Montenegrin Journal of Economics

Institutional Nihilism Of The Post-Socialist Transition

Veselin Draskovic and Mimo Draskovic

2012, vol. 8, no. 2, p. 191-206

Private initiative in an environment of well protected property rights and a good legal system, high quality performance of institutions, clear rules of the game, consensus building capacity of the society regarding the importance of economic freedom can bring in significant differences in economic development between particular countries. During the period of the post-socialism transition, the whole system of inhibiting institutional and other factors has caused the disfunctional conglomerate system. The effect was synergetic, destructive, and anti-development. Two decades of intense crisis, with all the accompanying events, has not been sufficient warning to holders of (vulgarised neoliberal) economic policy in the post-socialism states that something is wrong and that the antidevelopment model ultimately needs to be changed. This paper discusses the causes and conditions that have disabled the pluralistic and even monistic acting of economic institutes in the practice of transitional countries and have led to their objective substitution by the quasi-institutes and meta-institutes of a sociopathological nature. It emphasizes the primary significance of institutionalization for economic policy, as well as the negative effect of pseudo-institutes on economic policy and the valorisation of economic resources. In addition, the article provides evidence that monistic pseudo-market reforms in the period of post-socialist transition have not succeeded in compensating for a vast institutional vacuum, and that they have even led to its spreading and turning into a quasi-institutionalization, and institutional nihilism. The paper explains that the institute of civil society as an instrument of people protection from the government doesn't work universally. It's denied by variety of national, corporate and informal groups ("elites"), which are superior in wealth and power and limiting the individuals. Uncontrolled power centers abuse Institute of state regulation and, paradoxically and ironically, preach and conduct marauding ideology of neoliberalism as an institutional monism. We start from the hypothesis that the institutional nihilism is the main cause of unsuccessful postsocial transition and anti-development and vulgarized neoliberal economic policy. We also start from hyphotesis that the neoliberal myth about "mini" state was the interest cover by privileged individuals for their promotion and choice implementation, which reduced the choice of the vast majority of people, and therefore denied their (propagated) economic freedom, competion, private property and entrepreneurship as a mass phenomenon.

suggested citation:

Veselin Draskovic and Mimo Draskovic. "Institutional Nihilism Of The Post-Socialist Transition." Montenegrin Journal of Economics. vol. 8, no. 2, 2012, p. 191-206

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