ABSTRACT
The economies of Eastern Europe (i.e. Poland, Hungary, Romania, Bulgaria, Albania, as well as the various successor states to the former Yugoslavia, Czechoslovakia, and GDR) are at present in the throes of transition towards some form of capitalist, market-based ‘mixed economy’. The GDR is unique in that it has been dissolved into the former Federal Republic; while a great deal of adjustment remains to be carried through, its eventual economic and political forms are known. For the rest, neither the time-scale, nor the destination of this transition is clear at the time of writing, and both may vary considerably among the different countries concerned. However, among the common features already apparent are:
the dismantling of the central administrative structures of the command economy;
the transfer of a significant proportion of productive assets from state to other forms of ownership, particularly private;
the adoption of forms of legal regulation and economic policy instrument from within the spectrum of Western European practice;
the reintegration of economic life into the capitalist world economy.
The purpose of this chapter is to outline some of the ways in which transnational corporations (TNCs) can be expected to seek to participate in these changes. This chapter first outlines briefly some features of recent developments in transnational business, including those under the old regimes in Eastern Europe, in order to establish the standpoint from which TNCs view the current business prospects presented in the region. It goes on to examine how the emerging democratic regimes in the region might approach the global integration of their economies in the context of transition strategies, drawing on recent experience in Western and Third World economies. Finally, the chapter addresses the central question of the role of TNCs in the transition. Since current evidence on this can only be anecdotal, the author’s aim is basically to develop a priori arguments which can form a research agenda.