The transformation of post‐communist societies in Central and Eastern Europe and the Former Soviet Union: an economic and ecological sustainability perspective

Since the collapse of Communism in Central and Eastern Europe and the Former Soviet Union, the reform process has been considerably influenced by the neoclassical economic approach to transition. This has heavily emphasized competitive markets and economic liberalization measures per se , often ignoring the establishment of adequate institutional frameworks and resulting in high transition costs and the side‐lining of environmental concerns. Alternative models of market transformations in post‐Communist societies have been forwarded in the literature, though these have been arguably less influential. We explore the role of these economic ideologies in shaping transition paths, with a focus on the Post‐Keynesian economic approach as an alternative to the neoclassical paradigm. We further propose a holistic approach to transition to account for appropriate institutional developments in the area of environmental sustainability. We argue that transition economies need to reconsider their ‘market transformation’ process in order to capitalize on their potential and mark their own contribution to positive shifts in sustainable development paradigms.