Structures, Political Cultures and Social Practices
Edited By Christian Giordano and Nicolas Hayoz
Institutionalization of Market Order and Reinstitutionalization of Vruzki (Connections) in Bulgaria
In describing the fundamental characteristics of economic systems, Polanyi theoretically differentiates between basic patterns of economic integration – reciprocity, redistribution and free market exchange (Polanyi, 1957). According to him, reciprocity indicates the relationship between certain symmetrical groups, where mechanisms of social obligation, loyalty and acknowledgement apply. Whereas reciprocity implies symmetry, redistribution is confined to centricity. Here economic interaction is characterized by the dominance of distinct authority. Market exchange ensures the dispersion of economic power among all the participants in the transactions. “The market economy implies a self-regulating system of markets […] capable of organizing the whole of economic life without outside help or interference” (Polanyi, 1957: 48–49). It is the institutionalization of one or other of these integrative forms that guarantees an economy’s unity and stability (Polanyi, 1992: 33).
In Polanyi’s perspective, the institutional transformation of the economic life that was underway after 1989 in Central and Eastern Europe (CEE) can be defined as deinstitutionalization of socialist redistribution and institutionalization of free market exchange. The purpose of this chapter is to examine the above processes using the example of Bulgaria, in the light of the interaction between formal and informal market institutions. In the first part of the chapter this interaction is examined from the theoretical point of view. Formal market institutions are associated with public market order, whereas informal ones are seen as conventions of private market ordering. In the second part of the chapter I investigate the specific characteristics of the institutionalization...
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