Date Added: Mar 2010
The transition economies have lower rates of entrepreneurship than are observed in most developed and developing market economies. The difference is even more marked in the countries of the former Soviet Union than those of Central and Eastern Europe. The authors link these differences partly with the legacy of communist planning, which needs to be replaced with formal market-supporting institutions. But many of these developments have now taken place, yet entrepreneurial activity still remains low in many places. To analyze this longer term issue, they highlight the necessarily slow pace of development of new informal institutions and the corresponding social attitudes, notably rebuilding the generalized trust.