Chapter 1. Introduction

1.For the exact figures, see Iván T. Berend, From the Soviet Bloc to the European Union: The Economic and Social Transformation of Central and Eastern Esurope since 1973, Cambridge: Cambridge University Press, 2009, p. 69.

2.The original text is translated in Milan Kundera, “The Tragedy of Central Europe (April 26, 1984),” in Gale Stokes, ed., From Stalinism to Pluralism: A Documentary History of Eastern Europe since 1945, New York: Oxford University Press, 1991, pp. 217–23.

3.On the demise of Keynesianism and the breakthrough of neoliberalism, see Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman and the Birth of Neoliberal Politics, Princeton: Princeton University Press, 2012, pp. 215–72.

4.The Canadian historian James Krapfl, who has written an excellent book about the ideals behind the revolution of 1989, calls this its “romantic” representation and reception. See his Revolution with a Human Face: Politics, Culture, and Community in Czechoslovakia, 1989–1992, Ithaca: Cornell University Press, 2013, pp. 14–18.

5.See the reports by the Vienna Institute for International Economic Studies (WIIW), which have been an important resource for this book. On price increases in Czechoslovakia, see WIIW-Mitgliederinformation 1990/6, pp. 22–23. Most of the statistical data on the post-1989 development of the individual countries are taken from the WIIW Handbook of Statistics 2012 (Vienna: WIIW, 2013) and the supplementary CD-ROM (see especially the section “Countries by indicator”). The 2013 edition of the WIIW Handbook of Statistics was published shortly after the original edition of the present book was completed.

6.This is how Hans Rothfels, a founding father of contemporary history in postwar West Germany (who had taught in exile at Brown University and the University of Chicago from 1940 to 1951), put it. He spoke of an “Epoche der Mitlebenden.”

7.On these celebrations, see Matthias Schlegel and Andrea Dernbach, “Die Welt schaut auf Berlin.” Zeit online 9 November 2009.–11/berlin-mauerfall. Accessed May 2014.

8.On urban-rural divergence, see Michael Förster, David Jesuit, and Timothy Smeeding, “Regional Poverty and Income Inequality in Central and Eastern Europe: Evidence from the Luxembourg Income Study.” In Ravi Kanbur and Anthony J. Venables, eds., Spatial Inequality and Development, Oxford: Oxford University Press, 2005, pp. 311–47; Karen Macours and Johan F. M. Swinnen, “Rural-Urban Poverty Differences in Transition Countries.” LICOS Discussion Paper 169, 2007. Accessed May 2014.

9.The internet’s short memory is a problem where all these sources are concerned. Some information accessed at the outset of writing this book, around three or four years ago, has since been deleted or is no longer accessible (e.g., on Eurostat). This is pointed out where applicable.

10.Print media consulted for this book include the Economist, the New York TimesDer SpiegelDie ZeitFrankfurter Allgemeine ZeitungSüddeutsche Zeitung (Germany), PresseStandardWiener Wirtschaftsblatt (Austria), PolitykaGazeta Wyborcza and Rzeczpospolita (Poland), Respekt(Czech Republic), and Hospodárske Noviny (Slovakia). Media sources that are accessible on the internet are not separately listed in the bibliography to avoid taking up too much space.

11.According to long-term CDU parliamentary party leader Klaus-Rüdiger Landowsky in a speech he gave to the Berlin House of Representatives. Cf. Abgeordnetenhaus von Berlin, 13. Wahlperiode, Plenarprotokoll 13/37, 37. Sitzung, 11. Dezember 1997, p. 2386. Accessed May 2014.

12.I initially considered consulting the Human Development Index (HDI) for this book. The HDI has been used by the UN since 1990 and is broadly considered a more meaningful measure of social prosperity than statistics on GDP. However, there are very few regional and local statistics on HDI. For this reason, I have relied predominantly on data on GDP, economic growth, and other indicators.

13.On the Mont Pèlerin Society’s founding principles, see Dieter Plehwe, “Introduction.” In Philip Mirowski and Dieter Plehwe, eds., The Road from Mont Pèlerin: The Making of the Neoliberal Thought Collective, Cambridge, MA: Harvard University Press, 2009, pp. 1–44. Hayek, who worked at the London School of Economics for many years, was regarded as John Maynard Keynes’s principal adversary; their academic rivalry was a definitive factor in promoting neoliberalism. Lippmann stayed in the society for only a short time.

14.On the history of economics as an academic discipline, see Warren Samuels, Jeff Biddle, and John Davis, A Companion to the History of Economic Thought, Oxford: Oxford University Press, 2003.

15.The paper’s actual author was the economist John Williamson, who acted as expert consultant to the institutions involved. For the original text, see John Williamson, ed., Latin American Readjustment: How Much Has Happened, Washington, DC: Institute for International Economics, 1990; on its adaptation to postcommunist Europe, see Paul Dragos Aligica and Anthony John Evans, The Neoliberal Revolution in Eastern Europe: Economic Ideas in the Transition from Communism, Cheltenham: Elgar, 2009.

16.Joseph Stiglitz, Freefall: America, Free Markets, and the Sinking of the World Economy, New York: Penguin, 2010, pp. xiii, 12–15, 248–53.

17.See the review by John Williamson, “A Short History of the Washington Consensus.”–2.pdf. Accessed May 2014. On the tendency among neoliberalism’s proponents to distance themselves from the term, see the first footnote in the above paper; on the (very broad) definition of neoliberalism, see Johanna Bockman, Markets in the Name of Socialism: The Left-Wing Origins of Neoliberalism, Stanford: Stanford University Press, 2011, pp. 4–10. On the dissemination and internal logic of neoliberalism, see e.g., David Harvey, A Brief History of Neoliberalism, Oxford: Oxford University Press, 2005.

18.Plehwe, “Introduction,” p. 2.

19.However, this, too, is disputed. Aligica and Evans contend that the measures applied in the transitional countries were merely in the economic mainstream: see their The Neoliberal Revolution, pp. 157–58. Other economists (mostly those who sympathized with the economic reforms of the nineties) also reject the term “neoliberalism” for classifying economic policies and schools of thought.

20.See, among others, Juan J. Linz and Alfred Stepan, Problems of Democratic Transition and Consolidation: Southern Europe, South America, and Post-Communist Europe, Baltimore: Johns Hopkins University Press, 1996.

21.David Lipton and Jeffrey D. Sachs, “Poland’s Economic Reform.” Foreign Affairs 69.3 (1990), pp. 47–66.

22.Interestingly, these influences have mostly been seen to run from West to East, and not vice versa. On the “fourth dimension,” see Mitchell A. Orenstein, Stephen Bloom, and Nicole Lindstrom, eds., Transnational Actors in Central and East European Transitions, Pittsburgh: University of Pittsburgh Press, 2008; Rachel A. Epstein, In Pursuit of Liberalism: International Institutions in Postcommunist Europe, Baltimore: Johns Hopkins University Press, 2008; Heather Grabbe, The EU’s Transformative Power: Europeanization through Conditionality in Central and Eastern Europe, Basingstoke: Palgrave, 2008; Milada Vachudova, Europe Undivided: Democracy, Leverage and Integration after Communism, Oxford: Oxford University Press, 2005.

23.Samuel P. Huntington, The Third Wave: Democratization in the Late Twentieth Century, Norman: University of Oklahoma Press, 1991; on political system change, see also Philippe Schmitter and Nicolas Guilhot, “From Transition to Consolidation: Extending the Concept of Democratization and the Practice of Democracy.” In Michel Dobry, ed., Democratic and Capitalist Transitions in Eastern Europe, Dordrecht: Kluwer, 2000, pp. 131–46; see also Klaus von Beyme, Systemwechsel in Osteuropa, Frankfurt am Main: Suhrkamp, 1994; Wolfgang Merkel, Systemtransformation. Eine Einführung in die Theorie und Empirie der Transformationsforschung, Wiesbaden: VS Verlag für Sozialwissenschaften, 2010.

24.Padraic Kenney, The Burdens of Freedom: Eastern Europe since 1989, Black Point: Zed Books, 2006.

25.Revolution theories are considered in greater depth below in chapter 3, on the revolutions of 1989–91.

26.Zygmunt Bauman, “A Revolution in the Theory of Revolution.” International Political Science Review 15 (1994), pp. 15–24.

27.See Hannah Arendt, On Revolution, New York: The Viking Press, 1963, pp. 13–52.

28.See Alexis de Tocqueville, The Ancien Régime and the French Revolution, edited by John Elster, translated by Arthur Goldhammer, Cambridge: Cambridge University Press, 2011; Edmund Burke, Reflections on the Revolution in France and on the Proceedings in Certain Societies in London Relative to That Event (1790), London: Penguin Books, 1968.

29.The level of simultaneity in the mid-nineties gave Claus Offe cause to doubt whether the transformation could succeed at all. See his Der Tunnel am Ende des Lichts. Erkundungen der politischen Transformation im Neuen Osten, Frankfurt am Main: Campus, 1994.

30.Maria Dąbrowska, “Tagebücher.” In Karl Dedecius, ed., Bube, Dame, König. Geschichten aus Polen, Frankfurt am Main: Suhrkamp, 1990, pp. 143–54.

31.See Douglas Coupland, Generation X: Tales for an Accelerated Culture, New York: St. Martin’s Press, 1991, p. 7. He writes of “historical overdosing—to live in a period of time when too much seems to happen. Major symptoms include addiction to newspapers, magazines, and TV news broadcasts.”

32.See Lynn Hunt, ed., The New Cultural History, Berkeley: University of California Press, 1989.

33.See, e.g., Philipp Ther, “Das ‘neue Europa’ seit 1989. Überlegungen zu einer Geschichte der Transformationszeit.” Zeithistorische Forschungen 6 (2009), pp. 105–14.

34.See the eponymous book by Peter A. Hall and David Soskice, eds., Varieties of Capitalism: The Institutional Foundation of Comparative Advantage, Oxford: Oxford University Press, 2001. Further literature is recommended in the section of this book titled “A Typology of Reform Outcomes.”

35.See, e.g., the Index of Economic Freedom that has been compiled since 1995 by the Heritage Foundation and the Wall Street Journal, in which private ownership plays a central role. The current index is accessible online at Accessed May 2014. Despite its bias, this index is of interest due to its global comparisons (including Europe), as well as the fact that it proves the hegemony of neoliberalism during the transformation period.

36.On the economic transformation, see, e.g., the overviews by Marie Lavigne, The Economics of Transition: From Socialist Economy to Market Economy, 2nd edition, Basingstoke: Palgrave Macmillan, 2007; Hans-Jürgen Wagener, Wirtschaftsordnung im Wandel. Zur Transformation 1985–2010, Marburg: Metropolis Verlag, 2011. On the Russian Federation’s Land Act, see Grigoriy Joffe, Tatyana Nefedova, and Ilya Zaslavsky, The End of Peasantry? The Disintegration of Rural Russia, Pittsburgh: University of Pittsburgh Press, 2006, pp. 28–29.

37.See Dorothee Bohle and Béla Greskovits, “Neoliberalismus, eingebetteter Neoliberalismus, und Neo-Korporatismus. Sozialistische Hinterlassenschaften, transnationale Integration und die Diversität osteuropäischer Kapitalismen.” In Dieter Segert, ed., Postsozialismus. Hinterlassenschaften des Staatssozialismus und neue Kapitalismen in Europa, Vienna: Braumüller, 2007, pp. 185–205. The authors applied the same typology to their more recent acclaimed study, Capitalist Diversity on Europe’s Periphery, Ithaca: Cornell University Press, 2012.

38.On such criticisms, see Peter Katzenstein, “Small States and Small States Revisited,” Political Economy 1.8 (2003), pp. 9–30. Katzenstein (whom Bohle and Greskovits cite) argues against defining the East Central European countries as neoliberal in view of their high social security spending.

39.See Wolfgang Merkel, “Gegen alle Theorie? Die Konsolidierung der Demokratie in Ostmitteleuropa,” Politische Vierteljahresschrift 48.3 (2007), pp. 413–33; idem, Systemtransformation; Grzegorz Ekiert, “The State after State Socialism: Poland in Comparative Perspective,” In John Hall and John Ikenberry, eds., The Nation-State in Question, Princeton: Princeton University Press, 2003, pp. 291–320. On the role of education for the course of reforms and the persistence of postcommunist parties, see Keith Darden and Anna Grzymała-Busse, “The Great Divide: Literacy, Nationalism, and the Communist Collapse,” World Politics 59.1 (October 2006), pp. 83–115.

40.On transformation in the former Yugoslavia, see Duško Sekulić and Željka Šporer, “Croatia: Managerial Elite Circulation or Reproduction?,” in John Higley and György Lengyel, eds., Elites after State Socialism: Theories and Analysis, Lanham: Rowman & Littlefield, 2000, pp. 143–62; Sabrina P. Ramet and Davorka Matić, eds., Democratic Transition in Croatia: Value Transformation, Education & Media, College Station: Texas A&M University Press, 2007.

41.Perhaps the best book on Yugoslavia’s collapse is Holm Sundhaussen, Jugoslawien und seine Nachfolgestaaten 1943–2011, Vienna: Böhlau, 2012.

42.See Peter Siani-Davies, The Romanian Revolution of December 1989, Ithaca: Cornell University Press, 2005.

43.See Lilia Shevtsova, RussiaLost in TransitionThe Yeltsin and Putin Legacies, Washington, DC: Carnegie Endowment, 2007. In this book, well-known Russian and Ukrainian names, e.g. Vladimir Putin, are transliterated according to English conventions; lesser-known names are rendered according to the scholarly system of transliteration.

44.On the Chinese path of transformation, see, e.g., Kellee S. Tsai, Capitalism without Democracy: The Private Sector in Contemporary China, Ithaca: Cornell University Press, 2007.

45.On this concept (in German: “nachholende Modernisierung”) and the development of the Eastern Bloc in the postwar era, see Dieter Segert, Transformation in Osteuropa im 20. Jahrhundert, Vienna: Facultas, 2013, pp. 63–65, 71.

46.The chief proponent of such regional studies is the Polish social scientist Grzegorz Gorzelak. See his book The Regional Dimension of Transformation in Central Europe: Regions and Cities, 2nd edition, London: Routledge, 2002 [1996], and Grzegorz Gorzelak, John Bachtler, and Maciej Smętkowski, eds., Regional Development in Central and Eastern Europe: Development Processes and Policy Challenges, London: Routledge, 2010; see also Heinz Fassmann, “Die Rückkehr der Regionen—regionale Konsequenzen der Transformation in Ostmitteleuropa. Eine Einführung,” in idem, ed., Die Rückkehr der Regionen. Beiträge zur regionalen Transformation Ostmitteleuropas, Vienna: Verlag der ÖAW, 1997, pp. 13–34. On the causes of this divergence, see Petr Pavlínek, “Regional Development Implications of Foreign Direct Investment in Central Europe,” European Urban and Regional Studies 11.1 (2004), pp. 47–70.

47.For an introduction, see Grigoriy Kostinskiy, “Post-Socialist Cities in Flux,” in Ronan Paddison, ed., Handbook of Urban Studies, London: Sage, 2001, pp. 450–85.

