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Geographic Diffusion and the Transformation of the Postcommunist World

Published online by Cambridge University Press:  13 June 2011

Jeffrey S. Kopstein
Affiliation:
University of Colorado, Boulder
David A. Reilly
Affiliation:
University of Colorado, Boulder

Abstract

Since the collapse of communism the states of postcommunist Europe and Asia have defined for themselves, and have had defined for them, two primary tasks: the construction of viable market economies and the establishment of working institutions of representative democracy. The variation in political and economic outcomes in the postcommunist space makes it, without question, the most diverse “region” in the world. What explains the variation? All of the big winners of postcommunism share the trait of being geographically close to the former border of the noncommunist world. Even controlling for cultural differences, historical legacies, and paths of extrication, the spatial effect remains consistent and strong across the universe of postcommunist cases. This suggests the spatially dependent nature of the diffusion of norms, resources, and institutions that are necessary to the construction of political democracies and market economies in the postcommunist era. The authors develop and adduce evidence for the spatial dependence hypothesis, test it against rival hypotheses, and illustrate the relationships at work through three theoretically important case studies.

Type
Research Article
Copyright
Copyright © Trustees of Princeton University 2000

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References

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8 Not all path-dependent explanations are the same, nor do they all go back as far in the past. Whereas Kitschelt's legacies reflect state traditions of bureaucratic rectitude that go back into the nineteenth century, a discussion by Grzegorz Ekiert considers more recent developments, especially the development of civil society and reform communism in the 1970s and 1980s. The problem with this latter legacies explanation, as Ekiert repeatedly acknowledges, is that a major “winner” of postcommu-nism, the Czech Republic, had little civic development in the 1980s and no experience with reform communism. See Ekiert, “Do Legacies Matter? Patterns of Postcommunist Transitions in Eastern Europe” (Paper presented at the conference on Eastern Europe Ten Years after Communism, Harvard University, Cambridge, 1999).

9 Although Fish does not maintain that his initial elections are crucial in determining political (as opposed to economic) outcomes, following Kitschelt, we believe that there is a strong enough logic here to warrant including them in the model. Similarly, although Kitschelt's legacies are meant primarily to explain political outcomes, the logic of their influencing economic reforms is strong enough o t warrant their inclusion in the economics model, too. In fact, they remain the primary determinants of outcomes in all of his work on postcommunism. See Kitschelt, Herbert et al. , Post-Communist Party Systems: Competition, Representation, and Inter-Party Cooperation (Cambridge: Cambridge University Press, 1999), 1941CrossRefGoogle Scholar.

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12 In fact, the Freedom House scores have frequently been used to evaluate the human rights behavior of states. See Stohl, Michael et al. , “State Violation of Human Rights: Issues and Problems of Measurement,” Human Rights Quarterly 8, no. 1 (1986), 592606CrossRefGoogle Scholar.

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14 The matter of missing data for all variables was addressed using one of two methods. If country data revealed a pattern of consistent change (uniform increases or decreases), the prior year's numbers were used for missing years. If country data revealed no clear, uniform pattern, the mean score of all available country data was used. Missing data pose a particular problem for spatial analysis where geographic factors are investigated using a proximity matrix. In these instances, analysis cannot be performed if any data are missing.

15 Fish (fn. 6).

16 The measure of property rights is based on the following criteria: freedom from government influence over the judicial system, commercial code defining contracts, sanctioning of foreign arbitration

17 One alternative to this coding would simply be to substitute “distance from Brussels” as the independent variable. This choice is justifiable on conceptual grounds, since joining the EU and NATO remain important goals for most postcommunist states. Substituting Brussels does not alter the statistical results substantively. Jeffrey Sachs has recently turned to a distance variable in his explanation of post-communist outcomes. Sachs, “Geography and Economic Transition” (Manuscript, Harvard University, Center for International Development, November 1997); idem, “Eastern Europe Reforms: Why the Outcomes Differed So Sharply,” Boston Globe, September 19,1999.

