ABSTRACT
Eastern Europe is in transition to capitalism and liberal democracy. The simultaneity of these changes, plus their speed and magnitude, suggest that Eastern Europe is undergoing a process of revolutionary transformation in economics, politics, and thus social structure. Such a transformation is without historical precedent. It also promises to be a long and conflictual process with no guarantees as to the final result.
The approach to revolutionary transformation in post-communist Eastern Europe has been to liberalize politics first and introduce major economic reforms second. This sequencing of political, then economic reform is the opposite from what happened in the development of capitalism and democracy in the West. This reversal of the Western model has introduced a number of tensions between political and economic reform in Eastern Europe. Just as politicians sensitive to the electorate have found it hard to introduce painful economic changes, so the economic costs of the transition have contributed to political instability.
This does not mean, however, that the mixing of political liberalization and economic reform will lead necessarily to the end of the democratic and capitalist experiment in Eastern Europe. Political liberalization enhances in some ways the prospects for economic reform, and the economic reform is central in important ways to democratic consolidation. The mutual benefits of pursuing economic and political reform are most apparent when reforms move rapidly—as the Czech, Polish, and Hungarian experiences illustrate. Where political reform has been slower, however, so has economic reform, and the tensions between the two have been greater. Thus, to the question of sequencing and its impact on the development 50of capitalism and democracy a second consideration must be added: the pace of the reform process. Faster transitions in politics and economics are advisable, if the concern is to maximize the prospects for capitalist liberal democracy.
The sequencing of political and then economic reforms in Eastern Europe, therefore, produces problems, but does not foreclose the possibility that capitalist liberal democracy will develop.