48.See, among others (in order of publication date), Katherine Verdery, What Was Socialism and What Comes Next?, Princeton: Princeton University Press, 1996; Michał Buchowski, Rethinking Transformation: An Anthropological Perspective on Postsocialism, Poznań: Humaniora, 2001; Michael Burawoy and Katherine Verdery, eds., Uncertain Transition: Ethnographies of Change in the Postsocialist World, Lanham, Rowman & Littlefield, 1999; Elizabeth C. Dunn, Privatizing Poland: Baby Food, Big Business, and the Remaking of Labor, Ithaca: Cornell University Press, 2004; Chris Hann, Postsocialism: Ideals, Ideologies and Practices in Eurasia, London: Routledge, 2002; Tatjana Thelen, Andrew Cartwright, and Thomas Sikor, Local State and Social Security in Rural Communities: A New Research Agenda and the Example of Postsocialist Europe, Halle: Max-Planck-Institut für ethnologische Forschung, 2008; Aleksandra Galasińska, Michał Krzyżanowski, Sue Wright, and Helen Kelly-Holmes, eds., Discourse and Transformation in Central and Eastern Europe: Language and Globalization, Basingstoke: Palgrave Macmillan, 2009.

49.Some examples of such syntheses of twentieth-century history are Eric Hobsbawm, The Age of Extremes: The Short Twentieth Century, 1914–1991, London: Michael Joseph, 1994; Norman Davies, Europe: A History, Oxford: Oxford University Press, 1996; Mark Mazower, Dark Continent: Europe’s Twentieth Century, New York: Vintage, 2000; Tony Judt, Postwar: A History of Europe since 1945, New York: Penguin, 2005; Hartmut Kaelble, Sozialgeschichte Europas. 1945 bis zur Gegenwart, Munich: Beck, 2007; Konrad Jarausch, Out of Ashes: A New History of Europe in the Twentieth Century, Princeton, Princeton University Press, 2015.

50.For another German-language book that begins its inquiry in the 1980s, see Andreas Wirsching, Der Preis der Freiheit. Geschichte Europas in unserer Zeit, Munich: Beck, 2012.

Chapter 2. Where the East Meets the West:

Crisis and Reform Debates in the 1980s

1.Klaus Segbers, Der sowjetische Systemwandel, Frankfurt am Main: Suhrkamp, 1989; Anders Åslund, Gorbachev’s Struggle for Economic ReformThe Soviet Reform Process, 1985–1988, Ithaca: Cornell University Press, 1989.

2.Cf. the original slogan “Überholen, ohne einzuholen,” cited in Raymond G. Stokes, “Von Trabbis und Acelyten—die Technikentwicklung,” in Andre Steiner, ed., Überholen ohne Einzuholen. Die DDR-Wirtschaft als Fußnote der deutschen Geschichte?, Berlin: C. Links, 2006, pp. 105–26, here 114.

3.For a comparison of welfare states in East and West, see Christoph Boyer, “Zwischen Pfadabhängigkeit und Zäsur. Ost- und westeuropäische Sozialstaaten seit den siebziger Jahren des 20. Jahrhunderts,” In Konrad Jarausch, ed., Das Ende der Zuversicht? Die siebziger Jahre als Geschichte, Göttingen: Vandenhoeck & Ruprecht, 2008, pp. 103–19.

4.Paul Villaume and Odd Arne Westad, eds., Perforating the Iron Curtain: European Détente, Transatlantic Relations, and the Cold War, 1965–1985, Copenhagen: Museum Tusculanum Press, 2010.

5.On trade relations and other contacts within the Eastern Bloc, see Włodzimierz Borodziej, Jerzy Kochanowski, and Joachim von Puttkamer, eds., “Schleichwege.” Inoffizielle Begegnungen sozialistischer Staatsbürger zwischen 1956 und 1989, Vienna: Böhlau, 2010.

6.Cf. Christian Domnitz, Hinwendung nach Europa. Neuorientierung und Öffentlichkeitswandel im Staatssozialismus 1975–1989, Bochum: Winkler, 2015.

7.See also the conference titled “Loopholes in the Iron Curtain: Economic Contacts between Eastern and Western Europe since the 1970s,” held on 18–19 April 2013 in Vienna, documented at the H-Soz-u-Kult website: Accessed May 2014.

8.See John Lewis Gaddis, We Now Know: Rethinking Cold War History, Oxford: Oxford University Press, 1997. For a more comprehensive account, though also focused on the major conflicts, see Melvin Leffler and Odd Arne Westad, eds., The Cambridge History of the Cold War, 3 vols., Cambridge: Cambridge University Press, 2010.

9.See Frédéric Bozo, Marie-Pierre Rey, Piers Ludlow, and Leopoldo Nuti, Europe and the End of the Cold War: A Reappraisal, London: Routledge, 2008; on the Cold War in Europe, see also Bernd Stöver, Der Kalte Krieg. Geschichte eines radikalen Zeitalters, 1947–1991, Munich: Beck, 2011, pp. 386–409.

10.All ten episodes of the series can be viewed online: Accessed May 2014. Friedman also published a book on the subject, written with his wife, which was a similar popular success. See Milton Friedman and Rose Friedman, Free to Choose: A Personal Statement, New York: Harcourt, 1980.

11.Quoted from Konrad H. Jarausch, “Zwischen ‘Reformstau’ und ‘Sozialabbau.’” Anmerkungen zur Globalisierungsdebatte in Deutschland 1973–2003,” in idem, ed., Das Ende der Zuversicht? Die siebziger Jahre als Geschichte, Göttingen: Vandenhoeck & Ruprecht, 2008, pp. 330–52, here 335. The original citation was: “Weg von mehr Staat, hin zu mehr Markt; weg von kollektiven Lasten, hin zur persönlichen Leistung; weg von verkrusteten Strukturen, hin zu mehr Beweglichkeit, Eigeninitiative und verstärkter Wettbewerbsfähigkeit.”

12.See Geoff Eley, Forging Democracy: The History of the Left in Europe, 1850–2000, Oxford: Oxford University Press, 2002.

13.Harold James, Europe Reborn: A History 1914–2000, London: Longman, 2003; on the “conservative revolution” and Thatcherism, see Dominik Geppert, Thatchers konservative Revolution. Der Richtungswandel der britischen Tories 1975–1979, Munich: Oldenbourg, 2002.

14.Cf. Jarausch, Das Ende der Zuversicht; also Anselm Doering-Manteuffel and Raphael Lutz, Nach dem Boom. Perspektiven auf die Zeitgeschichte seit 1970, Göttingen: Vandenhoeck & Ruprecht, 2008.

15.On the black market in Poland under state socialism, see Jerzy Kochanowski, Jenseits der Planwirtschaft. Der Schwarzmarkt in Polen 1944–1989, Göttingen: Wallstein, 2013; on Poland’s history during this difficult time, see Włodzimierz Borodziej, Geschichte Polens im 20. Jahrhundert, Munich: Beck, 2010.

16.Cf. Marek Borkowski, “Sprzedać, oddać, wydzierżawić,” Polityka 32.49 (3 Dezember 1988), pp. 1, 4. Borkowski was a head of department in the domestic market ministry at the time. He rose to become deputy minister in the ministry under the first two Solidarność-led administrations, where he was responsible for the privatization of trade and tourism enterprises. In 1993 he became finance minister of the first postcommunist government. His career is a prime example of the continuities in Poland’s reform and privatization policy. On the supporters of radical reforms, see also Borodziej, Geschichte Polens im 20. Jahrhundert, pp. 376–80. Cf. the personal account by Karol Modzelewski, Zajeździmy kobyłę historii. Wyznania poobijanego jeźdźca, Warsaw: Iskry, 2013, p. 362.

17.See Roman Szporluk, Russia, Ukraine and the Breakup of the Soviet Union, Stanford: Hoover Institution Press, 2000, pp. 395–429; Mark R. Beissinger, “Nationalism and the Collapse of Soviet Communism,” Contemporary European History 18.3 (2009), pp. 331–47.

18.On responses to neoliberalism among economists and economic policymakers in Eastern Europe (especially Yugoslavia), see Bockman, Markets in the Name of Socialism, pp. 76–132.

19.Robert Heilbroner, “The Triumph of Capitalism,” The New Yorker 23 January 1989, p. 98.

20.The episode dealing with the breakdown of state socialism and the postcommunist transformation can be viewed online: Accessed May 2014. Cf. the Reagan citation starting at 40 seconds.

Chapter 3. The Revolutions of 1989–91

1.On the use of the term “revolution” in the GDR in fall 1989, see Bernd Lindner, “Begriffsgeschichte der Friedlichen Revolution. Eine Spurensuche,” Aus Politik und Zeitgeschichte 24–26/2014, pp. 33–39. On the same in Czechoslovakia, see Krapfl, Revolution with a Human Face, p. 8.

2.See Charles Tilly, European Revolutions 1492–1992, Oxford: Oxford University Press, 1992; Theda Skocpol, Social Revolutions in the Modern World, Cambridge: Cambridge University Press, 1994; Arendt, On Revolution. More recent attempts at defining revolutions have been provided by David Parker, ed., Revolutions and the Revolutionary Tradition in the West 1560–1991, London: Routledge, 2000; George Lawson, Negotiated Revolutions: The Czech Republic, South Africa and Chile: London: Ashgate, 2004.

3.For a good chronological overview, see Victor Sebestyen, Revolution 1989: The Fall of the Soviet Empire, New York: Random House, 2009. On the course of the revolutions and the controversial responses they elicited, see also the special edition edited by Manfred Sapper and Volker Weichsel of the magazine OsteuropaFreiheit im Blick. 1989 und der Aufbruch in Europa (= Osteuropa 2/3 [2009]).

4.Putin’s speech is documented in the Kremlin archive: Accessed May 2014.

5.Cf. Milada Vachudova and Timothy Snyder, “Are Transitions Transitory? Two Models of Political Change in East Central Europe since 1989,” East European Politics & Society 11 (1997), pp. 1–35, here 3. (“Ethnic geography” is identified here as one of three main factors contributing to the success or failure of a country’s transformation.)

6.See Jan Zielonka, Europe as Empire: The Nature of the Enlarged European Union, Oxford: Oxford University Press, 2006.

7.On Czechoslovakia, where the word “reform” was avoided as a rejection of the reform communists of 1968, see Michal Pullmann, Konec experimentu. Představba a pad komunismu v Československu, Prague: Scriptorium, 2011, pp. 63–70.

8.Timothy Garton Ash, We the People: The Revolution of ’89 Witnessed in Warsaw, Budapest, Berlin & Prague, Cambridge: Granta Books, 1990.

9.György Dalos, Der Vorhang geht auf. Das Ende der Diktaturen in Osteuropa, Munich: Beck, 2009.

10.Padraic Kenney, A Carnival of Revolution: Central Europe 1989, Princeton: Princeton University Press, 2002.

11.On this debate, see Timothy Garton Ash, “1989!” New York Review of Books 56.17 (5 November 2009), p. 6.

12.Stephen Kotkin, with the cooperation of Jan T. Gross, Uncivil Society: 1989 and the Implosion of the Communist Establishment, New York: Random House, 2009.

13.On the local proliferation of civil rights committees, see Krapfl, Revolution with a Human Face, pp. 115, 201–16.

14.See the divergent interpretations in Tom Gallagher, Theft of a Nation: Romania since Communism, London: Hurst & Company, 2005, pp. 70–109, who supports the putsch thesis, and Siani-Davies, The Romanian Revolution of December 1989, pp. 267–86.

15.See Valère P. Gagnon, The Myth of Ethnic War: Serbia and Croatia in the 1990s, Ithaca: Cornell University Press, 2004.

16.See, for example, Anders Åslund, Gorbachev’s Struggle for Economic Reform, and idem, How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia, and Central Asia, Cambridge: Cambridge University Press, 2007.

17.See Berend, From the Soviet Bloc, pp. 20–38.

18.The Vienna Institute for International Economic Studies (WIIW) recognized the severity of the problem at the time. See WIIW-Mitgliederinformation 1990/6, pp. 24–25. On Gorbachev’s fatal economic and budget policy, see also Gerald M. Easter, Capital, Coercion, and Postcommunist States, Ithaca: Cornell University Press, 2012, pp. 23–50.

19.See Boyer, “Zwischen Pfadabhängigkeit und Zäsur,” pp. 103–19.

20.See the comprehensive record by Mark Kramer, “Ukraine and the Czechoslovak Crisis of 1968 Part 2: New Evidence from the Ukrainian Archives.” Cold War International History Project Bulletin 14/15 (2004), pp. 273–368.

21.See Mary Elise Sarotte, The Collapse: The Accidental Opening of the Berlin Wall, New York: Basic Books, 2014, pp. 63, 73.

22.See Ronald G. Suny and Terry Martin, eds., A State of Nations: Empire and Nation Making in the Age of Lenin and Stalin, Oxford: Oxford University Press, 2001.

23.For the exact statistics, see Graham Smith, “The Resurgence of Nationalism,” in idem, ed., The Baltic States: The National Self-Determination of Estonia, Latvia and Lithuania, New York: St. Martin’s, 1994, pp. 121–43.

24.See Yaroslav Hrytsak, “On the Relevance and Irrelevance of Nationalism in Contemporary Ukraine,” in Georgiy Kasianov and Philipp Ther, eds., A Laboratory of Transnational History: Ukraine and Recent Ukrainian Historiography, Budapest: CEU Press, 2009, pp. 225–48.

25.See Mark Kramer, “The Collapse of East European Communism and the Repercussions within the Soviet Union, Part 1,” Journal of Cold War Studies 5/4 (fall 2003), pp. 178–256. On the internal Soviet dynamics, see Serhii Plokhy, The Last Empire: The Final Days of the Soviet Union, New York: Basic Books, 2014.

26.Sundhaussen, Jugoslawien und seine Nachfolgestaaten.

27.Sarotte, The Collapse, pp. 177–79.

28.On the concept of revolution and its internal differentiations, see Tilly, European Revolutions, p. 8.

29.One good biography has been published, though without footnotes to facilitate further research. See György Dalos, GorbatschowMensch und Macht. Eine Biografie, Munich: Beck, 2010.

30.See Michael Zantovsky, Havel: A Life, New York: Grove Press, 2014.

31.See Lars Fredrik Stöcker, Bridging the Baltic Sea: Networks of Resistance and Opposition during the Cold War Era, Ph.D. thesis, EUI Florence, Department of History and Civilization, 2013.

32.On 1989 in a global perspective, see: Lawson, Negotiated Revolutions; George Lawson, Chris Armbruster, and Michael Cox, eds., The Global 1989Continuity and Change in World Politics, Cambridge: Cambridge University Press, 2010; also Jacques Rupnik, ed., 1989 as a Political World Event: Democracy, Europe and the New International System in the Age of Globalization, London: Routledge, 2014.

33.On support for the Chinese party leadership in the GDR, see Sarotte, The Collapse, p. 43. According to Timothy Garton Ash, however, the massacre on Tiananmen Square had an overall negative impact; see “1989!,” p. 6.

34.One of the first books to describe this tendency, in the 1950s, was Robert R. Palmer, The Age of the Democratic Revolution: A Political History of Europe and America, 1760–1800, Princeton: Princeton University Press, 1959; see also Tilly, European Revolutions; Theda Skocpol, Social Revolutions in the Modern World, Cambridge: Cambridge University Press, 1994.

