Entrepreneurship in Post-Socialist Economies

Following the disintegration of the Soviet Union in December 1991, the former Soviet republics and many other Eastern European nations began their transition from socialism to capitalism. Private sector entrepreneurship, an activity that had been illegal for decades, not only became legal but it also became essential for the creation of wealth and economic progress in these countries. In this paper we examine the rates of entrepreneurial activity in these post-socialist economies, and attempt to uncover the policies and institutions that appear to be the most highly correlated with a country’s success (or failure) in promoting entrepreneurial activity. JEL Classifications: E60, H10, P20 *The authors would like to thank Ronald Balvers, Stratford Douglas, George Hammond and William Trumbull for helpful comments and suggestions.