ABSTRACT
In this book we have analysed economic relations among the republics of the former Soviet Union. As we have seen in Chapters 4 and 5, in the past the Soviet Union was a highly integrated economic space. The individual republics were extremely open and cooperated above all with each other. A uniform and centralised planning system fulfilled the task of coordinating economic activity and trade flows, evidently with some success. The political disintegration of the Soviet Union and the transformation of the economic order from a planned to a market economy produced a double threat to existing economic integration: 1 political borders need not, but mostly do, increase transaction costs and hence reduce the scope for mutually beneficial trade; 2 the sudden collapse of the central planning system and the only gradual emergence of a market price mechanism create a chaotic interlude in which cooperation will be reduced to a minimum. (Wagener and van Selm 1993:421)
