Early stabilization policies played an important part in the financialization of the formerly planned economies. The excess demand narrative, one of the least contested ‘problems’ of post-socialist transformation, structured central banks’ liquidity policies and thus redefined the relationship between the banking sector and (state-owned) production away from the long-term financing of capital investment. The hegemony of this monetarist account is linked to the lead financing role of the International Monetary Fund immediately after the collapse of socialism. To understand how international policy discourse naturalized a set of planned-system features that legitimized standard monetarist policy interventions, the paper seeks to politicize knowledge about socialist economies and embed its production within the institutional politics of international development interventions. If the excess demand narrative is treated as a contested account of the stabilization ‘imperative’, its role as catalyst for the financialization of the banking sector and the shift to impatient finance becomes apparent. An alternative approach to stabilization is further outlined, drawing on institutionalist conceptualizations of the role of money in capitalist production.
Gabor, D. (2012). The road to financialization in Central and Eastern Europe: Revisiting the early policies and politics of stabilizing transition. Review of Political Economy, 24(2), 227-249. https://doi.org/10.1080/09538259.2012.664333