Most post-communist states suffered severe recessions, while rapid economic growth followed where communist parties survived to implement market reform. These differences have been widely attributed to the varied economic starting points of these countries or to policy choices and evolving political circumstances as market economies were built. We argue, instead, that the origins of these differences are to be found earlier in a country’s political history, specifically in the pattern of decline in communist party organizations. The more prolonged and extensive the decline of communist party capacity prior to regime change, the more that ownership claims became unclear and unenforceable, subsequently undermining contract enforcement, taxation, and state capacity. A time series analysis of 31 transitional economies demonstrates the impact of communist party decline on the relative severity of initial recessions, net of initial economic circumstances, policy choices, and regime characteristics. The impact of party decline was large and immediate, but diminished steadily thereafter.
Andrew Walder is Professor of Sociology at Stanford University and is also a Senior Fellow in Stanford’s Freeman-Spogli Institute of International Studies. He has published on social stratification, social mobility, and political conflict in communist and post-communist states, and is in the middle of a multi-year project to analyze patterns of political conflict in China from 1966 to 1971. He is the author of Fractured Rebellion: The Beijing Red Guard Movement (Harvard University Press, 2009).
Andrew Isaacson is a Ph.D. candidate in the Department of Sociology at Stanford University.