18 Analysis producing the results in Tables 2–4 performed on Intercooled Stata ver. 6.0 using the xtreg function. This command estimates cross-sectional time-series regression models. We employed a population-averaged model to produce a generalized estimating equation that weights the countries by their available data. Standard errors are semirobust and adjusted for clustering around countries. OLS assumptions are relaxed for pooled data, in other words, so that multiple observations for each country are not assumed to be independent of one another.

19 Because the factors from which the bureaucratic rectitude score is constituted are also components of the overall Economic Freedom score, we could not include the bureaucratic rectitude measure as an explanation for Economic Freedom. Kitschelt's corruption score correlates with our bureaucratic rectitude score at .8669, so it is an adequate substitute.

20 Kitschelt's bureaucratic rectitude scores are measured for a single year, rendering a time-series model irrelevant.

21 Even if the coding of Croatia is changed to reflect recent political developments, the relationship between distance and outcomes is significantly diluted by Belarus's and Mongolia's outlier status.

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23 This should come as no surprise to students of Eastern Europe who are familiar with the contagion effect during the revolutions of 1989. See especially Ash, Timothy Garton, The Magic Lantern: The Revolutions of '89 Witnessed in Warsaw, Budapest, and Prague (New York: Random House, 1990)Google Scholar.

24 As Strang and Soule (fn. 22) note: “Perhaps the most common finding in diffusion research is that spatially proximate actors influence each other. … Where network relations are not mapped directly, proximity often provides the best summary of the likelihood of mutual awareness and interdependence” (p. 275). An operationalization of this dynamic is Boulding's loss-of-strength gradient. See Boulding, Kenneth E., Conflict and Defense:A General Theory (New York: Harper, 1963)Google Scholar.

25 One of Stalin's strategies for establishing absolute power was the systematic monopolization of communication channels within the Soviet Union and, after World War II, in Eastern Europe. His control over all facets of the media not only facilitated the spread of communist ideology but also limited the possibility of undesirable interactions.

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27 Most and Starr's research presents the Opportunity/Willingness framework, which to some extent corresponds to our stocks and flows. See Most, Benjamin A. and Starr, Harvey, Inquiry, Logic, and International Politics (Columbia: University of South Carolina Press, 1989)Google Scholar. However, flows in our model involve more than just willingness. The capacity of states is important for determining the extent of interaction and exchange of resources and ideas. Although we admit that this leads to a blurring of the line between stocks and flows, we expect that any operationalization of flows is likely to overlap with stocks.

28 It could be argued that some of these measures, such as the number of televisions or newspaper circulation, reflect modernization rather than the diffusion of information. This is precisely why we developed a composite index—our intent is to capture a variety of sources that could contribute to diffusionary processes of reform. Furthermore, most of our indicators have been frequently cited as tools of interaction in diffusion studies. Newspapers, television, and the mass media in general have been studied extensively as mechanisms of diffusion. See, for example, Spilerman, S., “The Causes of Racial Disturbances: A Comparison of Alternative Explanations,” American Sociological Review 354 (1970)Google Scholar; Oberschall, A., “The 1960s Sitins: Protest Diffusion and Movement Takeoff,” Research in Social Movements, Conflict and Change 11 (1989), 3133Google Scholar; Koopmans, R., “The Dynamics of Protest Waves: West Germany, 1965 to 1989,” American Sociological Review 58 (1993)CrossRefGoogle Scholar. Foreign direct investment has been identified as an important channel for the diffusion of ideas and information. See, for example, Barrell, Ray and Pain, Nigel, “Foreign Direct Investment, Technological Change, and Economic Growth within Europe,” Economic Journal 107, no. 445 (1997)CrossRefGoogle Scholar. Trade is also recognized as a source of diffusing ideas. See, for example, Eaton, Jonathon and Kortum, Samuel S., “International Technology Diffusion: Theory and Measurement,” International Economic Review 40, no. 3 (1999)CrossRefGoogle Scholar. The telephone is a mechanism of within- and between-group information exchange and seems an obvious indicator for our purposes. Not only is tourism a means of communication, but it also provides a means by which individuals can compare their own political and economic circumstances to those of others.

29 Scores are assigned in such a manner as to provide for the most even distribution of cases across the 1–5 categories.

30 The lag between openness measures (1991–96) and the dependent variables of political level (1993–98) and economic reform (1995–99) is intentional. Our expectation is that interaction will influence political and economic behavior over time. Although there may be some immediate effects, we expect that a period of three to four years is most likely to capture the learning and implementation processes that would result from new information.

