doi.org/10.52340/eab.2025.17.04.02 

This article examines two conceptually distinct theoretical approaches to post communist economic transformation: Professor Jeffrey Sachs’s shock therapy model and Academician Vladimer Papava’s necroeconomics theories. It analyzes the epistemological foundations, practical applications, and outcomes of these paradigms across different historical and institutional contexts.
Special attention is devoted to Academician Papava’s recent works – Unconventional Economics (2021) and From Retroeconomics to Sanctionomics (2024) – which further develop his theoretical system in light of contemporary global challenges. The article also traces Professor Sachs’s intellectual evolution from a co author of the Washington Consensus to a scholar increasingly focused on sustainable development and global solidarity.
The study concludes that Academician Papava’s contextual, adaptive, and institutionally grounded approach is better suited to the realities of post Soviet countries. At the same time, it argues that both paradigms contain valuable theoretical insights whose synthesis may contribute meaningfully to future economic policy design.

Research Questions and Methodology
The study addresses three central research questions: (1) What epistemological differences distinguish the two theoretical approaches, and how do these differences shape their practical policy recommendations? (2) How can the divergent outcomes of economic reforms in Poland, Russia, and Georgia be interpreted through the lenses of these paradigms? (3) To what extent is each approach adaptable to contemporary global challenges, including pandemics, geopolitical conflicts, and the evolving nature of globalization?
The analysis employs documentary research methods to examine the theoretical contributions of both scholars, complemented by comparative historical analysis to assess reform outcomes across countries. Four analytical criteria structure the comparison: epistemological orientation (universalism versus contextualism), attention to institutional factors, adaptive capacity to emerging economic phenomena, and practical results within specific national contexts.

Key Findings
Professor Sachs’s shock therapy, formulated in the early 1990s, promoted rapid liberalization, stabilization, and privatization as universal prescriptions for post communist economies. Although this approach achieved notable success in Poland – where inflation fell from 639% in 1989 to 60% by 1991 – the article argues that Poland’s achievements were contingent upon specific institutional preconditions: the presence of a nascent private sector, a strong civil society rooted in the Solidarity movement, geographic proximity to Western Europe, and substantial international financial support.
The Russian experience stands in sharp contrast. Despite adopting similar shock therapy measures beginning in 1992, Russia faced hyperinflation of 2,509% that same year, a continuous GDP decline throughout the 1990s, and a rise in poverty from 11% to 38% by 1998. This divergence is interpreted through Academician Papava’s necroeconomics framework, which highlights the persistence of “necro enterprises” – economically non viable firms sustained by various forms of state support rather than market competitiveness.
The Georgian case reflects elements of both approaches across different periods. The country’s severe economic collapse in the early 1990s – exacerbated by civil conflict and territorial disputes – was followed by stabilization measures in 1994–1995, in which Academician Papava played an active role. Subsequent radical liberalization (2004–2012) improved the business environment but failed to address structural unemployment and regional disparities, underscoring the limitations of universalist policy prescriptions.

Theoretical Contributions
The article traces the theoretical evolution of both scholars. Over the past two decades, Professor Sachs has substantially revised his positions, shifting from the advocacy of shock therapy toward an emphasis on sustainable development and global solidarity. This evolution is reflected in works such as The End of Poverty (2005), The Ages of Globalization (2020), and his co chairmanship of the Lancet COVID 19 Commission.
Academician Papava’s theoretical contributions have expanded through continuous conceptual innovation. His evolving framework includes necroeconomics (analyzing the survival of post communist enterprises), retroeconomics (characterizing economic regression), zombie economics (examining technically bankrupt firms sustained through financial support), sanctionomics (assessing the multifaceted effects of economic sanctions), and confrontational globalization (describing the weaponization of economic interdependence).
The study also acknowledges the limitations inherent in both paradigms. The early formulation of shock therapy underestimated the time required for institutional development and the social costs associated with rapid transformation. Necroeconomics, while analytically powerful, faces challenges related to prescriptive precision and empirical validation across diverse national contexts.

Contemporary Relevance
The COVID 19 pandemic and the Russia–Ukraine war have tested both theoretical frameworks. Academician Papava’s concept of the “coronomic crisis” – in which “the economy becomes hostage to medicine” – and his earlier warnings about zombie economics proved prescient, as extensive state support sustained numerous inefficient enterprises. His sanctionomics framework further clarifies the externalities of economic sanctions for third countries, energy markets, and global supply chains.
Professor Sachs’s emphasis on global pandemic governance and international cooperation, particularly through his work with the Lancet Commission, reflects his evolved perspective on collective action challenges. The article argues that the two approaches exhibit a degree of complementarity: Papava’s micro level analysis of firm behavior and Sachs’s macro global perspective together offer a more comprehensive analytical lens.

Conclusions
The comparative analysis yields five principal conclusions. First, institutional context is fundamental to the success of economic reforms – identical policy packages can generate markedly different outcomes across distinct institutional environments. Second, the presumed universality of economic theory requires critical reassessment; effective policy design must be grounded in a deep understanding of local conditions. Third, sound economic theory must remain adaptive, as illustrated by the ongoing theoretical evolution of both scholars. Fourth, contemporary crises underscore the necessity of continuous theoretical innovation to interpret emerging economic phenomena. Fifth, the cultivation of independent economic thought and the development of local economic schools are essential for achieving long term economic resilience and success.
Directions for Future Research
This analysis opens several avenues for further investigation.
Synthesis potential. Future research should examine the possibility of synthesizing elements from both paradigms into integrated analytical frameworks that combine universalist insights with contextual sensitivity.
Empirical testing. Academician Papava’s theoretical constructs – particularly necroeconomics, zombie economics, and sanctionomics – require systematic empirical testing across a wider range of post communist and developing economies to assess their explanatory power and delineate their boundary conditions.
Policy applications. Additional research is needed to translate the confrontational globalization framework into practical strategies for economic resilience, especially for small, open economies navigating great power competition.
Comparative institutional analysis. Further comparative studies should investigate why similar reform packages produced divergent outcomes, with particular attention to informal institutions, social capital, and historical path dependencies.
Methodological development. The identification criteria for necro enterprises and zombie firms require refinement to reduce subjectivity and facilitate cross country comparative analysis.
The international recognition of Academician Papava’s contributions – his election to the International CORE Academy of Sciences and Humanities in 2024 and to the Royal Economic Society in 2025 – underscores the global relevance of theoretical frameworks derived from post Soviet empirical observation. This highlights the need for greater attention to the periphery to center flow of economic ideas within the discipline.
Ultimately, the experience of post communist transformation and the analysis of contemporary crises confirm that no universal path to economic development exists. Each country must craft its own context appropriate strategy. A synthesis of Academician Papava’s contextual adaptive approach with Professor Sachs’s global perspective may offer the most productive foundation for achieving sustainable and inclusive economic development.

Keywords: Post-communist transformation, shock therapy, necroeconomics, retroeconomics, zombie-economics, sanctionomics, unconventional economics, confrontational globalization, institutional context, economic policy.
JEL Codes: P21, P26, P30, O57, F51

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