35.See Sarotte, The Collapse, pp. 30–32. Jens Gieseke, “Der entkräftete Tschekismus. Das MfS und seine ausgebliebene Niederschlagung der Konterrevolution 1989/90,” in Martin Sabrow, ed., 1989 und die Rolle der Gewalt, Göttingen: Wallstein, 2012, pp. 56–81, here 60–61.

36.Russian writer Y. Yevtushenko has incorporated an account of this incident in a compelling novel, Don’t Die before You Are Dead, New York: Random House, 1995.

37.See, for example, Heinz-Gerhard Haupt, Gewalt und Politik im Europa des 19. und 20. Jahrhunderts, Göttingen: Wallstein, 2012.

38.See Miroslav Vanĕk, “Der 17. November und seine Ursachen in den Erzählungen kommunistischer Funktionäre,” in Niklas Perzi, Beata Blehová, and Peter Bachmeier, eds., Die samtene Revolution. Vorgeschichte—Verlauf—Akteure, Frankfurt am Main: Peter Lang, 2009, pp. 147–64.

39.See Sarotte, The Collapse, p. 54.

40.On this concept of revolution, see Tilly, European Revolutions, p. 8. In view of the “revolutionary outcomes,” Tilly holds that the events of 1989 amounted to a chain of revolutions; see idem, p. 235; on the definition of revolutions, see also Skocpol, Social Revolutions in the Modern World, p. 133.

41.See Jadwiga Staniszkis, Pologne. La révolution autolimitée, Paris: Presses universitaires de France, 1982. (An English translation entitled Poland’s Self-Limiting Revolution was published in 1984 by Princeton University Press.) After 1989 Staniszkis frequently criticized the endurance of ties with communism in Poland; see her critical view of postcommunism in idem, Postkommunizm. Próba opisu, Gdańsk: Wydawnictwo słowo/obraz terytoria, 2001. For a broader consideration of the concept of the “negotiated revolution,” see also Lawson, Negotiated Revolutions.

42.Arendt, On Revolution, pp. 13–52.

43.On Hungarian criticism and denial of the revolution, see the eye-opening texts by Joachim von Puttkamer, Ellen Bos, and András Bozoki in a special edition devoted to Orbán of the magazine Osteuropa (Osteuropa 61/12 [December 2011]).

44.See Jürgen Habermas, “What Does Socialism Mean Today? The Rectifying Revolution and the Need for New Thinking on the Left,” New Left Review 1.183 (September–October 1990), pp. 3–21; Jacques Rupnik, “1968: The Year of Two Springs,” Eurozine 16 May 2008.–05–16-rupnik-en.html. Accessed May 2014. Rupnik holds that 1989 was a “counter-’68.”

45.On the Prague protesters’ original values and the endurance of positive attitudes to socialism, see Pullmann, Konec experimentu, pp. 189–90.

Chapter 4. Getting on the Neoliberal Bandwagon

1.See Bauman, “A Revolution in the Theory of Revolution,” pp. 15–24.

2.An earlier critique of the Washington Consensus was published in Moisés Naím, “Fads and Fashion in Economic Reforms: Washington Consensus or Washington Confusion?,” 26 October 1999. Accessed May 2014. Interestingly, this critique was published by the World Bank, indicating that it was beginning to distance itself from its own policies of 1989.

3.See N. N., “Unwort des Jahres ‘alternativlos.’” Die Zeit 18 January 2011.–01/unwort-2010-alternativlos. Accessed May 2014. Die Zeit is Germany’s most respected weekly newspaper.

4.Strictly speaking, this was preceded by the 1992 election victory of Algirdas Brazauskas in Lithuania. However, this first instance of a postcommunist politician winning out over former opposition parties garnered less interest in the West.

5.Later, Balcerowicz and his circle also used the terms “shock” and “shock therapy,” making a political mistake for which they paid at the 1993 elections. See Leszek Balcerowicz, 800 Dni Szok Kontrolowany. Zapisał: Jerzy Baczyński, Warsaw: BGW, 1992.

6.On the reformers’ original assumptions, see the comments by Leszek Balcerowicz in an interview with the weekly newspaper Polityka in December 1989, when he still assumed that there would be only a slight drop in demand and high unemployment could be avoided. See “Albo szybko, albo wcałe,” Polityka 33/48 (2 December 1989), pp. 1, 5 (here especially column 2 on p. 1).

7.See the statistics in WIIW Handbook 2012, Countries by indicator, Table II/1.7. At the time, the slump provoked serious doubts among international observers whether the reforms in Poland would succeed at all. See, e.g., the IMF Staff Report from July 8, 1992, which is accessible in the World Bank Archive, World Bank File 30029780 (Poland – Privatization – Volume 2): n.p. These doubts do not confirm today’s idolization of the shock therapy.

8.Modzeleweski, Zajeźdźimy, p. 393.

9.In Poland, Grzegorz Kołodko championed this idea. He was finance minister under several SLD-led governments and an internationally renowned economic expert. He also published in English, testifying to his international reputation. See, e.g., his From Shock to Therapy: The Political Economy of the Postsocialist Transformation, Oxford: Oxford University Press, 2000.

10.See Adam Michnik, “Ten straszny Balcerowicz,” Gazeta Wyborcza 28 November 1992, p. 10. In this article, Michnik writes: “One might ask whether in the current situation there is any possibility of gaining broad acceptance at all—but one cannot simply assume that the majority of the population would have understood the sense and consequences of Balcerowicz’s policies in the first place” (my translation). Balcerowicz expressed the same view, saying that it was necessary to present the reforms as a “fait accompli” to carry them out. See Leszek Balcerowicz, Socialism, Capitalism, Transformation, Budapest: CEU Press, 1995, p. 307. On the paradoxes of liberalism in Poland, see Jerzy Szacki, Liberalism after Communism, Budapest: CEU Press, 1995.

11.See the chapter “How Liberals Lost Labour” in David Ost, The Defeat of Solidarity: Anger and Politics in Postcommunist Europe, Ithaca: Cornell University Press, 2005, pp. 94–120.

12.On the validity of this term, see Anne Goedicke, “A ‘Ready-Made State’: The Mode of Institutional Transition in East Germany after 1989,” In Martin Diewald, Anne Goedicke, and Karl Ulrich Mayer, eds., After the Fall of the Wall: Life Courses in the Transformation of East Germany, Stanford: Stanford University Press, 2006, p. 63.

13.See H. Jörg Thieme, “Notenbank und Währung in der DDR,” in Deutsche Bundesbank, ed., Fünfzig Jahre Deutsche Mark. Notenbank und Währung in Deutschland seit 1948, Munich: Beck, 1998, pp. 609–54, here 628, 648. On the GDR’s economic problems, see Hartmut Berghoff and Uta Andrea Balbier, The East German Economy, 1945–2010: Falling Behind or Catching Up?, Cambridge: Cambridge University Press, 2013.

14.The economist Hans-Werner Sinn calculated on the basis of purchasing power parity. Indeed, it was possible to buy almost as much for one East German mark as for one West German mark. But wages and salaries were distinctly lower in the GDR than in West Germany. See Gerlinde Sinn and Hans-Werner Sinn, Kaltstart. Volkswirtschaftliche Aspekte der deutschen Vereinigung, 2nd edition, Tübingen: Mohr, 1992, pp. 54–64.

15.Representatives of the GDR state bank warned against this revaluation and argued for an exchange rate of 7:1 to keep the East German economy competitive. See an interview of 28 February 2015 with the vice president of the GDR state bank, Edgar Most, broadcast by the radio station Deutschlandfunk: Accessed March 2015.

16.See Andreas Rödder, Deutschland einig Vaterland. Die Geschichte der Wiedervereinigung, Munich: Beck, 2009, p. 193.

17.See Goedicke: “A ‘Ready-Made State,’” pp. 44–64, here 48.

18.Karl-Heinz Paqué, “Transformationspolitik in Ostdeutschland. Ein Teilerfolg,” Aus Politik und Zeitgeschichte 28 (2009), pp. 22–27, here 23.

19.See Paqué, Die Bilanz. Eine wirtschaftliche Analyse der Deutschen Einheit, Munich: Hanser, 2009, p. 73. Estimates of East German productivity in comparison to West Germany varied between 17 and 50 percent (ibid., pp. 20–21).

20.See Sinn and Sinn, Kaltstart, vii.

21.On migration from the former GDR, see Bernd Martens, “Der Zug nach Westen—Anhaltende Abwanderung” (30 March 2010). Accessed May 2014.

22.See Paqué, Die Bilanz, p. 20.

23.Adam Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America, New York: Cambridge University Press, 1991, p. 174, cit. from Merkel, Systemtransformation, p. 339. The author has started an international research project on the transformation of shipyards in 2016. More information can be found on the webpage of the Institute of East European History:

24.See Preston Keat, “Fallen Heroes: Explaining the Failure of the Gdansk Shipyard, and the Successful Early Reform Strategies in Szczecin and Gdynia,” Communist and Postcommunist Studies 36 (2003), pp. 209–30. This policy was introduced by the otherwise neoliberal-oriented government under Barbara Suchocka.

25.On unemployment figures in Eastern Europe, see János Kornai, “The Great Transformation of Central Eastern Europe: Success and Disappointment,” Economics of Transition 14.2 (2006), pp. 207–44, here 231. In 1996 the unemployment rate in the Czech Republic was 3.5 percent. It rose over the next three years as a result of the transformation crisis to 9.4 percent.

26.On Russia, see Neill Robinson, “The Context of Russia’s Political Economy,” in idem, ed., The Political Economy of Russia, Lanham: Rowman & Littlefield, 2013, pp. 15–50, here 34.

27.An analogous explanation can be found in the above-mentioned essay by Neill Robinson, who blames the Soviet tradition of “particularistic exchange,” i.e., personalized networks for Russia’s economic plight in the 1990s rather than fiscal, profit-oriented ties between economic actors (a problem of cultural traditions and attitudes). See Robinson, “The Context,” p. 22.

28.See Anders Åslund, Building Capitalism: The Transformation of the Former Soviet Bloc, Cambridge: Cambridge University Press, 2002, p. 118.

29.See the population statistics in Peter Fässler, Thomas Held, and Dirk Sawitzki, Lemberg—Lwow—Lviv. Eine Stadt im Schnittpunkt europäischer Kulturen, Cologne: Wissenschaft und Politik, 1995, p. 183. The population data for the year 2001 are accessible online on the website of the Ukrainian state statistical office: Accessed May 2014.

30.See again the calculations in Åslund, Building Capitalism, p. 118.

31.On Russia, see Robinson, “The Context,” pp. 29–31.

32.On the rise and recent slackening of neoliberalism, see Hilary Appel and Mitchell A. Orenstein, “Why Did Neoliberalism Triumph and Endure in the Post-Communist World?” Comparative Politics, 48.3 (April 2016).

33.See Dieter Plehwe, “Introduction,” pp. 1–44, here 2.

34.On the academic debate concerning this issue, see the publications by two members of the Russian Academy of Sciences: Boris Kuzyk and Yuriy Yakovets, Rossiya 2050. Strategiya innovatsionnogo proryva, Moscow: Ekonomika, 2004.

35.Balcerowicz, Socialism, Capitalism, pp. 303–7.

36.See Shmuel N. Eisenstadt, ed., Multiple Modernities, New Brunswick: Transaction, 2002.

37.See Lawrence King, “Postcommunist Divergence: A Comparative Analysis of the Transition to Capitalism in Poland and Russia,” Studies in Comparative International Development 37.3 (2002), pp. 3–34. Another influential distinction has been made between “liberal market economies,” where intercompany relations and relations between employees and management are barely regulated and the state is limited to its elementary functions, and the more regulated “coordinated market economies,” where consensus-forming, trade unions, and corporative structures play a greater role and the state provides more social security. See Hall and Soskice, Varieties of Capitalism. For an overview of the longer-term antecedents of capitalism, see Jürgen Kocka, Capitalism: A Short History, Princeton: Princeton University Press, 2016.

38.See Lawrence P. King and Iván Szelényi, “Post-Communist Economic Systems,” In Neil J. Smelser and Richard Swedberg, eds., Handbook of Economic Sociology, 2nd edition, Princeton: Princeton University Press, 2005, pp. 206–29.

39.In Poland and Czechoslovakia alone they totalled three million by 1993, and 660,000 in Hungary. See the figures in Berend, From the Soviet Bloc, p. 61.

40.On FDI, see Berend, From the Soviet Bloc, pp. 108–33.

41.Grzegorz Ekiert attributes key importance to these reforms for the success of transformation in Poland. See his “The State after State Socialism,” pp. 291–320.

42.See Iván T. Berend and György Ranki, The European Periphery and Industrialization 1780–1914, Cambridge: Cambridge University Press, 1982.

43.See Jeffrey Sachs, The End of Poverty: Economic Possibilities for Our Time, New York: Penguin, 2005, pp. 109–30.

44.See WIIW Handbook 2012, Countries by indicator, Tables II/1.8 and II/1.1.

45.See Bohle and Greskovits, Capitalist Diversity, pp. 223–57; also chapter 7 in the present book.

Chapter 5. Second-Wave Neoliberalism

1.On these two countries, see the Eurostat data: “Gross Domestic Product at Market Prices,” On Microsoft, see the overview of the company’s worldwide turnover in the years 2002 to 2013 on the Statista website: Both accessed May 2014.

2.See the website of the Warsaw Stock Exchange: Accessed May 2014. Of course, compared to Wall Street this is a minimal sum of trading.

3.On the introduction of the flat tax system in these and all other Eastern European countries (Romania, Macedonia, and Bulgaria followed suit in 2005–8), see Aligica and Evans, The Neoliberal Revolution in Eastern Europe, pp. 185–87.

4.On the further development of private and corporate income tax rates, see Alvin Rabushka, “Amendments to Serbia’s Personal Income Tax.” (16 August 2010). Accessed May 2014.

5.On the proportion of welfare spending in the Baltic states’ and Slovakia’s GDPs, see Segert, Transformationen in Osteuropa, p. 233.

6.For some examples of the “tiger” discourse, see Matthew Reynolds, “Once a Backwater, Slovakia Surges,” New York Times 28 December 2004. Accessed May 2014. For an example from German print media, see Karl-Peter Schwarz, “Vom Siebenschläfer zum Tiger der Karpaten,” Frankfurter Allgemeine Zeitung 26 August 2005. Accessed May 2014. On Slovenia and other new EU countries, see Marion Kraske and Jan Puhl, “Eastern Europe’s Economics Boom: The Tiny Tigers,” Der Spiegel 21 December 2005. Accessed May 2014.

7.Between 1991 and 2012, average election turnouts in Eastern Europe dropped from 72 to 57 percent. On this problem, which has come to affect all Western democracies, see Jürgen Kocka and Wolfgang Merkel, “Neue Balance gesucht. Gefährdet der Finanzkapitalismus die Demokratie?” WZB-Mitteilungen 144 (June 2014), pp. 41–44.–44_kocka_merkel.pdf. Accessed May 2014.

8.Merkel, Systemtransformation, pp. 394–435. Estonia and Poland formed exceptions to the aforementioned vote-out rule. Their respective prime ministers were reelected in 2009 and 2011.

9.University education for the lower classes was made possible to a large extent by discrimination against the former elites or their children, especially in the 1950s. On the education drive, see Segert, Transformationen in Osteuropa, p. 73. In the seventies, over 50 percent of students in the ČSSR came from working-class or farming backgrounds.

10.See on this term Gary S. Becker, Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Chicago: University of Chicago Press, 1964. (The last edition was published in 1993, after which interest dwindled.)

