Wild Capitalism with Political Clout

In Romania, well-connected individuals have dominated the post-communist economic reform program. Change benefited the communist nomenklatura, the managers and directors of state-owned enterprises, the Securitate secret agents, and party leaders. Gradualism, presented as more desirable than rapid “shock therapy” because of its ability to protect workers from greedy capitalists, permitted these individuals to protect their group interests, undermine competition, live off public subsidies, and rely on political connections. As a result, Romania remains one of the most corrupt European Union member states, where corruption and political connections taint the local business culture.