New private enterprises in three transitional contexts: Central Europe, the former Soviet Union and China

This article compares the new private businesses that have been created in three transitional (from communism) contexts: Central Europe (Hungary, Pola nd and Slovakia), the former Soviet Union (Armenia, Georgia and Ukraine) an d Asia (China). There have been major differences among these world regions in the contexts created for the development of new enterprises: in the pac e of change, the extent to which stare control and the rule of law have bee n maintained or created, whether there has been economic growth, decline or stagnation, the degrees of political continuity and the length of the comm unist period. Despite the contrasting contexts, there have been many simila rities in the characteristics of new private businesses, but alongside some major differences: in the types of business with which beginners have usua lly commenced the match with their specialities, whether self-employment ha s normally been a full-time or part-time occupation, whether or not the sta re has been perceived as basically supportive, in uses of the second econom ies and bribery, and whether sole proprietorship or partnership has been th e non,tal initial business arrangement. It is concluded that there are just two essential conditions for successful transition (as regards the develop ment of small business sectors): economic growth and the rule of law. There after everything seems to depend on creating a favourable configuration of conditions which, our evidence suggests, is most likely when countries have maximum scope to plot their own transitional routes. It is argued that imp osing one allegedly correct approach will usually be counter-productive.