Transformative institutional change in departures from state socialism relies not only on
evolutionary bottom up processes but also on sustained intervention by the state to build a new
institutional framework. The state must simultaneously dismantle the institutions of central
planning and put in place the requisite rules of competition and cooperation of a capitalist
economy. The shift of control rights is often retarded, however, by mutually reinforcing interests
which perpetuate a close relationship between the state and the firm. On the one hand, state
actors are rarely willing to institute a new economic system that completely deprives them of
direct control rights at the firm level. On the other hand, managers often prefer the continuation
of direct state-firm linkages to gain access to resources in a highly insecure and rapidly changing
business environment. As a result, “there is still a much different atmosphere of interaction
between government and individual economic agents in ex-socialist countries than in countries
with a long tradition of free markets” (Murrell 1996: 32).