31 See, for example, O'Loughlin, John, Flint, Colin, Anselin, Luc, “The Geography of the Nazi Vote: Context, Confession, and Class in the Reichstag Election of 1930,” Annals of the Association of American Geographers 84, no. 2 (1994)CrossRefGoogle Scholar; Johnston, R. J., A Question of Place (Oxford: Basil Blackwell, 1991)Google Scholar; Agnew, John, Place and Politics: The Geographical Mediation of State and Society (Boston: Allen and Unwin, 1987)Google Scholar.

32 O'Loughlin, Flint, and Anselin (fn. 31), 359.

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34 Gi* statistics and other local indicators of spatial association are explained in Anselin (fn. 33).

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38 In a similar vein Vladimir Popov has recently argued that policy choices cannot account for variation in the recessions in the postcommunist world between 1990 and 1993. Popov, “Explaining the Magnitude of Transformational Recession” (Manuscript, Department of Economics, Queens University, Canada, 1999).

39 The logic of EU enlargement, one based mostly on a standard of geographical contiguity and proximity, is a topic that remains mostly unexplored, due principally to the cryptopolitical nature of most discussions of the matter among policymakers. Such an explanation, of course, represents a departure from a purely structuralist approach to diffusion, in that EU and NATO decisions to admit particular countries is itself an element of spatial context, and these decisions were influenced by a whole range of considerations, not only strategic but also cultural, of where EU members consider Europe's boundaries properly to lie and who should be a member of “Europe.” If culture is to reenter the picture in our spatial diffusion analysis, we suspect that this is the proper place for it.

40 Of course, some countries in this group have restructured their polities and economies more than others. Hungary and Poland, for example, have arguably restructured more than the Czech Republic and Slovenia. In fact, an alternative construction of this figure as a scatter plot could have shown the gradations of variation in location and policy. We have chosen the two-by-two for clarity of presentation.

41 Between 1989 and 1998 Hungary received the largest share of FDI by far in the formerly communist world. In second and third place came Poland and the Czech Republic. Coolidge, Jacqueline, “The Art of Attracting Foreign Direct Investment in Transition Economies,” Transition 10, no. 5 (1999), 5Google Scholar.

42 Jacoby, Wade, “Priest and Penitent: The European Union as a Force in the Domestic Politics of Eastern Europe,” East European Constitutional Review 8, no. 1 (1999), 6267Google Scholar. In March 1998 the EU formalized what was already widely known, that there would be two tiers of accession candidates. The Czech Republic, Poland, Hungary, Estonia, and Slovenia are in the first group for accession, and Bulgaria, Slovakia, Latvia, Lithuania, and Romania are in the second group. Since then, EU officials have alternated between an admit-each-when-it-is-ready and an admit-them-in-groups approach.

43 Tokes, Rudolf, “Party Politics and Participation in Postcommunist Hungary,” in Dawisha, Karen and Parrott, Bruce, eds., The Consolidation of Democracy in East-Central Europe (Cambridge: Cambridge University Press, 1997)Google Scholar; Kovrig, Bennett, “European Integration,” in Braun, Aurel and Barany, Zoltan, eds., Dilemmas of Transition: The Hungarian Experience (Lanham, Md.: Rowman and Littlefield, 1999)Google Scholar; Atttila Agh, “Die neuen politischen Eliten in Mittelosteuropa,” in Hellmut Wollmann, Helmut Wiesenthal, and Frank Bönker, eds., Transformation sozialistischer Gesellschaften: Am Ende des Anfangs (Opladen: Westdeutscherverlag).

44 Jacoby (fn. 42). In Hungary's June 1999 parliamentary session, for example, 180 laws were passed, 152 of which were not subject to any debate because they were part of the acquis communautaire, see Magyar Nemzet, June 19,1999. We thank Andrew Janos for providing us with this information.

