Abstract

On the aftermath of the dissolution of the Soviet Union, the newly independent republics had to face a choice over which economic system should be adopted, and how to implement the transition from a planned economy to market economy system.

The aim of this paper is to provide a brief overview of the transition process in the cases of Estonia and Lithuania, two countries with a similar history but with significant differences on the social, economic and cultural background. The two countries undertook two different sets of transition reforms: while the first country chose the path of the so called “shock therapy”, Lithuania opted for a more gradual transition. The paper will bring a comparative analysis of the two transitions and of its different outcomes after approxi-mately 25 years of transition.

Keywords: transition, post-soviet, Lithuania, Estonia, shock therapy.

JEL Classification: N.

Cite as: Pilia, G. (2017). Estonia and Lithuania in transition: A compared analysis of the change and its costs and benefits. Business Ethics and Leadership, 1(2), 12-19. Doi: 10.21272/bel.1(2).12-19.2017

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