The Republic of Moldova's transition: between a failed communism and an un-commenced capitalism

Abstract

This article outlines the main social, political, and economic reasons that explain Moldova's delay in its post-Soviet transition, after gaining its independence in August 1991. In comparison to the Baltic States, Republic of Moldova has had a different starting point in the "transition race". First, the independence of the former Soviet republic benefited of a much lesser support within the Moldovan society -local population and political elites-, and on behalf of foreign states and international institutions. Moldova's agrarian economy and its strong dependence on Russian resources and post-Soviet economic system also disadvantaged its development. To this one could add state governors' low capacity to negotiate with foreign financial donors (mainly IMF and World Bank) in order to defend the local economic interests, but also to properly use the contracted credits. One of the main obstacles in Moldova’s development path was the low quality of state governance and the advanced level of "state capture" (i.e. interference of vested interests into state governance) and thus its limited capacity to administrate a favorable transition based on existent economic resources and assets, not on their ruins.