45 Franzmeyer, Fritz, “Wirtschaftliche Voraussetzungen, Perspektiven und Folgen einer Osterweitung der Europäische Union,” Ost-Europa-Wirtschaft 22, no. 2 (1999), 146Google Scholar. One Brussels-based Bulgarian diplomat involved in negotiations on EU accession recently spoke openly about the process: “These are not classic negotiations, you are not sitting there bargaining in the true sense of the word. You are an applicant, and the rules of the club are as follows, so basically if you are aspiring to become a member of this particular club, you will have to accept the rules that are being laid out for you.” And on the acquis: “On the bulk of the rules, or the so-called acquis communautaire, there won't be any bargaining, simply we must find ways to incorporate them in our legislation and to also effectively implement them in our daily work in Bulgaria, and not argue whether we accept them or not.” Quoted in O'Rourke, Breffni, “EU Enlargement Negotiations: A Difficult Path to Tread,” RFE/RL Newsline 4, no. 56, pt. 2, March 20, 2000Google Scholar.

46 Paul Marer, “Economic Transformation, 1990–1998,” in Braun and Barany (fn. 43). There is, of course, nothing inevitable about EU enlargement. It follows that outright abandonment of enlargement by the member states of the EU would have a detrimental effect on the transformation of Central Europe, but even this unlikely outcome would not alter the fundamental institutional changes that have already occurred in preparation for EU accession. But even if we assume that the best-prepared postcommunist candidates for accession are admitted “on schedule,” by 2003 or 2005, the whole operation will most likely proceed in fits and starts, as in earlier periods of European institutional history, with periods of euphoria followed by bouts of pessimism.

47 Frank, Tibor, “Nation, National Minorities, and Nationalism in Twentieth Century Hungary,” in Sugar, Peter F., ed., Eastern European Nationalism in the Twentieth Century (Washington D.C.: American University Press, 1995)Google Scholar; Daniel Nelson, “Regional Security and Ethnic Minorities,” in Braun and Barany (fn. 43).

48 Croatia, a country in the same quadrant, followed much the same trajectory as Slovakia in the 1990s, including a rejection of dictatorship at the end of the decade and a renewed attempt to conform to the expectations of European institutions.

49 Sharon Wolchik, “Democratization and Political Participation in Slovakia,” in Dawisha and Parrott (fn. 43), 244.

50 Kotrba, Josef and Svejnar, Jan, “Rapid and Multifaceted Privatization: Experience of the Czech and Slovak Republics,” Mod-Most 4, no. 2 (1994)Google Scholar.

51 Having come to power on a platform that promised a less painful, “Slovak path” to the economic transition, Meciar's economic policies produced mixed results in the short run and very poor results in the long run. The Slovak economy's main weakness is its industrial core, which came into existence almost entirely during the communist era and was designed to support a much reduced (and now truncated) Czechoslovak military-industrial complex.

52 Christopher Walker, “Slovakia: Return to Europe Questionable,” RFE/RL Weekly Report, September 25,1998, http://www.rferl.org/nca/features/1998/09/RRU.980925133407.html.

53 Fish, M. Steven, “The End of MeČiarism,” East European Constitutional Review 8, no. 1 (1999)Google Scholar.

54 Butora, Martin, Meseznikov, Grigorij, and Butorova, Zora, “Overcoming Illiberaism: Slovakia's 1998 Elections,” in Butora, Martin et al. , eds., The 1998 Parliamentary Elections and Democratic Rebirth of Slovakia (Bratislava: Institute of Public Affairs, 1999)Google Scholar.

55 After an initial drop to $182 million of FDI in 1995 from $203 million the year before, FDI in Slovakia doubled its level over the next three years; see Coolidge (fn. 41), 5.

56 See especially the annual reports of the National Bank of Slovakia, an institution that retained a remarkable degree of autonomy under Meciar; http://www.nbs.sk/INDEXA.HTM. It is now apparent that part of the secret of Meciar's economic success was connected with huge, debt-driven infrastructure programs undertaken in 1996 and 1997.

57 “Slovak NGOs had their natural partners abroad, and they exchanged skills, technical advice, and moral encouragement with them”; Butora, Meseznikov, and Butorova (fn. 54), 19.

58 Fish (fn. 53), 50. Fish maintains that “the very birth and persistence of Meciarism show that geography is not destiny” but concedes that location may well have mattered in the longer run.

