(Former) Informal Networks as a Reflection of Informal Institutions in East European Transitional Societies: Legacy or Opportunism?

Only recently has the influence of culture on economic development been increasingly discussed among theoretical economists. Besides observing culture through cultural traditions inherited from ancestors, current social interactions are also considered as an influential factor. Over a long period of time, the research on East European transitional societies has been focused on formal institutions. Throughout that period, informal networks, many of which originated from the previous socio-political system, have mostly strengthened their position in the society and gained power in the formal structures. They helped in building the new capitalist states and therewith had positive effects by speeding up the transition process. Yet, in medium and long term, their activities typically resulted in state capture.