ABSTRACT
There were good reasons to expect foreign investment to dominate post-communist economic restructuring in CEE. Structurally, the neoliberal strategy of the region’s integration into global capitalism, or the ‘American approach’, provided strategic advantages to FDI-reliant strategies. Strategically, reformers in CEE were well integrated into a transnational policy network where openness to FDI was the norm. Western politicians and many advisers have seen FDI as a ‘Marshall Plan for Eastern Europe’. USAID-financed investment bankers embarked on a mission to handle the sale of state-owned enterprises to foreign investors. They had direct access to key decision-makers in Eastern Europe. This often included taking part in cabinet meetings to advise on privatization and having permanent staff at the Ministries of Privatization. However, the ‘transition’ strategy was open to foreign direct investment only in Hungary. Where FDI in general and privatization in particular were concerned the Czech Republic, Slovakia, and Slovenia were all quite hostile to foreign investors. In Poland, actually implemented policies generally preferred domestic actors over foreign investors. In the path-shaping moment of the beginning of the nineties, both internally oriented strategies and externally oriented projects were presented as potential strategies for transition in all the countries under consideration. The externally oriented approach prevailed only in Hungary. Elsewhere, the states promoted domestic accumulation of capital. Why was this the case? What explains the strong drive for promoting internal accumulation in the region? How should make sense of the paradox that often the same groups of reformers promoted both neoliberal transition and internal accumulation? What was the role of external pressures and the limits of the international political economic environment?