59 In an attempt to take advantage of an opposition that was fragmented into a number of competing parties, he did change the electoral rules just before the 1998 elections so that it would have been impossible for the opposition to win had they not coalesced into a single party.

60 Jolyon Naegele, “Slovakia: Democratic Opposition Has Chance to Change Policies,” RFE/RL Weekly Report, September 28,1998, http://www.rferl.org/nca/features/1998/09/RRU.980928134909.html.

61 As Butora, Meseznikov, and Butorova (fn. 54) note in their account of the 1998 election: “The West's open emphasis on the need for democratization was of great importance in shaping public opinion. Research data repeatedly showed that a substantial segment of the population considered the criticism from abroad to be justified and saw democratization as a prerequisite for Slovakia's integration into Euro-Atlantic structures. The global democratic community had shown its power.”

62 Having come to power in 1998, the new liberal coalition found the treasury almost empty, depleted by years of fiscal profligacy and political corruption. Confronting this legacy required fiscal austerity measures, which led to tensions within the coalition and renewed support for the populists. On Meciar's economic legacy, see Juzyca, Euen, Jakoby, Marek, and Pazitny, Peter, “The Economy of the Slovak Republic,” in Meseznikov, Grigorij, Ivantysyn, Michal, and Nicholson, Tom, eds., Slovakia 1998–1999: A Global Report on the State of Society (Bratislava: Institute for Public Affairs, 1999)Google Scholar.

63 Huskey, Eugene, “Kyrgyzstan: The Fate of Political Liberalization,” in Dawisha, Karen and Parrott, Bruce, eds., Conflict, Cleavage, and Change in Central Asia and the Caucasus (Cambridge: Cambridge University Press, 1997)Google Scholar.

64 Eugene Huskey, “Kyrgyzstan Leaves the Ruble Zone,” RFE/RL Research Report, September 3, 1993,38–43.

65 Although Slovakia and Kyrgyzstan both have about five million inhabitants, in 1998 Kyrgyzstan received $55 million of FDI while Slovakia received almost seven times that much, even though the two countries' rankings in the various economic freedom indexes were not so far apart. See Coolidge (fn.41).

66 By 1999, for example, the son-in-law of President Akaev was reported to have gained control of almost all of the energy, transport, communications, and alcohol industries, as well as its airline. See Moskovski Komsomolets, December 9,1999, 3.

67 Anderson, John, Kyrgyzstan: CentralAsia's Island of Democracy? (Amsterdam: Harwood Academic Publishers, 1999)Google Scholar.

68 Peter Rutland, “Count Them in or Count Them Out? Post-Socialist Transition and the Globalization Debate” (Paper presented at the American Association for the Advancement of Slavic Studies, St. Louis, Mo., 1999).

69 Eugene Huskey, “National Identity from Scratch: Defining Kyrgyzstan's Role in World Affairs” (Manuscript, Department of Political Science, Stetson University, July 1999).

70 Ibid. In 1998, for example, Uzbekistan's president Karimov criticized Kyrgyzstan's dreams of Westernizing its economy. “Kyrgyzstan,” Karimov admonished the Kyrygz leadership, “is tied more closely to the IMF, which is your ‘Daddy’ and supervises everything.” “O druzhbe, bez kotoroi ne prozhit',” Slovo Kyrgyzstana, December 2,1998, 2, cited in Huskey.

71 Bruce Pannier, “Central Asia: Concern Grows over Possibility of Trade War,” RFE/RL Weekly Re-fort, February 16,1999.

72 Adding to Kyrgyzstan's woes (but predictable given its location) were sporadic but heavily armed skirmishes during the second half of the 1990s between government forces and foreign Islamic guerrillas who had crossed the border in search of a secure operating base.

73 “Human Rights Watch on Kyrgyzstan,” RFE/RL Daily report on Kyrgyzstan, December 10, 1999, http://www.rferl.org/bd/ky/reports/today.html.

74 O'Loughlin, John and Anselin, Luc, “Geography of International Conflict and Cooperation: Theory and Methods,” in Ward, Michael D., ed., The New Geopolitics (Philadlphia: Gordon and Breach Science Publishers, 1992)Google Scholar.

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