Strengths and Weaknesses of 'Weak' Coordination: Economic Institutions, Revealed Comparative Advantages, and Socio-Economic Performance of Mixed Market Economies in Poland and Ukraine

This chapter explores and explains: 'what type of capitalism has emerged in post-communist Europe?' and, ultimately, 'does it work?'. It also critically examines the suitability and applicability of essentially Western neoinstitutionalist theories of comparative capitalism for the study of postcommunist phenomena. On the basis of empirical evidence and comparative analysis of the two largest neighbouring political economies of eastern Europe (Russia apart), it is argued that notwithstanding the world-wide neo-liberalising pressures, the changeable politics of post-communist transformation, and the unstable nature of eastern European institutions, both Polish and Ukrainian national variants of capitalism can be described as mixed- or 'weakly' coordinated market economies. In spite of the prevailing perceptions and popular media praise given to post-communist nations for adopting a deregulated, privatised, liberal type of capitalism, neither Polish nor Ukrainian political economy generally resembles the liberal market-based model. It is contended, however, that despite the apparent system-wise detachment of the eastern European economies of Poland and Ukraine from the ideal types of a coordinated-market economy (CME) and, especially, of a liberal-market economy (LME), the institutional structures of the two postcommunist countries are not necessarily of a 'low-level', 'dysfunctional', or 'suboptimal equilibrium' type.