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Existing literature tends to see informality in Soviet times as a rational response to deficient socialist institutions. In contrast, informality in post-socialist times is explained by the stickiness of culturally embedded norms. This chapter examines the reasons and implications for these inconsistent interpretations of Soviet and post-Soviet informality using the example of Georgia. It suggests that two influential schools of thought on post-Soviet informality, new institutionalist economics and economic sociology, both fail to overcome this theoretical inconsistency. The chapter then elaborates how a Polanyian substantivist approach can overcome identified theoretical pitfalls and establish continuity in interpreting socialist and post-socialist informality. The importance of recalling this seemingly forgotten substantivist approach is illustrated using the changing institutional context and reproduction of informality in the Georgian case.
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- Why Read Informality in a Substantivist Manner? On the Embeddedness of the Soviet Second Economy
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