Introduction to “economic development and entrepreneurship in transition economies”

Abstract

The entrepreneurial view is highly westernised, which probably reflects the traditional schools related to Entrepreneurship. Reading an increasing number of books in this field one would think that there is no entrepreneurship beyond the West. It is really not enough to say that different cultures provide different contexts for entrepreneurship, as this would also be too simplified. In fact, entrepreneurial activities are booming in the so-called ‘second or third world’—particularly those economies that are going through transition. However, transition country conditions, including the role of governments and entire institutional contexts, increasingly differ from the western environment. This book, as well as the REDETE conference itself, is an attempt to contribute a better understanding of entrepreneurship in transition economies. According to Stiglitz (1999) the last century has been marked by two great economic experiments. The first one was the outcome of the Soviet Union that started in 1917, and the second was the moving back from centrally planned economies, in which state ownership prevailed, to a market economy where private ownership prevails. Simply put, the process of transition is defined as a manner of moving from a centrally planned to a market oriented economy. A more precise definition is the “reform process in countries that have made the decision to move from a planned socialist system to a private market economy, one in which private ownership predominates and most resources are allocated through markets” (Fischer and Gelb 1991). According to the IMF (2000) and some authors (Fischer and Gelb 1991; Havrylyshyn and Wolf 1999; Žarković 2012) the main aspects of the transition process which more or less prevail in all transition countries are: (1) Liberalization, (2) Macroeconomic stabilization, (3) Privatization and (4) Legal and institutional reforms.