11.On income levels and different types of investment, see Berend, From the Soviet Bloc, pp. 121, 118–24.

12.Elisabeth Dunn has examined the differences in pre- and postsocialist production using the example of a Polish baby-food factory. See Elizabeth C. Dunn, Privatizing Poland: Baby Food, Big Business, and the Remaking of Labor, Ithaca: Cornell University Press, 2004, pp. 94–129.

13.See Agnieszka Knyt and Alicja Wancerz-Gluza, eds., Prywaciarze 1945–89, Warsaw: Karta, 2001.

14.On the “Polonia” enterprises, see Jerzy Kochanowski, “Pioneers of the Market Economy? Unofficial Commercial Exchange between People from the Socialist Bloc Countries (1970s and 1980s),” Journal of Modern European History 8 (2010), pp. 196–220. On komputerizacja, see Patryk Wasiak, “Komputeryzujemy się!” in Natalia Jarska and Jan Olaszek, Społeczeństwo polskie w latach 1980–1989, Warsaw: IPN, 2015, pp. 159–69. See also the report on the conference ‘Loopholes in the Iron Curtain. Economic Contacts between Eastern and Western Europe since the 1970s” (Vienna, 18–19 April 2013) at the H-Soz-u-Kult website: Accessed May 2013. On the general deficit in computer technology in socialist countries, see Berend, From the Soviet Bloc, p. 25.

15.On these figures, see Kochanowski, Jenseits der Planwirtschaft, pp. 427–28.

16.Ibid., pp. 200–50, and on vain attempts at state controls, pp. 117–53.

17.On this company, see the in-depth interview “Mój biznes” in the financial supplement of Gazeta Wyborcza, 30 September 2008, pp. 1–3. Other Polish companies were also able to get a foothold in this market niche, including the previously founded Inter-Fragrance and the juice and perfumes manufacturer Comindeks. The latter were among the “Polonia” enterprises.

18.See Knyt and Wancerz-Gluza, Prywaciarze 1945–89, pp. 105–8, 145–48. On the expanding underground economy in the ČSSR, see WIIW-Mitgliederinformation, 1989/10, pp. 8–15 (“The second economy in Czechoslovakia”).

19.Research has not confirmed whether this helped them after 1989. Małgorzata Mazurek traces a number of individual biographies (in Społeczeństwo kolejki. O doświadczeniach niedoboru 1945–1989, Warsaw: Trio, 2010, pp. 62, 67) to support the thesis that the pioneers of the market economy of the 1980s often foundered as entrepreneurs in later years. Some were successful, but statistics show that this group’s income generally dwindled; for many of them bazaar trading was a daily struggle for survival.

20.On Poland, Hungary, and the Czech Republic, see Pál Tamás and Helmut Steiner, eds., The Business Elites of East Central Europe, Berlin: Trafo, 2005. For a more detailed study of Poland, see Krzysztof Jasiecki, Elita biznesu w Polsce. Drugie narodziny kapitalizmu, Warsaw: IFIS, 2002. Jasiecki stresses the pluralism of the new economic elite; according to his estimates, over half of its members had been top managers of former state enterprises.

21.On the social mobility of former SED members, see Martin Diewald, Heike Solga, and Anne Goedicke, “Old Assets, New Liabilities? How Did Individual Characteristics Contribute to Labor Market Success or Failure After 1989,” in Diewald et al., eds., After the Fall of the Wall, pp. 65–88, here 78. Remarkably, a relatively high number of former party officials became self-employed and set up their own businesses.

22.See the statistics in Gabor Hunya, Shift to the East: WIIW Database on Foreign Direct Investment in Central, East and Southeast Europe, Vienna: WIIW, 2007; see also the slightly deviating figures in N. N., “Over the Hill? Foreign Investment in Eastern Europe May Be at a Peak,” Economist 25 June 2007, Accessed May 2014.The volume of FDIs on a global level increased fourfold between 1980 and 2000. See Berend, From the Soviet Bloc, p. 40. The Polish National Bank (NBP) arrives at a lower sum of FDIs, partly because property investments were not calculated before 2006. (In some respects this was the more meaningful mode of calculation; the property bubbles which affected the Baltic states, especially, did not have such a strong impact on the FDI statistics.) See the data on foreign direct investments on the NBP website: Accessed May 2014. According to the NBP, FDIs totaled almost ten billion euros in 2008 and 2009, but less than five billion in 2012.

23.See the IMF data on Poland’s GDP adjusted to purchasing power parity:; also the IMF data on the per capita GDP after purchasing power parity: Both accessed May 2014.

24.See Berend, From the Soviet Bloc, p. 260.

25.The data on GDPs and FDIs in this paragraph are drawn from the WIIW Handbook 2012, Table I/1.6; also WIIW Handbook 2012, Countries by indicator, Table II 1.8 (Romania), II/1.5 (Latvia), II/1.18 (Ukraine).

26.See Andrei Shleifer and Daniel Treisman, “Normal Countries: The East 25 Years after Communism,” Foreign Affairs 93 (2014). Accessed March 2015.

27.Bohle and Greskovits, Capitalist Diversity, p. 225.

28.See the report by N. N., “Volkswagen chystá znižovanie platov,” Hospodárske oviny. Accessed May 2014.

29.See “Länderbericht Rumänien,” Frankfurter Allgemeine Zeitung 16 December 2013, p. 20.

30.On rates of unemployment in Slovakia and other EU countries, see the Eurostat data: “Unemployment statistics.” Accessed May 2014.

31.On eastern Slovakia, see the report in Wiener Wirtschaftsblatt of 4 November 2013, p. 14. For a comparison of average incomes in Europe, see Eurostat: “Haushaltseinkommen nach NUTS-2-Regionen.” On the wages of workers in the automobile industry, see: “Slovenské automobilky zvýší mzdy zaměstnancům, nejvíce přidá VW.” Both access ed May 2014.

32.The debate over the extent of Poland’s modernization in the postwar period is especially controversial. For an overview of this debate in recent years and a critical view of the People’s Republic of Poland, see Dariusz Jarosz, “Problemy z peerelowską modernizacją,” Kwartalnik Historyczny120 (2013), pp. 365–84.

33.However, city residents looked down on country dwellers on account of the prevalent stereotype of backwardness rather than actual differences in living standards. See Zeithistorische Forschungen 10.2 (2013) and Klaus Bachmann’s article about social inequality in Poland under late state socialism in this special edition of the German historical journal.

34.All the figures in this paragraph are taken from Eurostat regional statistics: Accessed May 2014. Even at the time, the data for 1995 were not complete for all administrative districts, and the state of availability has worsened since, as Eurostat started deleting data from previous years in 2013–14. Current (though sometimes divergent) figures can be found in Eurostat, “Bruttoinlandsprodukt (BIP) zu laufenden Marktpreisen nach NUTS-3-Regionen.” Accessed May 2014.

35.Again, see the Eurostat regional statistics: Accessed May 2014.

36.See OECD, “Regional labour market TL3.” Accessed May 2014.

37.Eurostat does not provide any statistics on Ukraine. The Ukrstat data were made comparable by providing the equivalent value in euros under consideration of the changing purchasing power parities.

38.The statistics in this section on regional GDP in the western districts of the Ukraine and in Kyiv were calculated as follows: gross regional product (in the currency of the Ukraine, Hryvnia) in the years 2000, 2005, and 2008 according to the information provided by the Статистичний збірник “Регіони України” 2010 Частина ІI (Statistical anthology of the regions of the Ukraine 2010). The data can be accessed on the website of the State Statistical Office of the Ukraine (, and following the links “publikacii,” “regionalna statistika” and for earlier years “arkhiv”). Values in euro, adjusted to purchasing power parity, were calculated according to the purchasing power parities in WIIW Handbook 2012, Countries by indicator, Table II/4.18, Position/Table 64. It is important to note that wages earned abroad by migrant laborers are not factored into their regions’ domestic GDP. The regions may, then, be wealthier than their GDPs suggest. Tax evasion and clandestine work are also widespread phenomena that are not reflected in official statistics on GDP. Nevertheless, these remain an important indicator of economic performance.

39.See the report by the Warsaw Center for Migration Studies (Ośrodek Badań nad Migracjami): Zuzanna Brunarska, Małgorzata Grotte, and Magdalena Lesińska, Migracje obywateli Ukrainy do Polski w kontekście rozwoju społeczno-gospodarczego: stan obecny, polityka, transfery pieniężne, Warsaw: CMR, 2012, p. 61. The report is accessible online: Accessed May 2014.

40.Ibid., p. 13. In 2011, only 18,700 Ukrainians possessed an official work permit. On Ukrainian workers in the Czech Republic, see the website of the local diaspora organization: Accessed May 2014.

41.Stanisław Szczepanowski, Nędza Galicji w cyfrach i program energicznego rozwoju gospodarstwa krajowego, Lwów: Gubrynowicz und Schmidt, 1888. Szczepanowski compared Galicia with Ireland and Italy, and in some points with Bengal and China (see p. 3).

42.For data on these countries, see the website of the World Bank:;; Accessed May 2014.

43.In the last year before the crisis, 2008, the per capita GDP in Dresden was €29,900; in Görlitz, €18,400; in the Erzgebirge district, only €16,800—this is evidence of regional divergence on a small scale. As above, see the data in the Eurostat regional statistics:; also Eurostat, “Bruttoinlandsprodukt (BIP) zu laufenden Marktpreisen nach NUTS-3-Regionen.” Both accessed May 2014. Since the nineties, class-related inequality has also increased. For a historical perspective on urban-rural divergence in Germany, see Wendelin Strubelt, “‘Stadt und Land’—The Relation between City and Countryside. (Non-Urban Territories) The German Case—a German case? Reflections and Facts,” in Wendelin Strubelt and Grzegorz Gorzelak, City and Region: Papers in Honour of Jiří Musil, Opladen: Budrich UniPress, 2008, pp. 233–67.

44.See N. N., “SAV: Number of Slovak Caregivers in Austria Has Tripled,” Tasr 31 January 2012. Accessed May 2014.

45.Kuznets argued that in previous phases of economic growth (such as industrialization) income inequality grew, but shrank again in later development cycles. See Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review 45 (1955), pp. 1–28. I am grateful to Mária Hidvégi (Universität Konstanz) and Uwe Müller (GWZO Leipzig) for advice on literature concerning economic history.

46.For a long list of companies in the Polish food industry that went bankrupt, see: Andrzej Karpiński, Stanisław Paradysz, Paweł Soroka, and Wiesław Żółtkowski, Jak powstawały i jak upadały zakłady przemysłowe w Polsce, Warsaw: Muza, 2013, pp. 323–26.

47.Berend, From the Soviet Bloc, p. 74.

48.On agricultural policy in Vietnam, see Pham Quang Minh, Zwischen Theorie und Praxis. Agrarpolitik in Vietnam seit 1945, Berlin: Logos, 2003.

49.The number of unemployed almost doubled after 1997, reaching a record level of 20 percent in Poland (2002) and 19.5 percent in Slovakia (2001). See the data (in a long-term series) in Eurostat, “Arbeitslosenquoten nach Geschlecht, Alter und NUTS-2-Regionen (%),” On regional unemployment, see the Eurostat regional statistics: Both accessed May 2014.

50.See Goedicke, “A ‘Ready-Made State,’” p. 50.

51.Swetlana Alexejewitsch, Secondhand-Zeit. Leben auf den Trümmern des Sozialismus, Munich: Hanser, 2013, p. 125.

52.On PHARE, see Berend, From the Soviet Bloc, p. 87. On later programs, see also Andrzej Chwalba, Kurze Geschichte der Dritten Republik Polen, Wiesbaden: Harrassowitz, 2010, p. 184.

53.On the amount of funds granted and paid, see N. N., “EU Polen behauptet sich am Fördertrog,” Wiener Wirtschaftsblatt 18 February 2014, pp. 1, 8; also a Polish government document on the structural fund: “Wykorzystanie środków z funduszy strukturalnych w Polsce i w nowych państwach członkowskich UE.”–7FD9–484A-B093–1559BDF0E4D3/28926/pl_a_inne_kraje_0802091.pdf. Accessed May 2014.

54.For this calculation, the capital outflow abroad was deducted from the FDIs. On FDI in- and outflows, see WIIW Handbook 2012, Countries by indicator, Table II/1.17. On the figures for 2012, see the data collated by the Polish national bank on foreign direct investments in Poland: Accessed May 2014. Between 2007 and 2012, the capital inflow totalled 44.4 billion euros; according to the Polish Finance Ministry’s estimates in 2013 the volume of FDIs increased slightly on 4.8 billion the previous year. This makes a total of approximately fifty billion. On EU programs in the nineties, see Berend, From the Soviet Bloc, p. 87.

55.See the press release on cohesion policy in the EU by the European Commission of 30 May 2007:–721_de.htm. Accessed May 2014.

56.For an overview, see Kornai, “The Great Transformation,” pp. 207–44, here 229. On revenues in cities and rural areas of Poland, see Główny Urząd Statystyczny, Dochody i warunki życia ludności Polski (raport z badania EU-SILC 2011), Warsaw: GUS, 2012, p. 132. The difference in wages and salaries has been shrinking since 2008.

57.Galicia was an exception, lagging far behind, as did Hungary and especially the Carpathians—poverty here, then, is a long-term, enduring problem. On economic and social history in the latter period Austro-Hungarian Empire, see Volumes IX (2010) and I (1973) of the series edited by Peter Urbanitsch and Helmut Rumpler, Die Habsburgermonarchie 1848–1918, published by ÖAW.

58.The difference between the capital and the rural regions along the Russian border in per capita GDP is, similarly to Poland, about 5:1. See Macours and Swinnen, “Rural-Urban Poverty Differences”; Michael Harter and Reiner Jaakson, “Economic Success in Estonia: The Centre versus Periphery Pattern of Regional Inequality,” Communist Economies and Economic Transformation 9.4 (1997), pp. 469–90.

59.In the hypothetical case that a country’s Gini coefficient is zero, all its citizens would have the same amount of income at their disposal. A Gini coefficient at the highest possible rate of 100 (or 1, by an alternative mode of calculation) would indicate that one single individual possesses the country’s entire income. De facto, the Gini fluctuates in emerging and industrialized countries between rates of around 23 in more equitable societies (e.g. Sweden) and 60 in extremely inequitable societies (e.g. Brazil). On the Russian Gini, see Robinson, “The Context of Russia’s Political Economy,” pp. 15–50, here 32; see also the (partly divergent) data on the Gini coefficient in Russia published by Trading Economics: Accessed May 2014.

60.See the Gini calculations in Eurostat, “Gini-Koeffizient des verfügbaren Äquivalenzeinkommens.” Accessed May 2014. UN information (see table 5.3.b) is, again, slightly incongruent.

61.See World Bank, “Life Expectancy at Birth, Male (Years).” Accessed May 2014.

62.See Jonathan Tirone and Alexander Weber, “Ukraine Billionaire Firtash Jailed in Vienna on FBI Warrant,” Bloomberg 13 March 2014.–03–13/ukraine-billionaire-firtash-arrested-in-vienna-on-fbi-warrant.html. Accessed May 2014.

63.On welfare spending, see Segert, Transformationen in Osteuropa, p. 233.

