The state of the market: The market reform debate and postcommunist diversity

This chapter revisits three interrelated claims made in Problems of Democratic Transition and Consolidation, the magnum opus of Juan J. Linz and Alfred Stepan. These claims were about the links between market reforms, state making, and democratization in the context of postcommunist economic and political transformations. The first of them involved the relationship between market reforms and state making; the second was about the relationship between democracy and (regulatory) state making; and the third was about the proper sequencing of reforms. The arguments Linz and Stepan made were the following: (1) constructing a functioning market economy presupposed state building; (2) nondemocratic ways of building a capable state in Eastern Europe were not an alternative; and (3) the reforms should start with state building under democratic conditions and later build a functioning market economy on these foundations.