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Latvia's Transition to a Market Economy
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The experience of postcommunist countries during the 1990s has increased the awareness of the centrality of political factors in economic policy-making. The present study focuses on the ways in which Latvia's transition strategy has been shaped in response to political pressures. Latvian evidence in supposed to give hints regarding the sustainability of a market reform under democracy. The treatment of reform strategies is based on the suggestion that economic theorizing always rests on some underlying values. That is to say, ideology encapsulates not only various political points of view but also economic theories. The liberal economic policies pursued by the subsequent Latvian governments are contrasted with the competing proposals put forth by the political challengers. Despite differences in implementation practices, no significant political force demands the revision of the maketization course. The conspicuous centre-gravitation of the political system has rendered a broad coalition possible, which is essential for guaranteeing effective governance when the parliament is fragmented.
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