From common heritage to divergence: Why the transition countries are drifting apart by measures of agricultural performance

The twenty-two transition countries in Central Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) embarked on their program of land reform and farm restructuring in the early 1990s from a common heritage, reflecting the Soviet model of socialist agriculture that dominated the region for decades. However, inherent cultural and political differences influenced the specifics of implementation of agricultural reforms in the two groups of former socialist countries. We examine how agricultural sectors in CEE and CIS, having started from a common heritage, are following divergent paths of market reforms, gradually creating a sharp "East-West divide" between the two subregions. The discussion of divergence in the following sections starts with the two main issues of land privatization and restructuring of inefficient farms. After that, we examine the impact that policy differences have had on agricultural performance, substantially expanding the earlier results of Lerman (1999).