MARKET MAKING AS STATE MAKING: Constitutions and Economic Development in Post-communist Eastern Europe1

Abstract. After nearly a decade of struggle to liberate economic activity from the state, many of the post-communist countries now face the question of how to liberate the state captured by economic groups. This paper argues that the creation of a market order is about the parallel constitution of a specific structure of rights and of a state with a specific structure of representation allowing for the capacity to uphold these rights and prevent the capturing of the state by particularistic interests. The constitutional sources of such state capacities have to do with a specific representation of social diversity within the state based on the principles of distributed authority and distributed intelligence. Based on the analysis of two periods of state (re)making in the United States, described as key conjunctures in market making, the paper offers a framework to understand the constitutional sources of diversity in post-communist market making. JEL classification: H10, H70, K00, N40, P26. 1