

United States
617-253-8412 (Phone)
617-258-6855 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Daniel Kaufmann (Contact Author)

Natural Resource Governance Institute (NRGI) ( email )

80 Broad Street
New York, NY 10004
United States

HOME PAGE: http://www.resourcegovernance.org

The Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
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HOME PAGE: http://www.brookings.edu/experts/kaufmannd

Andrei Shleifer

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States
617-495-5046 (Phone)
617-496-1708 (Fax)

HOME PAGE: http://www.economics.harvard.edu/~ashleife/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

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