The Relational Economy (1): From Kornai’s System Paradigm to a Structured Approach to Post-Communist Economies

Bálint Madlovics

Keywords: The role of the state and the new spirit of capitalism(s)

Abstract: In “The System Paradigm Revisited,” János Kornai argued for the conceptual distinction of “autocracy” from “democracy” and “dictatorship” to have an ideal type for the analysis of the specificities of post-communist political systems. This presentation follows up on that idea in two ways: it presents how Kornai’s conceptual triad may be doubled into a six-regime typology, using the category of informal patronalism; and it argues – parallel to Kornai’s conceptualization of autocracy – for the conceptual distinction of “relational economy” from “market economy” and “planned economy” to have an ideal type for the analysis of the specificities of post-communist economic systems. The presentation offers an overview of the dominant types of coordination mechanism (as Kornai calls them) in the three ideal types of economy: regulated market coordination, where the state defines normative boundaries for free competition; bureaucratic-resource redistribution, where the state defines ownership structure and production structure; and relational-market redistribution, where the state defines the ownership structure with secondary effects on the production structure.