Institutional Development in the FSU

An important aspect of the transition from a centrally planned, state-owned economy to a market economy is the emergence of a much wider variety of economic institutions. The economies of the FSU have seen the development of many new forms of business association and new types of markets. Some evidence suggests that a feature of this development has been institutional segmentation. For example, enterprises of a given ownership form are much more likely to trade with enterprises of a similar form. In the newly developing share markets, voucher funds predominately trade with other voucher funds. These patterns suggest that norms that govern exchange tend to be specific to institutional forms. More general norms of economic interaction, crucial for facilitating wide-ranging, market-driven transactions, need further development.


topic Enterprise Restructuring in the FSU