ABSTRACT
The restructuring of former socialist industrial complexes into competitive capitalist firms has proved to be a much more difficult task than many western advisers anticipated. This chapter provides a brief description of the nature of socialist economy, the main mechanisms and modes of coordination and control of economic action and exchange. It introduces the locations, focusing on their strategies of adaptation. One of the pillars of socialist economy was the system of large industrial complexes, which in many localities were the only sources of employment. The key concept and main object of analysis in regulation theory is the regime of accumulation, the historical conditions of accumulation. The embeddedness of regional economies means that enterprises are integrated into socio-spatial networks of cooperation and competition and structures of regulation. The locality is situated in the north-western part of Latvia, traditionally a prosperous area on account of its agricultural production.
