From triumph to crisis: Neoliberal economic reform in postcommunist countries

AuthorEVA Zemandl
Published date01 December 2018
Date01 December 2018
From triumph to crisis: Neoliberal economic
reform in postcommunist countries
Hilary Appel and Mitchell A. Orenstein
Cambridge University Press, 2018, 254 pp., £22.49 (pb), ISBN: 9781108435055
In their highly topical volume, Appel and Orenstein provide us with an empirically comprehensive and theoretically
convincing narrative of neoliberalisms rise and fall in postcommunist European and Eurasian countries (PCEECs). At
no time in our contemporary history is such an undertaking more relevant, critical, and illuminating. Why did these
transition countries become and continue to be model students of neoliberal reform? Why and how were PCEECs
able to persevere and even surpass expectations in their pursuit of neoliberalism? How did the global financial crisis
(GFC) of 200708 discredit the hegemonic neoliberal advance of the 1990s and 2000s? What can the current trends
in PCEECs tell us about the emerging alternatives for political economy?
These are the questions which Appel and Orenstein aptly tacklein their empirically rich, yet theoretically succinct,
analysis of why the neoliberal momentum prevailed and later cameunder severe pressure. In this often-acknowledged
era of rising populismand nationalism, such a thoroughand credible account (both Appel andOrenstein being acknowl-
edged experts in the regions political economy) helps us to take stock of the recent past to better understand the
emerging future.The PCEECs effectively serve as themost revealing and instructive example of the triumphand crisis
of neoliberalism.
As the authors emphasize from the outset, they appreciate important intraregional differences, but make a plea
for the imperative to see the forest from the trees, as it were. Their point of departure is to challenge the quintessen-
tial assumption of transition theoristswho failed to predict the endurance of neoliberalism and its delayed demise
that radical reforms and shock therapy would inspire mass democratic opposition in a matter of mere months and
years. Instead, opposition was delayed by 20 years. Appel and Orenstein refer to this puzzle as the great unexplained
mystery. They carefully trace the events of neoliberal reform throughout the region, proposing that the key mecha-
nism of postcommunist transition was competitive signallingin the wider context of the global economy. Therein
lies the crux of Appel/Orensteins thesis: transition was not so much a domestic political-economic struggleas tran-
sition theorists otherwise maintainedbut rather was driven by the imperative of reinsertion into the global
PCEECs desperately needed capital and foreign direct investment (FDI) for their radical shift to a capitalist econ-
omy. But they faced unprecedented competition from advanced and other developing competitors in a rapidly glob-
alizing world. The hegemonic ideology (there is no alternative) driving this competition was neoliberalism. Thus,
countries engaged in policy signallingdemonstrating their commitments to inter alia trade liberalization, monetarism,
protection of private property, fiscal prudenceto improve their economic freedomrankings and attract capital. The
most zealous reformers were indeed rewarded with higher EBRD (European Bank for Reconstruction and Develop-
ment) and World Bank rankingsthe costs of not joining the neoliberal club were too high to bear. And as the
authors rightly point out, the domestic elites driving these processes were rewarded with international acclaim and
job opportunities.
DOI: 10.1111/padm.12564
838 © 2018 John Wiley & Sons Ltd Public Administration. 2018;96:838840.

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