FINANCIALIZATION IN TRANSITION: A CRITICAL ANALYSIS FROM THE PERSPECTIVE OF INTERNATIONAL POLITICAL ECONOMY

The paper presented below intends to investigate how structural reforms applied in the transition processes of the centrally planned economies from Central and Eastern Europe into to market economies promoted their financialization. According to Epstein (2002) financialization "refers to the increasing importance of financial markets, financial motives, financial institutions and financial elites in the operations of the economy and its governing institutions, both at the national and international levels". Its origin dates back to the reforms carried out in several countries during the last years of the 1970 decade, beginning a process of profound structural change. Lapavitsas (2009), states that the expansion of the financial instruments, more sophisticated means of communication and the progress in global economic integration provided the opportunity to agents engaged in the financial sector to get high returns made in the process of circulation of capital, to the detriment of other sectors. Thus, financialization represents a structural shift in the global economy in which the financial sector gains a greater influence on the overall economy. In addition, it is argued that this process of financialization of the CEE should be analyzed in the context of global-historical trends and that external agents played a key role in the determination of the direction and policies applied.