Building Business in Post-Communist Russia, Eastern Europe, and Eurasia

Book excerpt: Prior to 1989, the communist countries of Eastern Europe and the USSR lacked genuine employer and industry associations. After the collapse of communism, industry associations mushroomed throughout the region. Duvanova argues that abusive regulatory regimes discourage the formation of business associations and poor regulatory enforcement tends to encourage associational membership growth. Academic research often treats special interest groups as vehicles of protectionism and non-productive collusion. This book challenges this perspective with evidence of market-friendly activities by industry associations and their benign influence on patterns of public governance. Careful analysis of cross-national quantitative data spanning more than 25 countries, and qualitative examination of business associations in Russia, Ukraine, Kazakhstan and Croatia, shows that postcommunist business associations function as substitutes for state and private mechanisms of economic governance. These arguments and empirical findings put the long-standing issues of economic regulations, public goods and collective action in a new theoretical perspective.