64.The worst-off 20 percent of Russian society earned only 6 percent of national revenue in 2010; the wealthiest 10 percent, by contrast, had over a third of national revenue at their disposal, the top 20 percent just over half. See Trading Economics: Accessed May 2014.

65.On deeper-rooted reasons for criticizing the EU (and the West in general), see the still-relevant essay by Andrew C. Janos, “From Eastern Empire to Western Hegemony: East Central Europe under Two International Regimes,” East European Politics and Societies 15.2 (2001), pp. 221–49.

66.Zenonas Norkus has identified ten different patterns and sixty-four potential paths of change in his comparative analysis of political and economic transformation. See his On Baltic Slovenia and Adriatic Lithuania, Budapest: Central European University Press, 2012, p. 140 (also the following chapter to p. 198).

67.Keane and Prasad were commissioned by the IMF to compare paths of transformation. See Michael P. Keane and Eswar S. Prasad, “Poland: Inequality, Transfers, and Growth in Transition,” Finance & Development: A Quarterly Magazine of the IMF 38.1 (March 2001). Accessed May 2014.

68.On this data (and the data in the following paragraph), see Segert, Transformationen in Osteuropa, p. 233.

Chapter 6. Central European Cities: A Metropolitan Comparison

1.“Der Westn is besser / Der Westn is bunter / Und schöner und schauer / Und reicher und frei … Der Ostn is schlechter / Der Ostn is grauer / Und klein sind die Chancen / Und groß ist die Not.” (English translation by Charlotte Hughes-Kreutzmüller.) The song appears on the Wolf Biermann LP Gut KirschenessenDDR—Ça Ira! Hamburg: Electrola, 1990.

2.On the basic principles of historical comparison, see Heinz-Gerhard Haupt and Jürgen Kocka, eds., Geschichte und Vergleich. Ansätze und Ergebnisse international vergleichender Geschichtsschreibung, Frankfurt am Main: Campus, 1996; Hartmut Kaelble and Jürgen Schriewer, eds., Vergleich und Transfer. Komparatistik in den Sozial, Geschichts- und Kulturwissenschaften, Frankfurt am Main: Campus, 2003.

3.On average, food prices in Czechoslovakia increased by 24.6 percent in 1990 alone. See WIIW-Mitgliederinformation 1990/6, pp. 22–23.

4.Despite being an employee-friendly policy, it is one of the causes of the southern eurozone’s economic plight. These countries largely retained their customary indexation from the pre-euro era, resulting in higher inflation than in countries like Germany, where index-linking is uncommon.

5.On Poland, see WIIW-Mitgliederinformation 1990/8, p. 28 (stating a drop in real wages of 46 percent).

6.See Rocznik Statystyczny Województwa Warszawskiego 1991, Warsaw: Wojewódzki Urząd Statystyczny (henceforth WUS), 1991, p. 119. The earlier statistics refer to the entire voivodeship; data specifically on the city of Warsaw only exist from 1992. The exact figures are: average monthly household income of 2,276,000 złotys, of which 1,796,000 were wages, against monthly household expenditure of 1,882,000 złotys, of which 848,000 was for food (excepting alcoholic beverages). According to information from the Polish central bank, the rate of exchange in mid-1990 was 11,458 złotys for one US dollar. (In 1995, four zeros were deleted, resulting in the much lower rate of exchange.)

7.See, e.g., Jacek Kurczewski, Mariusz Cichomski, and Krzysztof Wiliński, Wielkie bazary warszawskie, Warsaw: Trio, 2010; Roch Sulima, “The Laboratory of Polish Postmodernity: An Ethnographic Report from the Stadium Bazaar,” in Monika Grubbauer and Joanna Kusiak, eds., Chasing Warsaw: Socio-Material Dynamics of Urban Change Since 1990, Frankfurt am Main: Campus, 2012, pp. 241–68; Janusz Dąbrowski, ed., Wybrane aspekty funkcjonowania targowiska “Jarmark Europa” na Stadionie X—lecia. Wyniki badań ankietowych przeprowadzonych na zlecenie firmy Damis, Warsaw: Instytut Badań nad Gospodarką Rynkową, 1996; Marcin Peterlik, Handel targowiskowy w roku 1999, Warsaw: Instytut Badań nad Gospodarką Rynkową, 2000.

8.Kochanowski, Jenseits der Planwirtschaft, p. 161, also 419–36.

9.On these and the following statistics, and the market’s development, see Ursula Weber, Der Polenmarkt in Berlin. Zur Rekonstruktion eines kulturellen Kontakts im Prozess der politischen Transformation Mittel- und Osteuropas, Neuried: Ars Una, 2002, p. 69.

10.A number of traders’ memoirs are included in the following documentation about Polish “prywaciarze” (self-employed) in the postwar era. See Knyt and Wancerz-Gluza, Prywaciarze 1945–89, pp. 105–8, 145–48.

11.See Mazurek, Społeczeństwo kolejki, pp. 107–42.

12.Weber, Der Polenmarkt in Berlin, p. 17.

13.Peterlik, Handel targowiskowy, p. 9.

14.Ibid., p. 21. On the number of market-related jobs, see ibid., pp. 16–19.

15.For a journalistic impression of Mexikoplatz, see Roland Girthler, Abenteuer Grenze. Von Schmugglern und Schmugglerinnen, Ritualen und “heiligen” Räumen, Vienna: Lit-Verlag, 2006, pp. 126–52. On raids and customs investigations conducted here, see pp. 139–40, 143.

16.The broader term is used here in contrast to “capitalism from below,” which focuses on aspects of the reforms, or system change “from above.” The traders not only did business and (at best) accumulated capital, but also transformed their mindsets and behaviors. On the categorization of capitalism as “from without,” “from above,” or “from below,” see King and Szelényi, “Post-Communist Economic Systems,” pp. 206–29.

17.Cf. WIIW-Mitgliederinformation 1990/8, p. 27.

18.See the data in 130 Lat Statystyki Warszawy 1864–1994, Warsaw: Wojewódzki Urząd Statystyczny w M. St. Warszawie, 1994; Przegląd Statystyczny Warszawa 2/12 (December 1993), p. 34. Unfortunately, the use of terms is not entirely consistent but varies between “enterprise” (zakłady) and “economic unit” (podmioty gospodarki). The term podmioty gospodarki narodowej also applies to legal entities (e.g., associations). Therefore the statistics cannot be precisely equated with the number of enterprises. Reliable data on Warsaw only exist from 1992, collated especially for this book.

19.See the special privatization supplement of the weekly newspaper Polityka (February 1993), “Prywatizacja IV, Dodatek poświęcony przekształceniom własnościowym,” pp. I, IV.

20.“Jedna dziewczyna w wielkiej desperacji / Chciała się oddać prywatizacji / A że nie była to tęga głowa / Wyszła jej spólka jednoosobowa,” Ibid., p. I (column 2).

21.See Investitionsbank Berlin, “Gründungsaktivitäten im Städtevergleich,” Berlin aktuell 28 Februar 2008, p. 1. Accessed May 2014. On the development of East German private enterprise after 1989, see Karl Ulrich Mayer, “After the Fall of the Wall: Living through the Post-Socialist Transformation in East Germany,” in Diewald et al., After the Fall, pp. 1–28, here 27.

22.Statistical evidence of this can be found in: Martin Diewald and Bogdan W. Mach, “Comparing Paths of Transition: Employment Opportunities and Earnings in East Germany and Poland during the First Ten Years of Transformation Process,” in Diewald, After the Fall, pp. 237–68, here pp. 261 and 267. Diewald and Mach conclude that Poland developed a tendency toward “owner capitalism” while the GDR was outgunned by West Germany.

23.See the data on business formations in Poland, Czechoslovakia, Hungary, and Bulgaria in Berend, From the Soviet Bloc, p. 61.

24.All the following figures are taken from Eurostat, “Bruttoinlandsprodukt (BIP) zu laufenden Marktpreisen nach NUTS-3-Regionen.” Accessed May 2014. In 2014 the figures on Berlin were revised upward somewhat to correspond with the retrospectively downward-corrected population figures.

25.Cf. Rocznik Statystyczny Warszawy (henceforth RSW), Warsaw: Urząd Statystyczny w Warszawie (henceforth USW), 1996, p. 144.

26.Cf. Bundesagentur für Arbeit, “Arbeitsmarkt in Zahlen. Entwicklung der Arbeitslosenquote für Deutschland, West- und Ostdeutschland von 1991 bis heute (2007).”–2007.pdf. Accessed May 2014.

27.See Grzegorz Kołodko, From Shock to Therapy: The Political Economy of Postsocialist Transformation, Oxford: Oxford University Press, 2000.

28.See the figures in Berend, From the Soviet Bloc, p. 169. Unfortunately there are no comparable data available on Warsaw. The present author’s inquiries and archival research remained fruitless.

29.For unemployment statistics on the capitals considered here, see Eurostat, “Arbeitsmarkt, jährlich—Städte und Ballungsräume.” Accessed May 2014. The unemployment rate among women was 9.8 percent compared to 7.9 percent among men, indicating that women were more often losers during transformation.

30.The data on income distribution is taken from Eurostat Urban Audit: Accessed July 2011. Unfortunately some of the previously available data are no longer accessible, therefore the 2011 status is given here. (For current data, see Accessed May 2014.)

31.Dieter Stiefel and Schumpeter-Gesellschaft, eds., Der “Ostfaktor.” Österreichs Wirtschaft und die Ostöffnung 1989 bis 2009, Vienna: Böhlau, 2010.

32.See the WKO website: Accessed May 2014.

33.On population development in Vienna, see the municipal authority statistics: Accessed May 2014. (The population of Vienna grew in the period 2000–2005 by ninety-four thousand; in 2006 by another twenty thousand.) On demographic development in the nineties, see the information provided by the Austrian Center for Democracy (Demokratiezentrum): Hansjörg Hansely and Manfred Schopper, “Wien im Aufbruch.” Accessed May 2014. Some of the figures given here are higher.

34.As above, these data are based on the Eurostat regional statistics: Accessed May 2014.

35.The figures on Kyiv are based on information (in the national currency, hryvnia) from the state statistical agency of the Ukraine: Accessed May 2014. The equivalent value in euros, adjusted to purchasing power parity, was calculated by means of the rates of exchange and purchasing power parities in the WIIW Handbook 2012, Countries by indicator, Table II/4.18, Position 64.

36.On urban development on a global level, see e.g. Saskia Sassen, The Global City: New York, London, Tokyo, Princeton: Princeton University Press, 2001.

37.For statistics on Berlin and the other capitals, see Eurostat, “Bruttoinlandsprodukt (BIP) zu laufenden Marktpreisen nach NUTS-3-Regionen.” Accessed May 2014. In 2014 these figures were partly revised upward, suggesting that Berlin’s per capita GDP stagnated, rather than decreased, between 1995 and 2005. I was not able to ascertain exactly why the figures were revised, but it was probably because the population statistics were revised downward in 2013, implying that Berlin’s GDP was dispersed among fewer people. On Berlin’s long-term economic weakness, see IHK Berlin and Handwerkskammer Berlin, Berliner Wirtschaft in Zahlen. Ausgabe 2009, Berlin: Heenemann, 2009, p. 9. Accessed May 2014.

38.For unemployment statistics on Berlin (and other EU cities), Eurostat, “Arbeitsmarkt, jährlich—Städte und Ballungsräume.” Accessed May 2014. The data here are calculated according to ILO standards, or the percentage of persons in civilian employment. The figure 19.2 percent is taken from the German Federal Insurance Fund for Salaried Employees (BfA) and differs slightly from Eurostat information.

39.See Martens, “Der Zug nach Westen.”

40.A few exceptions were the French company JC Decaux (the largest European supplier of outdoor advertising) and ALSTOM Grid (an electricity grid specialist). The Berlin senate website describes the city as a “gateway to Central and Eastern Europe” but does not support the claim with any in-depth information or details of existing companies. See the information at Accessed May 2014.

41.On the Berlin bank scandal, see Hans-Peter Schwintowski, “Berliner Bankenskandal—und was wir daraus lernen könnten,” Humboldt Forum Recht 7 (2005), pp. 60–184. Accessed May 2014.

42.See the online plenary records of the Berlin parliament. Sometimes doubts about whether Berlin is actually a metropolis were expressed, but rarely by CDU politicians. See, e.g., the argument put forward by long-serving senator, CDU parliamentary party leader, and chief executive of the mortgage bank Berlin Hyp (thus one of the main culprits responsible for the Berlin bank crisis) Klaus-Rüdiger Landowsky, “Von der Großstadt zur Weltstadt zur Metropole” (From a City to a Cosmopolitan City to a Metropolis), in Abgeordnetenhaus von Berlin, 13. Wahlperiode, Plenarprotokoll 13/37, 37. Sitzung, 11. Dezember 1997, p. 2386. Accessed May 2014.

43.Wowereit’s actual words, spoken in an interview with Focus Money in November 2003, translate as: “We are indeed poor, but we’re still sexy” (“Wir sind zwar arm, aber trotzdem sexy”). See N. N., “Arm, aber sexy,” Focus online 19 October 2006. Accessed May 2014.

44.See, e.g., the analysis published in 2003 by the Institut für Wirtschaftsforschung Halle: Accessed February 2015.

45.On transfer payments to East Germany, see Oliver Holtemöller and Martin Altemayer-Bartscher, “Auf welche Frage sind zwei Billionen die Antwort,” Wirtschaft im Wandel, 3/2014. Accessed February 2015. According to the lower estimate by the Bundeszentrale für Politische Bildung, the transfer payments ran to 1.6 billion euros in the two decades following German reunification. See Jürgen Kühl, “25 Jahre deutsche Einheit: Annäherungen und verbliebene Unterschiede zwischen West und Ost,” Bundeszentrale für Politische Bildung 2014. Accessed February 2015. The problem with these estimates is that the German government has not collated any exact statistics on transfer payments since 1999, and allowance must be made for the distinction between gross and net payments (deducting the return flow from the East to the federal government and the welfare state). Transfer payments were also made in the form of development assistance (which, however, West German entities could also apply for) and special funds (e.g., in the context of economic support programs). For a comprehensive evaluation, see Ulrich Blum, Joachim Ragnitz, Sabine Freye, Simone Scharfe, and Lutz Schneider, Regionalisierung öffentlicher Ausgaben und Einnahmen—Eine Untersuchung am Beispiel der Neuen Länder, Halle: IWH, 2009 (= IWH Sonderheft 4).

46.See Grubbauer and Kusiak, Chasing Warsaw.

47.On the average amount of living space per person in Berlin, see the information published by the senate administration: Accessed October 2013. (In 2014 the link unfortunately no longer functioned.) Up-to-date information on the Berlin housing market is available at the following address: Accessed May 2014. On the situation in Warsaw in 1988 (based on data on the cities in the Warsaw voivodeship), see Rocznik Statystyczny Województwa Warszawskiego, p. 219.

48.See the statistics in 130 lat statystyki, p. 291; RSW 2012, Warsaw: Urząd Statystyczny w Warszawie 2012, p. 183. With a surface area of 180 feet, the average apartment here is still distinctly smaller than in Berlin or Vienna, but almost thirty-two feet larger than the average in 1988. The number of people per room has fallen from one to 0.66, making it easier to keep out of each other’s way. The differences within Warsaw are interesting. In working-class districts such as Ursynów and Praga, the population still lives more densely packed. On Warsaw’s gated communities, see Jacek Gądecki, “Gating Warsaw: Enclosed Housing Estates and the Aesthetics of Luxury,” in Grubbauer and Kusiak, Chasing Warsaw, pp. 109–32, here 115. Gądecki estimates that about 75 percent of the apartments built since 1989 are in gated communities.

