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Economic Recovery Linked to Political Reform

© Bryan Johnson

According to a new study released by Freedom House the countries in the former Soviet Union and Eastern Europe face the prospects of economic stagnation and steep decline unless they reform their political systems and curb corruption. According to Freedom House, "Countries that have failed to reform their political as well as economic systems are going to be hardest hit by the economic turmoil affecting emerging markets."

Freedom House recently released their annual "Nations in Transit 1998" review. Among the studies principle findings:

1) former Communist countries which have made the most progress towards political democracy have also enjoyed the most success in economic reform and have experienced the highest rates of economic growth;

2) Countries which were most resistant to political and economic change registered a decline in their economic output;

3) Countries that pursued inconsistent policies in political and economic reform stagnated or grew at low rates in 1997 and have suffered severe setbacks in the economic turmoil of 1998;

4) The seven countries that were judged to be the region's least corrupt enjoyed the highest growth rates. By contrast, countries with a higher degree of corruption stagnated with average growth rates of below two percent, after a prolonged period of economic decline;

5) Most countries of formerly Communist Central and Eastern Europe have made important strides towards both political and economic reform. The principle exceptions are Yugoslavia and countries that have seceded from former Yugoslav Federal Republic;

6) Of the countries of the former Soviet Union, only three Baltic states of Estonia, Latvia, and Lithuania have achieved sustained progress in both democratic and economic reform that would allow them to be considered stable market democracies;

7) Economic reform has been seriously stalled in those countries where large Communist or leftist parties remain a major force in political life.

from, "Nations in Transit 1998," Freedom House, New York, 1998

Freedom House ranks the countries of the former Soviet Union and Eastern Europe in to three broad political categories: Consolidated Democracies, 2) Transitional Governments, and 3) Consolidated Autocracies. Likewise, Freedom House categorizes the same countries into three broad economic categories: 1) Consolidated Market, 2) Transitional Economies, and 3) Consolidated Stastist.

Here are the rankings from most free to least free:

DEMOCRACY RANKINGS:

Consolidated Democracies:

Poland
Czech Republic
Hungary
Lithuania
Slovenia
Estonia
Latvia

Transitional Governments:

Mongolia
Bulgaria
Slovakia
Romania
Macedonia
Moldova
Russia
Croatia
Ukraine
Georgia
Kyrgyz Rep.
Albania
Armenia
Yugoslavia
Kazakhstan
Azerbaijan

Consolidated Autocracies:

Tajikistan
Belarus
Bosnia
Uzbekistan
Turkmenistan

ECONOMIC RANKINGS

Consolidated Market

Hungary
Poland
Czech Republic
Estonia
Slovenia
Latvia
Lithuania

Transitional Economies

Slovakia
Kyrgyz Rep.
Croatia
Russia
Georgia
Mongolia
Armenia
Bulgaria
Moldova
Albania
Kazakhstan
Romania
Macedonia
Ukraine
Yugoslavia
Azerbaijan

Consolidated Statist:

Tajikistan
Bosnia
Belarus
Uzbekistan
Turkmenistan

Copies of this study can be obtained from:

Freedom House
120 Wall Street
New York, NY 10005

(212) 514-8040

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