The first step is to identify precisely what happened in the 10 years after the post-Soviet states became independent, i.e. to identify the variation in institutional choice. As discussed briefly in Chapter 1, the first post-Soviet decade brought marked differences in the institutions countries selected or created to manage their economic relations with other states, leading to three distinct international trajectories among countries in the region. One course was oriented to the pursuit of global multilateral liberalism – or nondiscriminatory and freer trade – exemplified by membership in the World Trade Organization. A second path led toward regionalism, or the active participation in economic institutions that privileged trade and economic ties among the former Soviet republics and sustained barriers to exchange with the rest of the world. The third road was toward autarky, or the reliance on national rather than international institutions for managing international economic exchange and the general closure of the economy through high tariffs, inconvertible currencies, or other restrictions.

Each of these institutional alternatives – the WTO, the CIS, and national autarky – entailed the adoption of a set of rules that significantly influenced international economic interaction and exchange, including rules governing the treatment of foreign enterprises, currency convertibility, the use of subsidiesm, and other aspects of the relationship between business and the state. Moreover, each alternative required that authority be allocated to a different set of decision-making institutions for establishing new sets of rules and standards related to international economic relations.