49.All the data in this paragraph are based on the statistical yearbooks published by the statistical agency of the city of Warsaw and the mid-year rate of exchange from złotys to dollars (according to the Polish national bank). See RSW, Warsaw: Urząd Statystyczny w Warszawie (henceforth USW), 1996 (for 1995), 2002 (for 2000), 2006 (for 2005), 2010 (for 2008) and 2012. The figures on GDP are taken from Eurostat, “Bruttoinlandsprodukt (BIP) zu laufenden Marktpreisen nach NUTS-3-Regionen.” Accessed May 2014.

50.These figures are based on Warsaw’s car registration statistics. See Rocznik Statystyczny Województwa Warszawy 1991, p. LXV; RSW 2002, p. 404 (for 2000); RSW 2006, p. 285; RSW 2010, p. 286. On Vienna, see Statistisches Jahrbuch der Stadt Wien 2013, p. 274.

51.For the statistics on the years 1995–2005, see RSW 2006, p. 285.

52.See Gazeta Wyborcza; “Dwa i pół metra,”Gazeta Stołeczna 8 June 2001, p. 4.

53.See RSW 2002, p. 221. On a more positive note, investments have been made in daycare for toddlers since 2005, and the number of daycare places has risen, but is still some 25 percent lower than in 1989. For recent figures, see RSW 2012, p. 231.

54.RSW 2012, p. 181.

55.Recently an increasing number of commentators have spoken out in favor of high-rise development on Alexanderplatz. See Niklas Maak, “Berlin Alexanderplatz die Wahrheit der Türme,” Frankfurter Allgemeine Zeitung 14 April 2013. Accessed May 2014.

56.In 2012, Berlin recorded almost twenty-five million overnight stays and a steady increase in the number of foreigner visitors. See the information published by Senatsverwaltung für Wirtschaft, Technologie und Forschung: Accessed May 2014.

57.The difference is due to the appreciation of the Ukrainian currency caused by a distinctly higher rate of inflation in parallel with a more or less constant rate of exchange for euros. The rapid appreciation presaged the crisis of 2008–9, as Ukraine, or rather Kyiv, grew more and more expensive. In absolute numbers, Kyiv’s per capita GDP, adjusted to purchasing power parity, grew by 24.4 percent from the equivalent of €14.339 to €17.837. As previously, these figures are based on Ukrainian statistics and WIIW parity estimates.

58.Unfortunately, no exact figures are available from Eurostat, which collates by “NUTS 2 regions” which are greater than just the capitals. See Eurostat, “Haushaltseinkommen nach NUTS-2-Regionen.” Accessed May 2014. The figures are even more disparate if one compares disposable incomes rather than net primary incomes. This is due partly to the tax bracket creep, which starts much lower in Poland, the Czech Republic, and Hungary. By German or Austrian standards, then, they place a relatively high burden on low- and mid-level incomes.

59.See Eurostat, “Arbeitslosenquoten nach Geschlecht und Alter (%).” Accessed May 2014.

60.See N. N., “Berlin—Hauptstadt der Armen,” Neue Zürcher Zeitung 25 October 2002.–1.434038. Accessed May 2014.; Rainer Woratschka, “Berlin ist Armuts-Hochburg,” Der Tagesspiegel 20 December 2012. Accessed May 2014. For more in-depth information, see Berliner Senatsverwaltung für Gesundheit, Umwelt und Verbraucherschutz, Gesundheitsberichterstattung Berlin. Spezialbericht. Sozialstrukturatlas Berlin 2008. Accessed May 2014. Vienna does not publish an official poverty report, but the number of poor residents is lower than in Germany and did not rise significantly after the crisis. See the report from the Austrian conference on poverty: Accessed May 2014.

61.See N. N., “Großer Vergleich: Leipzig ist Deutschlands Armutshauptstadt,” Spiegel Online 30 June 2010. Accessed May 2014; N. N., “Ländervergleich: Berlin ist Deutschlands Armutshauptstadt,” Spiegel Online 18 January 2010. Accessed May 2014. It should be noted that the poverty statistics are calculated according to average German incomes and prices, which are far lower in Berlin than in Munich or Hamburg. However, the level of poverty in Berlin is also illustrated by the number of social benefit claimants, almost 20 percent of the population.

62.See RSW 2012, p. 172. In 2010 the average wage in the food services industry and for “supportive activities” was 2700 złotys (or about $680).

63.Cf. “Berlin lernt das Geldverdienen,” Frankfurter Allgemeine Sonntagszeitung 17 November 2013, p. 30.

64.On recent population development, see the information published by the Berlin state office for statistics: Accessed May 2014.

65.On business registrations and cancellations, see the report by Berliner Investitionsbank: “Gründungsaktivitäten im Städtevergleich,” Berlin aktuell 28 February 2008, p. 2. Accessed May 2014.

66.See the information in Stadt Wien, Magistratsabteilung 17—Integration und Diversität, Monitoring. Integration. Diversität. Wien 2009–2011, p. 10. Accessed May 2014.

67.See Eurostat, “Bruttoinlandsprodukt (BIP) zu laufenden Marktpreisen nach NUTS-3-Regionen.” Accessed May 2014.

68.Cf. the Eurostat press release 29/2014 of 27 February 2014, “Regional GDP. GDP per Capita in the EU in 2011: Seven Capital Regions among the Ten Most Prosperous.”–27022014-AP/EN/1–27022014-AP-EN.PDF. Accessed May 2014. I am grateful to Dr. Roman Römisch of the Vienna Institute for International Economic Studies for drawing my attention to this press release.

69.On the consequences of structurally weak regions for growth centers, see Paul Krugman, “Increasing Returns and Economic Geography,” The Journal of Political Economy 99.3 (June 1991), pp. 483–99.

70.See Branko Milanovic, “Reform and Inequality in the Transition: An Analysis Using Panel Household Survey.” In Gerard Roland, ed.: Economies in Transition: The Long Run View, London: Palgrave, 2013, pp. 84–108, here 101.

Chapter 7. The Great Recession: 2008–9 and Its Consequences

1.See Norkus: On Baltic Slovenia, p. 130. In 2006 the Baltic states and the European successor states of the Soviet Union achieved an average economic growth of 10 percent.

2.See the data on GDP in the EU countries in Eurostat, “BIP pro Kopf in KKS.” Accessed May 2014. The data on East Germany refer to the five new German states without Berlin. Including East Berlin, which the state-premise of the database prohibits, the East German GDP would approach that of the Czech Republic, as always, adjusted to purchasing power parity.

3.See WIIW Handbook 2012, p. 11.

4.By 1914, the Austro-Hungarian Empire had partially caught up with the West, i.e., the pioneers of industrialization. The preceding period is, then, comparable with the transformation era. On the catch-up process in the nineteenth century, see Angus Maddison, Monitoring the World Economy, 1820–1992, Paris: OECD, 1995. On East Central Europe more specifically, see Andrew C. Janos, East Central Europe in the Modern World: The Small States of the Borderlands from Pre- to Postcommunism, Stanford: Stanford University Press, 2000, pp. 130, 138, 349.

5.See the data in Eurostat, “BIP pro Kopf in KKS.” Accessed May 2014.

6.It wouldn’t be the first time. Before the Second World War, Poland’s GDP was higher than that of Spain and Portugal, although it plummeted in the communist era to only 49 percent of Spain’s GDP; see Jarosz, “Problemy z peerelowską modernizacją,” p. 366.

7.The figures (which are not adjusted to purchasing power parity) are accessible on the UN website at Accessed May 2014. Adjusted for purchasing power, the WIIW estimated the Polish per capita GDP of 1990–91 to be around 4600 euros (at 1995 rates). See WIIW Handbook 2012, Countries by indicator, Table II/1.7.

8.See WIIW Handbook 2012, Countries by indicator, Table II/1.7. These statistics are based on prices in 1995 converted into euros. On Germany, see also “Bruttoinlandsprodukt Deutschlands ab 1970 (in konstanten Preisen von 1995) nach Angaben des Stat. Bundesamtes und des Arbeitskreises Volkswirtschaftliche Gesamtrechnungen der Länder.” Accessed May 2014.

9.See the data in WIIW Handbook 2012, pp. 66–96, and the (slightly divergent) GDP statistics compiled by the World Bank: Accessed May 2014.

10.See WIIW Handbook 2012, Countries by indicator, Table II/1.3.

11.Berlin is included with the former West German states for this intra-German comparison, which of course alters the premise; see DIHK, “Ost-Wirtschaft kämpft auch 2014 um Anschluss.”–11–14-ostkonjunktur. Accessed May 2014. On recent trends in the East Germany economy, see also the final section of Berghoff/Balbier, East German Economy.

12.See Bohle and Greskovits: Capitalist Diversity, p. 256 (also for recommendations for further reading).

13.See WIIW Handbook 2012, pp. 66, 70. In 2008 Lithuania still achieved nominal growth, but it fell into an equally deep recession in 2009.

14.For a comparison of FDI inflows, see Bohle and Greskovits, Capitalist Diversity, p. 225.

15.On migration from Poland before and after EU accession, see Izabela Niemirska, “Migracje zarobkowe Polaków w dobie kryzysu,” in Młodzi ekonomiści wobec kryzysu. Gospodarka. Finanse. Rynek Pracy, Szczecin: Uniwersytet Szczeciński, 2010, pp. 221–32.

16.On this concept and the comparable mortgage allocation practices in the United States before 2008, see Stiglitz: Freefall, pp. 175–76.

17.The phenomenon of foreign currency loans became widely known in Poland after about 1997, when the number of personal loans in general, and the proportion in foreign currencies, rose sharply. See N. N., “Wstępne wyniki,” Rzeczpospolita 11 January 1997, p. X1. By 2000 the Polish media were reporting enthusiastic feedback from bank clients, pleased to have made large savings or taken out much larger loans than they would otherwise have been able to. See N. N., “Dollar, euro czy złoty,” Rzeczpospolita 19 May 2000, p. X1.

18.This commercial is accessible online on YouTube: Accessed May 2014. My attention was drawn to it by Roland Adrowitzer and Ernst Gelegs, Schöne Grüße aus dem Orbán-Land. Die rechte Revolution in Ungarn, Graz: Styria, 2013, p. 108. Similar (although not quite as brazen) Polish commercials are also accessible online on YouTube:, Accessed May 2014.

19.See, for example, an article of 2001 in Rzeczpospolita entitled “Nobody Considers the Risks”: N. N., “Nikt nie patrzy na ryzyko,” Rzeczpospolita 2 May 2001, p. X1. (The article was hidden in a very specialist business supplement of this finance-oriented, conservative daily newspaper with a limited readership.)

20.See the exchange rates on the websites of the Polish and Hungarian national banks:; Accessed May 2014.

21.See N. N., “Fremdwährungskredite. Wege aus der Franken-Falle,” Konsument (11 November 2010). Accessed May 2014. Accessed May 2014. In 2011 the financial market authority intervened to regulate the market. See the FMA documents on minimum standards: Accessed May 2014.

22.See APA, “Ungarn beschließt Gesetzt zu Fremdwährungskrediten,” Die Presse 20 December 2012. Accessed May 2014.

23.See András Szigetvari, “Kartenhaus aus Euro, Franken und Yen wackelt,” Der Standard 24 November 2010. Accessed May 2014.

24.On this law of September 2011, see APA, “Ungarn beschließt Gesetz zu Fremdwährungskrediten.”

25.The original wording is: “nicht als Massenprodukt geeignet,” cited from FMA: “Ergänzung zu den FMA Mindeststandards zur Vergabe und Gestionierung von Fremdwährungskrediten und Krediten mit Tilgungsträgern vom 16. Oktober 2003. Ergänzung vom 22. März 2010 (FMA-FXTT-EMS),” p. 5. Accessed May 2014. Companies and governments have used foreign currency loans for many years. (For example, the city of Vienna has borrowed francs from Switzerland for decades because of the lower interest rates.) The “innovation” after 1989 was the extension of the practice to masses of private debtors.

26.Cf. the data in RSW 2010, p. 286.

27.All the population statistics cited in this paragraph are taken from the WIIW. See WIIW Handbook 2012, Countries by indicator, Table II/1.1, 3, 5, 6, 8. The decline in the population is not necessarily due entirely to migration; according to the Economist, 6 percent of the Latvian population migrated in search of work between 2008 and 2012, accounting for two-thirds of the country’s crisis-related population shrinkage. See N. N., “European Labour Mobility: On the Move.” Accessed May 2014.

28.Cf. the figures in WIIW Handbook 2012, Countries by indicator, Table II/1.8. According to these, the population decreased from 21,438,000 to 1,991,000 in 2010–11.

29.On emigration and immigration trends in Ireland, see OECD, International Migration Outlook 2014, Paris: OECD Publishing, 2014, pp. 262–63; also specifically on emigration. Accessed February 2015.

30.FDI capital stock amounted to over fifty billion euros in 2011. Cf. WIIW Handbook 2012, Table I/2.9 (FDI inward stock, p. 49).

31.On Russia’s ousting of foreign corporations, see the dossier covering several years by the magazine Spiegel: Accessed May 2014.

32.The speech is documented on the Russian government website. See N. N., “Der Präsident von Russland auf der Münchner Konferenz zu Fragen der Sicherheitspolitik-Teil 1.” Accessed May 2014.

33.See Neill Robinson, “Introduction,” in idem, ed., The Political Economy of Russia, Lanham: Rowman & Littlefield, 2013, pp. 1–14; also the essay contained in this anthology by Gerald Easter, “Revenue Imperatives: State over Market in Postcommunist Russia,” pp. 51–68.

34.The Western press seems to have misconstrued the nature of Russia’s state-run economy, erroneously referring to RosAtom as a “corporation.” See inter alia N. N.: “Atomkraftwerksbau: Ungarn vergibt milliardenschweren Auftrag an Russland,” Der Spiegel 14 January 2014. Accessed May 2014.

35.On these taxes and Hungarian discrimination against foreign companies, see Adrowitzer and Gelegs, Schöne Grüße, pp. 99–107.

36.See Sándor Richter, “Im Würgegriff des Populismus. Ungarns Volkswirtschaft,” Osteuropa 61/12 (2012), pp. 213–24.

37.According to official statistics, two hundred and fifty thousand Hungarian citizens lived and worked abroad in June 2013, up from only six thousand in 2010 (see Adrowitzer and Gelegs: Schöne Grüße, p. 112). The actual number of labor migrants is probably higher as the statistics do not include seasonal workers or employees of Hungarian subcontractors abroad.

38.On Orbán and Fidesz, see Edith Oltay, Fidesz and the Reinvention of the Hungarian Center-Right, Budapest: Századvég, 2013.

Chapter 8. Southern Europe: The New East?

1.See the statistics provided by the education union FLC CGIL on the “Legge di stabilità”: Accessed May 2014.

2.In early 2014, Italian private enterprise still had outstanding invoices worth 91 billion euros. See N. N., “Fallimenti record per colpa dei debiti Pa,” La Repubblica 3 February 2014. Accessed May 2014.

