World Politics

Perhaps the most striking feature of the postcommunist transformation is the tremendous variation in rates of economic growth across countries. To account for these differences, this article develops an alternative to the J-curve and partial reform views that currently dominate discussions of the politics of economic reform. This approach treats economic performance as a political struggle between ex-communist and anticommunist factions engaged in a war of attrition over economic and political resources. Using a pooled time-series analysis of economic growth across twenty-five postcommunist countries for the period 1990-98, it finds that political polarization between ex-communist and anticommunist factions has had a devastating effect on economic growth. Where these competing factions have had roughly equal power and have struggled over the economic rules of the game--as in Bulgaria or Ukraine--economic growth has been slow. In contrast, where either ex-communist or anticommunist factions have dominated the political scene--as in Estonia or Uzbekistan--economic performance has been much better. In addition, economic growth has followed the electoral calendar in polarized countries. As elections approach and the odds of a change in economic policy increase, growth rates have plummeted in polarized countries. These findings have implications for studies of the postcommunist transformation, the political business cycle, and the politics of economic reform more generally.