Beyond accession conditionality and negotiations: Privatization, trade dynamics and the political economy of early post-communist economic transition

Although the impact of the EU on the economic transformation of Central and Eastern Europe (CEE) is undisputed, contemporary causal explanations focus primarily on the impact of accession negotiations and conditionality on CEE transformation and, as such, are limited to the post-1997 period. This poses a challenging empirical puzzle, because, in terms of their pace of transition, the CEECs distanced themselves from the rest of the post-communist countries in the pre-1997 period, i.e. at a time when accession negotiations and conditionality could not have had a causal impact. To fill in this vacuum in our understanding of transition and enhance our ability to explain the various forms of variation that have emerged since the early 1990s, this paper challenges the established view of the way in which the EU impacts domestic transformations in its periphery. Specifically the focus in this paper is shifted from accession negotiations and conditionality to establishing the significance of trade and privatization dynamics in early patterns of differentiation within the broader set of post-communist countries. Emphasis is placed on the impact of EU policies – in particular EU trade policy and the offer of the prospect of EU membership – on these dynamics. * The author is grateful to the Economic and Social Research Council for its generous support that made possible the preparation of this paper.