3.The statistics on Italy refer to industrial production, not including the construction industry, and are taken from the Italian government’s statistical agency (Istat). Unfortunately, it is not possible to reconstruct my online research via a specific link. One must take the more arduous route of going to the Istat website ( and clicking through to “Industria e Costruzioni,” “Produzione,” and “Indice della produzione industriale,” entering the corresponding years. For the statistics on Poland, see WIIW Handbook 2012, Countries by indicator, Table II/1.17.

4.In the book Case Studies on Modern European Economy. Entrepreneurs, Invention, Institutions, London: Routledge, 2013, Iván Berend briefly considers the crisis in conclusion, but attributes it primarily to “cultural-behavioral factors” and criticizes southern European tendencies toward extravagance, corruption, and tax evasion. It is striking how often economists refer to cultural factors when other explanations fail. Unfortunately the standard English-language work, the Cambridge Economic History of Modern Italy, does not extend to recent years.

5.Cf. Wirtschaftskammer Österreich, “Öffentliche Verschuldung. Staatsschuldenquote (Schuldenstand des Gesamtstaates in % des BIP).” Accessed May 2014. An additional difference is that the Hungarian national debt has not grown further relative to the GDP since the outbreak of the crisis.

6.On the FDI (including those from Italy) in the new EU member states, see Łukasz Białek, “Przegląd bezpośrednich inwestycji zagranicznych w Europie Środkowej i Wschodniej.” Accessed May 2014.

7.The figures on the share of Western European capital in Eastern European FDI vary. According to information from the National Bank of Poland, 90 percent of FDI invested in Poland by 2011 came from Western Europe; see “Zagraniczne inwestycje bezpośrednie w Polsce w 2010 roku” (October 2011)., especially pp. 23, 143; accessed May 2014. On further developments, see the data on the website of the NBP: Accessed May 2014. Berend puts the proportion in Hungary at 80 percent; see Berend, From the Soviet Bloc, p. 117. A Polish-language survey of the entire region estimates the share of all FDI from the eurozone at between 70 and 90 percent; see Białek, “Przegląd bezpośrednich inwestycji zagranicznych w Europie Środkowej i Wschodniej.” In Russia the EU countries’ share of FDI is 64 percent; see Ernst & Young, “Russia 2014: Shaping Russia’s Future.”$FILE/2013-Russia-attractiveness-survey-Eng.pdf. Accessed May 2014.

8.See Berend: From the Soviet Bloc, p. 126. There is, however, no direct connection between the FDI in the new European Union countries and the level of domestic investment, which is often criticized as too low in Germany and is even lower in Italy, although it was thought that the high inflow of FDI in eastern Europe might be linked to an outflow of domestic capital; see Kálmán Kalotay, “Investment Creation and Diversion in an Integrating Europe,” in Peeter Vahtra and Elina Pelto, eds.: The Future Competitiveness of the EU and Its Eastern Neighbours: Proceedings of the Conference, Turku: Pan-European Institute, 2007, pp. 49–65.

9.On the lower costs in Bulgaria and Romania, see Kirsten Reinhold, “Textile Quelle Schwarzes Meer,” TextilWirtschaft 19 (19 May 2002).[]=170615. Accessed May 2014.

10.For the results of the various studies, see OECD, “PISA—Internationale Schulleistungsstudie der OECD.” Accessed May 2014. The Italian (and Spanish) PISA results showed a striking deterioration between 2000 and 2006. Since then, their results in most categories (reading, math) have improved. The same is true of Poland, which attained particularly good results in math.

11.On broadband internet access and provision to private households, see Heidi Seybert, “Internet Use in Households and by Individuals in 2012,” Eurostat. Statistics in Focus 50/2012.–050/EN/KS-SF-12–050-EN.PDF. Accessed May 2014.

12.On the rise and later decline of Olivetti, see Giovanni De Witt, Le fabbriche ed il mondo. L’Olivetti industriale nella competizione globale, 1950–90, Milan: Franco Angeli, 2005. On the individual devices, see the comprehensive documentation by Storiaolivetti: Accessed March 2014. (At the last attempt in May 2014, the website was unfortunately no longer accessible.) On the growth phase in the Italian economy during the eighties, see Paul Ginsborg, Storia d’Italia 1943–1996. Famiglia, società, stato, Turin, Einaudi, 1998.

13.On the development of the spread in 2011, see Michela Scacchioli, “Da Berlusconi a Monti. La drammatica estate 2011 tra spread e rischi d bancarotta,” La Repubblica 10 February 2014. Accessed May 2014.

14.For a critical view on austerity, see Giulio Marcon and Mario Pianta, Sbilanciamo l’economia. Una via d’uscita dalla crisi, Rome: Laterza, 2013. However, like many left-wing Italians, these authors also question European integration after the Maastricht Treaty.

15.On these figures, see Eurostat, “Arbeitslosenquote nach Altersgruppe.” Accessed May 2014.

16.On these figures, see OECD, “Country Statistical Profile: Italy.” Accessed May 2014.

17.On regional divergence in Italy since the crisis, see Inequalitywatch, “Income Inequalities in Italy: Trend over Time.” Accessed May 2014. On the more long-term decline in southern Italy, see Carlo Borgomeo, L’equivoco del Sud. Sviluppo e coesione sociale, Rome: Laterza, 2013.

18.See Francesco Barbagallo, La questione italiana. Il Nord e il Sud dal 1860 a oggi, Rome: Laterza, 2013, p. 218.

19.Borgomeo attributes Italy’s current problems primarily to the bias of regional aid since the mid-fifties toward industrializing the South (in a similar manner to previous regimes’ efforts to industrialize rural regions of Poland and the ČSSR); see Borgomeo, L’equivoco del Sud, pp. 14–23.

20.On the alternative use of regional aid (the funds were redirected to areas such as the health system), see Barbagallo, La questione italiana, pp. 207–8; on social expenditure, see ibid., p. 218; on the development of regional GDP in Italy until 2012, see Raffaele Ricciardi, “Il Pil del Sud è il 42 % meno del Nord. Così la crisi ha segnato il Mezzogiorno,” La Repubblica 27 November 2013. Accessed May 2014. According to this report, the regional GDP in Sicily, Calabria, and Campania in 2012 was between 16,400 and 16,800 euros per capita; and 17,400 euros in the Mezziogiorno region as a whole. (Some 2 percent should be deducted after adjustment to purchasing power, to reflect the lower purchasing power of a euro in Italy than the EU average.) Poland’s purchasing-power-adjusted GDP in 2012 was almost 18,000 euros; see Trading Economics, “Polen—BIP pro Kopf PPP.” Accessed May 2014. The comparison is relativized by equal consideration of the poorer parts of Poland. Moreover, the Italian GDP was still eightfold that of Poland in absolute terms.

21.On attitudes to returning home (e.g., to Poland), see Izabela Grabowska-Lusińska, Poakcesyjne powroty Polaków, Warsaw: Ośrodek Badan nad Migracjami, 2010, pp. 27–36 (= CMR Working Papers 43/101).

22.Frithjof B. Schenk and Martina Winkler, eds., Der Süden. Neue Perspektiven auf eine europäische Geschichtsregion, Frankfurt am Main: Campus, 2007.

23.See Larry Wolff, Inventing Eastern EuropeThe Map of Civilization on the Mind of the Enlightenment, Stanford: Stanford University Press, 1994.

24.Cited in Andrew Higgins, “Used to Hardship, Latvia Accepts Austerity, and Its Pain Eases.” New York Times 1 January 2013. Accessed May 2014.

25.For a counternarrative against the Chilean neoliberal success story, see Ricardo Ffrench-Davis, Economic Reforms in Chile: From Dictatorship to Democracy, third edition, London: Macmillan 2010. There are of course many more experts on Chile, such as Michael J. Kurtz and Peter Winn, but Ffrench-Davis is especially interesting because he was trained as an economist at the University of Chicago and therefore knows both viewpoints, the neoliberal and the Christian Democratic. Many expert reports criticizing Pinochet’s neoliberal policies around 1989–90 can also be found in: World Bank Archive, World Bank File 16435 (Chile—Lending, Economy and Program (LEAP)—General—volume 2); World Bank File 16436 (Chile—Lending, Economy and Program (LEAP)—General—volume 3).

26.Cf. Dietmar Neuerer, “Von Lettland lernen, heißt siegen lernen,” Handelsblatt 28 February 2012. Accessed May 2014.

27.They are calculated by taking the number of labor migrants relative to total populations; see W. P., “European Labour Mobility,” Economist 13 January 2014. Accessed May 2014.

28.See Kaelble, Sozialgeschichte Europas; Béla Tomka, A Social History of Twentieth-Century Europe, Abingdon: Routledge, 2013.

29.See the figures specifically concerning young people compiled by the agency Datagiovani: “Sempre meno giovani contribuenti in Italia.” Accessed May 2014. Incomes of young people in southern Italy were lower. Even factoring in undeclared incomes (the calculations were made on the basis of tax declarations, or tax office information) and the number of young people in education programs and vocational training, the average income is still extremely low.

30.See N. N., “L’allarme dell’Eurispes sull’Italia,” La Repubblica 30 January 2012. Accessed May 2014. See also N. N., “Impossibile arrivare a fine mese, uno su tre chiede aiuto a mama e papa,” Rai News 24 (9 November 2013). Accessed May 2014.

31.See Peter Spahn, “Die Schuldenkrise der Europäischen Währungsunion,” WISO direkt (December 2010). Accessed May 2014. The figures look different if one factors in corporate and private loans, which were negligible in socialist countries. Foreign debt in Spain, Portugal, and Greece is worth 100 percent of the GDP or more.

32.Waldemar Kuczyński, “Czy Polska zbiedniała?,” Tygodnik Powszechny 11 September 2005, p. 11.

33.See N. N., “Die große Enteignung. Zehn Prozent ‘Schulden-Steuer’ auf alle Spar-Guthaben,” Deutsche Wirtschaftsnachrichten 17 October 2013. Accessed May 2014. Later the IMF backtracked and claimed the paper had only contained reflections.

Chapter 9. Cotransformation: The Case of Germany

1.Cultural transfer research is too broad a field to sum up in one footnote. The standard works by Michael Werner and Michel Espagne are discussed in Philipp Ther, “Comparisons, Cultural Transfers and the Study of Networks: Towards a Transnational History of Europe,” in Heinz-Gerhard Haupt and Jürgen Kocka, eds., Comparative and Transnational History: Central European Approaches and New Perspectives, New York: Berghahn, 2010, pp. 204–25.

2.On cultural transfers via dissociation, see Martin Aust and Daniel Schönpflug, eds., Vom Gegner lernen. Feindschaften und Kulturtransfers im Europa des 19. und 20. Jahrhunderts, Frankfurt am Main: Campus, 2007.

3.On the concept of “speech acts,” see Quentin Skinner, “Conventions and the Understanding of Speech Acts,” The Philosophical Quarterly 20.79 (April 1970), pp. 118–38.

4.Cf. Accessed February 2015.

5.See Goedicke, “A ‘Ready-Made State,’” p. 49.

6.On the overburdening of the prospects of success of the German welfare state, see Gerhard A. Ritter, Der Preis der deutschen EinheitDie Wiedervereinigung und die Krise des Sozialstaates, Munich: Beck, 2006.

7.See Edgar Wolfrum, Rot-Grün an der Macht. Deutschland 1998–2005, Munich: Beck, 2013, pp. 34–35.

8.See the interview conducted by Spiegel editors Olaf Ilhau, Stefan Aust, and Gabor Steingart with Gerhard Schröder, “Wir haben bessere Karten.” Der Spiegel 21 September 1998. Accessed May 2014.

9.See N. N. “The Sick Man of the Euro,” Economist 3 June 1999. Accessed May 2014.

10.On the “Riester-Rente” pension scheme, see Wolfrum, Rot-Grün, pp. 203–9.

11.On global debates over privately financed pension systems, see Mitchell Orenstein, Privatizing Pensions: The Transnational Campaign for Social Security Reform, Princeton: Princeton University Press, 2008.

12.Retirement age was fifty-five for women and sixty for men, which is almost unimaginable today but tallied with life expectancy at the time. See Louise Fox and Edward Palmer, “Latvian Pension Reform” (= The World Bank, Social Protection Discussion Paper Series 9922). Accessed May 2014; OECD, “Pension Reform in the Baltic Countries” (= Private Pension Series 5). Accessed May 2014.

13.On the Swedish pension reform, see Annika Sundén, “The Swedish Experience with Pension Reform,” Oxford Review on Economic Policy 22 (2006), pp. 133–48.

14.The Estonian pension scheme website is accessible online at Accessed May 2014.

15.See Wolfrum, Rot-Grün, p. 153.

16.On the semantics of the labor market reform and the individual Hartz laws, see Elena Buck and Jana Hönke, “Pioniere der Prekarität—Ostdeutsche als Avantgarde des neuen Arbeitsmarktregimes,” in Rebecca Pates and Maximilian Schochow, eds., Der “Ossi.” Mikropolitische Studien über einen symbolischen Ausländer, Wiesbaden: Springer, 2013, pp. 23–53, here 27.

17.See, e.g., Friedman and Friedman, Free to Choose, pp. 120–26; also the 2002 edition of Friedman’s Capitalism and Freedom, Chicago: University of Chicago Press, 2002, pp. 192–94.

18.Wolfrum, Rot-Grün, p. 545.

19.This was the number receiving additional payments for regular occupations under Hartz IV in 2013; see N. N., “Hartz IV: Aufstocker kommen oft nicht aus Grundsicherung heraus,” Spiegel online 18 July 2013. Accessed May 2014.

20.See Yasmin El-Sharif, “Aufstocker. Callcenter kosten den Staat jährlich 36 Millionen Euro,” Spiegel online 11 March 2013. Accessed May 2014.

21.See James, Europe Reborn, pp. 352–60.

22.On the history of civil society concepts in east-west transfers, see Agnes Arndt, Intellektuelle in der Opposition. Diskurse zur Zivilgesellschaft in der Volksrepublik Polen, Frankfurt am Main: Campus, 2007.

23.See Robert D. Putnam, “Bowling Alone: America’s Declining Social Capital,” Journal of Democracy 6 (1995), pp. 65–78. In 2000, Putnam published a similarly titled book, Bowling Alone: The Collapse and Revival of American Community, New York: Simon & Schuster.

24.Cf. Gerhard Schröder, “Die zivile Bürgergesellschaft. Zur Neubestimmung der Aufgaben von Staat und Gesellschaft,” Neue Gesellschaft 4 (2000), pp. 200–7; also Ulrich Beck, “Mehr Zivilcourage bitte,” Die Zeit 25 May 2000. Accessed May 2014.

25.On social problems in the Mezzogiorno, see also Borgomeo, L’equivoco del Sud, p. 8.

26.This speech is documented on the website Zeit online: Angela Merkel, “Was wir vorhaben, ist ein Befreiungsschlag zur Senkung der Arbeitskosten,” Zeit online 23 July 2003. Accessed May 2014.

27.See Monika Queisser, “Die Rente mit Kapital unterlegen,” Frankfurter Allgemeine Zeitung 24 January 1998; also N. N., “Aktien statt Almosen,” Der Spiegel 3 August 1998. Accessed May 2014. The catchword “bankruptcy” (Bankrott) reflected the contemporary alarmist mood; in a sober light, pension systems based on an intergenerational contract cannot go bankrupt unless the contributors collectively refuse to pay in. The reference to Poland in the Spiegel article is brief.

