Market Liberalisation and Sustainability in Transition: Turning Points and Trends in Central and Eastern Europe

Abstract

This chapter aims to assess the impact of radical reforms on the sustainability of the transformation of these Central and Eastern European (CEE) countries to civic societies with market economies. Sustainability of transformation is measured by proxy by the achieved progress in sustainable development, defined as development that secures meeting the basic - economic, social and environmental - needs of contemporary generations without jeopardising the needs of future generations. The chapter investigates, for the CEE countries, the impact of liberalisation and other reforms on environmental pressure holding incomes constant utilising an augmented environmental Kuznets curve (EKC) framework. The radical reforms encompass three main components - market liberalisation, macro-economic stabilisation and institutional reforms. Market liberalisation is one of the more controversial reforms and also a symbol of radical change. Regulatory structures and investments are also needed to adjust for externalities and provide more environmentally friendly technologies.