The legacy of party‐states for the transformation

Path Dependence and Contractual Relations in Emergent Capitalism: Contrasting State Socialist Legacies and Inter-Firm Cooperation in Hungary and Slovenia

“…This cooperative behaviour would probably have disappeared rapidly with the removal of state funding and privatization, had the characteristics of the Hungarian domestic market not discouraged adversarial behaviours. The high levels of institutional and market uncertainty of the early 1990s did not encourage companies to break up their existing business relations or change the nature of these, as the larger companies created markets for each other, while the majority of smaller firms simply were not in a posi-tion to develop an adversarial relationship with the larger, often monopolistic companies (Csanadi 1997). The state-managed restructuring of the chemical industry in 1993-94 only reinforced this behaviour.…”

“…In these circumstances, the characteristics of the institutional system cannot be expected to be integrated and cohesive: just the opposite. An incoherent, emerging institutional system in which newly emerging groups compete for dominant positions creates a highly fluid, rapidly changing environment in which behaviour is more opportunistic than strategic (Bunce and Csanadi 1993;Csanadi 1997).…”

“…Operating in highly uncertain market and institutional environments, companies might be expected to change the ways they conduct business with each other (Csanadi 1997). In particular, risk-sharing can be expected to decrease unless underpinned by other types of loyalty (e.g.…”