28.See Katharina Müller, “Vom Staat zum Markt? Rentenreformen in Mittelosteuropa,” Staatswissenschaften und Staatspraxis 9.2 (1998), pp. 163–89.

29.See Markus Schneider, “Warum die Flat Tax sozial ist,” Die Welt 31 August 2005. Accessed May 2013. Also Schwarz, “Vom Siebenschläfer zum Tiger der Karpaten.” Left-liberal and left-wing newspapers were more critical; see Nicola Liebert, “Die Flat Tax ist nur ein Verschiebebahnhof,” Die Tageszeitung 29 November 2005. Accessed May 2014.

30.See especially the writings by Swedish pension expert Edward Palmer, who advised a number of other postcommunist countries as well as the Latvian government and was subsequently made research director of the Swedish social security agency, partly on account of the international recognition he had gained.

31.On discursive globalization and the World Polity theory of John W. Meyer, see, e.g., Georg Krücken and Gili S. Drori, eds., World Society: The Writings of John W. Meyer, New York: Oxford University Press, 2009.

32.See N. N., “Schulden explodieren: Polen konfisziert private Renten-Fonds,” Deutsche Wirtschafts Nachrichten 8 September 2013. Accessed June 2014.

33.See N. N., “‘Zum Kotzen’. Helmut Schmidt wettert gegen Jammer-Ossis,” Spiegel online 11 October 2003. Accessed May 2014.

34.See Wolfgang Engler, Die Ostdeutschen als Avantgarde, Berlin: Aufbau, 2002; also Thomas Kralinski, “Die neuen Ostdeutschen,” Berliner Republik. Das Debattenmagazin 4 (2000). Accessed May 2014.

35.Schröder said this in a speech on the solidarity agreement, which is documented on the website Ruhrpost online; see N. N., “Schröder halt am Solidarpakt II fest,” RP-online 18 April 2004. Accessed May 2014.

36.See Claus-Dieter Steyer, “Schröder auf Osttour: Der Kanzler wirft einen Blick auf die ostdeutsche Landwirtschaft,” Der Tagesspiegel 30 August 2000. Accessed May 2014.

37.Cited from Buck and Hönke, “Pioniere der Prekarität,” p. 40.

38.See a (negative) statement made by the deputy party chairman, Wolfgang Thierse, at an event hosted by the SPD-related Friedrich Ebert Foundation in November 2004: “Das Potenzial des Ostens—wo stehen wir im deutsch-deutschen Prozess?”–2003/4_11_5_thierse.pdf. Accessed May 2014.

39.See Borgomeo, L’equivoco des Sud, pp. 14–23.

Chapter 10. The Roads Not Taken

1.On the internationalist aspect of the revolution in the ČSSR and the cross-border actions in this and the following paragraphs, see Krapfl, Revolution with a Human Face, pp. 57–59; see also Arnold Suppan, “Austria and Its Neighbours in Eastern Europe, 1955–89,” in Wolfgang Mueller, Michael Gehler, and Arnold Suppan, eds., The Revolutions of 1989: A Handbook, Vienna: Verlag der ÖAW, 2014, pp. 419–36.

2.The term “reckoning” (German: “Abrechnung”; Polish: “rozrachunek”) has been consciously chosen over that of “reappraisal” of the past (German: “Aufarbeitung”). History as a rule cannot be profoundly reappraised immediately after the end of a certain regime. The victims’ trauma is too fresh and the perpetrators too preoccupied with evading prosecution, property confiscations, and other sanctions to allow an honest dialog about the past to take place. For example, it took some two decades for West Germans to be able to start “reappraising” the Nazi past. This leads us to the second reason for avoiding the term “reappraisal”: It suggests a questionable parallel between the history of the GDR and that of Nazi Germany. Third, the special status of the former GDR achieved by unification with the Federal Republic of Germany must be taken into account. This allowed an almost complete changeover of elites to take place. All the other former Eastern Bloc countries, like West Germany in the 1950s and ’60s, had the task of transforming erstwhile supporters of dictatorship into good democrats, or at least into compliant fellow travelers.

3.Cf. Jürgen Habermas, “Die nachholende Revolution,” in Habermas, Kleine Politische Schriften VII, Frankfurt am Main: Suhrkamp, 1990, pp. 177–204. An English translation was published some six months later. See Habermas, “What Does Socialism,” pp. 3–21.

4.See Habermas, “What Does Socialism,” p. 5.

5.Ibid., p. 4.

6.See Timothy Garton Ash, “Apres le deluge, nous,” Transit. Europäische Revue 1 (1990), pp. 11–34.

7.“tiefes Tal der Tränen.” Cf. Ralf Dahrendorf, “Übergänge: Politik, Wirtschaft und Freiheit,” Transit. Europäische Revue 1 (1990), pp. 35–47, here 41–42. Polish liberals advanced similar arguments. See Szacki, Liberalism after Communism.

8.See the references to transition (in German: “Übergang”) in East Asian civil society in Dahrendorf, pp. 36–37. In his German-language text, Dahrendorf wrote of “Bürgergesellschaft.”

9.François Furet, “1789–1917, ‘Rückfahrkarte’,” Transit. Europäische Revue 1 (1990), pp. 48–64, here 60. Interestingly, Furet, who died in 1997, had not been a conservative all his life. As a young man, he was a member of the French Communist Party, and later held liberal views for a time.

10.See Furet, “1789–1917, ‘Rückfahrkarte’,” pp. 52, 60–61.

11.Excerpts of films of these two demonstrations can be viewed on YouTube under the Czech titles “První obří demonstrace na Letné” ( and “Druhá obří demonstrace na Letné” ( Both accessed May 2014.

12.See Patočka’s collected works on Comenius: Jan Patočka, Komeniologické studie I, Soubor textů o J. A. Komenském, Texty publikované v letech 1941–1958, edited by Vera Schifferová, Prague: Oikúmené, 1997. On this reception of Patočka, see also Jan-Werner Müller, Das demokratische Zeitalter. Eine politische Ideengeschichte Europas im 20. Jahrhundert, Berlin: Suhrkamp, 2013, pp. 388–89.

13.See, e.g., Václav Havel, Do ruzných stran, Prague: Lidové noviny, 1990. These writings date predominantly from the period before 1989, around the time of Charter 77, and are therefore not to be unequivocally associated with the revolution.

14.For Garton Ash’s criticism of Havel, see “Après le déluge,” p. 14.

15.On the actors of the revolution and their demands, see Krapfl, Revolution with a Human Face, and the Czech-language literature, including Jiří Suk, Labyrintem revoluce. Akteři, zápletky a křižovatky jedné politické krize (Od listopadu 1989 do června 1990), Prague: Prostor, 2003; Milan Otáhal and Miroslav Vaněk, Sto studenských revolucí. Studenti v období pádu komunismu—životpisná vyprávení, Prague: Lidové noviny, 1999.

16.On this debate in Poland, which to some extent referred to an idealized past and a common set of values, see Aleksander Smolar, Tabu i niewinność, Kraków: Universitas, 2010, p. 130.

17.On this legacy of 1989, see ibid., pp. 127–28.

18.See Isaiah Berlin, Liberty: Incorporating Four Essays on Liberty, edited by Henry Hardy, Oxford: Oxford University Press, 2002.

19.See Charles Taylor, The Ethics of Authenticity, Cambridge: Harvard University Press, 1992.

20.With respect to the ČSSR, see Krapfl, Revolution with a Human Face, pp. 74–110; on Poland, see Smolar, Tabu i niewinność, pp. 89–90.

21.Nevertheless, Gaidar, who died in 2009, is revered in Russian business circles to this day. The Gaidar Forum (Гайдаровский форум), which debates problems of the Russian economy, is named in his honor.

22.Rupnik, “1968: The Year of Two Springs.”

23.See OECD, “Gender Wage Gap.” Accessed May 2014. In Hungary, women have more or less achieved equality in terms of pay; in the Czech Republic, Slovakia, and Estonia, they have not.

24.The most positive potential scenario is that China will take the Hungarian path and allow party-political pluralization, or different factions under the umbrella of the Chinese Communist Party. This idea was briefly considered in 2012–13, but overruled for the time being.

25.The original German reads: “Polnische Schwarzhändler, Schmuggler und Ladendiebe in West-Berlin heizen die Ausländerfeindlichkeit unter Einheimischen an.” Cf. N. N., “Arme Teufel,” Der Spiegel 17/1990, pp. 105–7.

26.See N. N., “Österreich. Volles Boot, leeres Hirn,” Der Spiegel 28/1990, p. 122; on the visa requirement, see Joanna Jajdek, “Der mittelbare Nachbar. Österreichvorstellungen in Polen 1970–1995,” in Oliver Rathkolb, Otto M. Maschke, and Stefan August Lütgenau, eds., Mit anderen Augen gesehen. Internationale Perzeptionen Österreichs 1955–1990, Vienna: Böhlau, 2002, pp. 647–76, here 666–67.

27.See Heinz Fassmann and Rainer Münz, Ost-West-Wanderungen in Europa. Rückblick und Ausblick, Vienna: Böhlau, 2000.

28.See Ronald Freudenstein, “Angst essen Seele auf. Die Deutschen und die Osterweiterung der Europäischen Union,” DPI Jahrbuch 12 (2001). Accessed May 2014. For the Stoiber citation, see p. 3.

29.Issen said this on several occasions, including in a comment in 2001 on the imminent expansion of the European Union. He was subsequently quoted in the Bundestag; one SPD member of parliament echoed his visions of doom; see Deutscher Bundestag, Stenographischer Bericht. 99. Sitzung, 13. April 2000, p. 31. Accessed May 2014.

30.See N. N., “Stoiber will EU-Beitrittsverträge nachbessern,” Handelsblatt 23 April 2005. Accessed May 2014.

31.See Manuel Bewarder, “‘Wer betrügt, der fliegt’—die CSU im Faktencheck,” Die Welt 31 December 2013. Accessed May 2014.

32.“Je reste en Pologne. Venez nombreux”; see Kornelia Kończal,“Vom Schreckgespenst zum Dressman. Le plombier polonais und die Macht der Imagination,” in Kiran Patel, Veronika Lipphardt, and Lorraine Bluche, eds., Der Europäer—ein Konstrukt. Wissensbestände und Diskurse, Göttingen: Wallstein, 2008, pp. 299–325.

33.See N. N., “Irak-Krieg: Chirac knöpft sich die EU-Kandidaten vor,” Der Spiegel 17 February 2003. Accessed May 2014.

34.On relations between the European Union and Ukraine at the time, see Serhii Yekelczyk and Oliver Schmidtke, eds., Europe’s Last Frontier? Belarus, Moldova, and Ukraine between Russia and the European Union. New York: Palgrave, 2008.

35.“nur untereinander verwandte kulturelle Entwicklung durchlaufen”; “russischen Kulturkreis.” See Helmut Schmidt, Die Selbstbehauptung Europas. Perspektiven für das 21. Jahrhundert, Munich: DVA, 2000. The citations are from the excerpts of the book that were published in the newspaper Die Zeit; see Helmut Schmidt, “Wer nicht zu Europa gehört,” Die Zeit 5 October 2000, especially p. 2. Accessed May 2014.

36.Shortly before the “referendum” in Crimea in March 2014 (which occurred in violation of international law), the Berlin-based historian Jörg Baberowski questioned whether Ukraine was a nation at all. He described the country as a “child of the Soviet nationalities’ policy” and claimed that it had been condemned to become a nation in 1991; see Jörg Baberowski, “Geschichte der Ukraine. Zwischen den Imperien,” Die Zeit 13 March 2014. Accessed May 2014. Following Russia’s annexation of Crimea and initial destabilization of East Ukraine, the editor-in-chief of Die Zeit’s arts pages, Jens Jessen, topped this, portraying Ukraine as the result of German warfare in the First and Second World Wars; see Jens Jessen, “Krimkrise. Teufelspakt für die Ukraine,” Die Zeit 28 March 2014. Accessed May 2014. For those interested in the formation of the Ukrainian nation, the following is a recommended read: Andreas Kappeler, ed., Die Ukraine. Prozesse der Nationsbildung, Cologne: Böhlau, 2011. A remarkable feature of the debate over Ukraine is the number of German “experts” offering opinions who have never before given the country serious consideration and do not even understand the Ukrainian language.

37.On this speech and the further progress of the state visit, see Johannes Leithäuser, “Dank, Hoffnung und die Bitte um Visa-Erleichterung,” Frankfurter Allgemeine Zeitung 9 March 2005. Accessed May 2014.

38.See Commission of the European Communities, “Wider Europe—Neighbourhood: A New Framework for Relations with Our Eastern and Southern Neighbours” (11 March 2003). Accessed May 2014. See for background information Richard G. Whitman and Stefan Wolff, eds., European Neighbourhood Policy in Perspective: Context, Implementation and Impact, London: Palgrave Macmillan, 2010; Elena A. Korosteleva, The European Union and Its Eastern Neighbours: Towards a More Ambitious Partnership?, London: Routledge, 2012.

39.See Jurii Durkot, “Trügerische Normalität,” Die Tageszeitung 5 May 2014.!137856/. Accessed May 2014.

40.See Josef Zisels, et al., “Open Letter of Ukrainian Jews to Russian Federation President Vladimir Putin.” Accessed May 2014.

41.See Andrei Lipskii, “Predstavlayetsia pravil’niim initsirovat’ prisoyedenenie vostochnykh oblastei Ukraini k Rossii,” Novaya Gazeta 25 February 2015. Accessed March 2015.

42.On the political semantics of these terms, see Anna Veronika Wendland, “Hilflos im Dunkeln. ‘Experten’ in der Ukraine-Krise: eine Polemik,” Osteuropa 9–10 (2014), pp. 13–34.

43.This address of 25 April 2004 is published in Russian on the website of the Russian president at: Accessed May 2014. Putin spoke of millions of Russians who are now forced to live outside Russian territory. For an analysis of Russian politics, see also the blog “Ukraine in Focus” on the website of the IWM in Vienna; specifically the article by Ivan Krastev, “Putin’s World.” Accessed May 2014.

44.See the various articles on the topic by Mykola Riabchuk on the blog “Ukraine in Focus.”

45.See Andrew E. Kramer, “Ukraine Turns to Its Oligarchs for Political Help.” New York Times 2 March 2014. Accessed May 2014.

46.On Ukraine’s various oligarchs, see Serhii Leshchenko, “Hinter den Kulissen. Eine Typologie der ukrainischen Oligarchen,” Transit. Europäische Revue 45 (2014), pp. 102–17.

47.This is the conclusion drawn in 2001 by the two American authors of an IMF-commissioned comparison of paths of transformation. See Keane and Prasad, “Poland: Inequality, Transfers, and Growth in Transition.”

48.See Shleifer and Treisman, “Normal Countries.” The authors were obviously unaware that the term “normal” has been tainted by the use of the word “normalization” to denote the process instituted in the ČSSR after the invasion of Warsaw Pact troops.

49.See N. N., “Reforms Are the Best Antidote to Exogenous Shocks Confronting Ukraine.” Accessed April 2015.

50.On Italy, for example, see Marcon and Pianta, Sbilanciamo L’economia.

51.See “Protest gegen Umweltverschmutzung. Wütende Chinesen stoppen Industrieprojekt,” Spiegel online 28 July 2012. Accessed May 2014.

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