Institutions, social capital and agricultural change in central and eastern Europe

Data from a survey of agricultural stakeholders are used to demonstrate that institutions and social capital play an important role in agricultural success in Central and Eastern European Countries (CEECs). Protection of private property, freedom of exchange, consistency in monitoring environmental laws, governments that act neutrally and are not corrupt, and trust all contribute to agricultural success. We conclude that, given the importance of agriculture in CEEC economies and the size of agricultural subsidies in the EU, substantial improvements in economic institutions and social capital are still required in most CEECs.