20th, January 2012
A Study of Transitory Order/Marcel Tomášek
(Preliminary consideration: even though the theme has been since the start of the intensive social
change overwhelmingly undertaken in terms of ‘transition’ or ‘transformation’ today other conceptual
‘highlights’ and fields of academic study emerge in the picture (corruption, anthropology of
ownership transformations, study of longer term social change in historical sociology rather than
study of transition as current), following outline - although starting from these initially conceptually
crucial terms - is meant to be not exclusive regarding these emerging academic perspectives of the
phenomena
I. Theoretical context: Transition/transformation, state capture or varieties of capitalism?
For the specialists focusing on the Soviet Block the collapse of communism in 1989 was an equally
great surprise as it was for the general public. Since the dynamics of change were apprehended as
given by relatively gradual reforms in the Soviet Union, changes were depicted rather in terms known
from earlier liberalizing waves within the context of communist vasal regimes (Poland 1956,
Czechoslovakia 1968). Experts on the communist countries did not have ready scenarios designed to
foresee further developments and answers to the eventuality of the collapse of the real socialist order
and the unfolding dilemmas of the unavoidable shift to free-market democracy.
1. Transition or Transformation?
Tracing down the roots of the initial analytical conceptualization of the happenings in Central Eastern
Europe (transition) above indicated initial circumstance must be a key consideration in view of further
shifts in conceptualizing the changes. This analytical frame, which originated in the course of
assessing the developments in Latin America and Southern Europe, was to be critically reproached
and reflected on from the position of regionally bounded post-collapse developments. This way the
alternative conceptualization of unfolding change may have emerged and could be put under the
inclusive label of ‘transformation’. Stark brought in this line a question of ‘paths that differ in kind and
not simply in degree’(1992, 301) and the elements shaping the change which previously were
understood in the analytical frame of ‘transition’ as the outright application of reform steps resulting
from the decision-making processes explainable in line with rational choice axioms. The following
methodological and conceptual debate dominated the field extensively even at the beginning of the
second decade of change in CEE. The transition/transformation debate was the departure point for
further discussion of the developments in CEE (for ex. Dobry 2000, 49-70, Federowitz 2000, 91-106,
Greskovits 2000, 19 – 48, Bunce 2000, 71- 90, Bonker, Muller, Pickel 2002, 1-38, Csaba 2002, 39-54,
Greskovits 2002, 219-246).
What are the advantages and disadvantages of the single concepts in the
transition/transformation debate? Transition, as characterized by the desired outcome firmly encoded
in the concept as the ‘extrication path,’ is the sequence of the reform steps to be undertaken in the
given concrete context to achieve a particular set of results. Precisely this teleological character of
‘transition’ has been the point of departure for the ‘transformation’ reassessment of the happenings in
CEE. In this past-bound analytical frame it is unclear where the path-dependence leads,what the result
of ‘transformation’ as each society ‘extricates’ itself from previous system in a particular way will be.
Its further path is given by concrete fragments, and the way they are recombined in the new regime.
Przeworski’s characterization of democratization as not given ‘by the point of departure’ but
rather by the ‘games of the transition,’ (Przeworski 1991 as quoted by Bunce 2000, 73) as springing
from inclusiveness emerging in the course of moving toward the goal, has got particular significance
for our inquiry. The necessity of accenting more extensively the deeper and essentially simultaneous
character of not only the comprehensive political but also the fundamentally economic (perhaps in the
first place) and not the least essential social ‘transitions’ comes into play here. While in the accounts
of ‘transition’ that originated through assessing the developments in Latin America and Southern
Europe the fundamental issue was the achievement of democratic process and establishing it as ‘the
only game in town’, in most post-communist CEE countries, the truly lasting core of transition
developments rested in the economic changes (although Latin American and South European countries
were frequently subjected to extensive state dirigisme, essentially, no matter how rudimentary their
markets happened to be, they were substantially free market societies).
In post-communist societies much more fundamental simultaneity was at stake—even as far as
the actual ‘democratization’—in that the institutional shift to a democratic frame was quite obvious
and essentially unavoidable step following the decomposition of the communist regimes. The really
contested and uncertain focal point of change was in the arena of economic undertakings (in view of
the need to reconstitute the state-run, hierarchically structured and centrally planned economy). The
unfolding economic changes became the key battleground (and the major segment of ‘the only game
in town’), even if perhaps in the guise of pluralist political contestation. In this line, it may be argued
that the ‘game of economic transition’ emerging in the course of socio-economic changes is thus, in
the post-communist context, the primary arena of transitory politics.
Bunce, in her comparative theoretical assessment of post-communist and Latin American and
Southern European transitions, points out shared reservations about the low compatibility of macroeconomic stabilization, privatization and free-trade reforms and democratic institution-building (as
described by Linz and Stephan 1995, Haggart and Kaufman 1995), and in line with other authors
acknowledges their problematic compatibility as a particularly explicit problem of the post-communist
context (Przeworski 1993, Mason 1995, Ost 1995). The key factor in this ‘sharp deviation from
southern norm’ (Bunce 2000, 80-81) was a hastily unfolding democracy as correlated with the fast
switch to a free market (Bunce 2000).However, in Bunce’s understanding, ‘in the East then democracy
goes with, not against economic reform’ (Bunce 2000, 81). Bunce goes even further by claiming that
breakage with the authoritarian past—in the form of a victory by the non-communist liberal opposition
in the first competitive election—predicted quite well the degree of economic reform in the postcommunist region (Bunce 2000, 81).This claim may maintain validity when differentiating central
European countries from the countries of South Eastern Europe but particularly within the internal
central European context—this causality chain emerges as much more complex and ambiguous. As
Bunce herself noticed, this indicated “law” relates, to a large extent, to the fact that ‘engineering a
transition to capitalism and liberal democracy is tied up and proceeds together’ (2000, 81). This
simultaneous character of ‘transition’ stands also behind the political honeymoon enjoyed by
governments in the initial time period on the one hand and, on the other, enhances ‘the ex-communists
to focus their attention on future prospects, rather then past advantages’ (Bunce 2000, 82), and leads
thus to converting their political capital into economic capital. However, both of these elements, while
initially advancing economic change, at the same time carry dubious baggage. In contrast to the
example of Polish changing governments in the first half of 90’s, the case of the Czech Republic
Right-center coalition governments persisting until 1997 highlights the fact that even a long-persisting
seemingly pro-reform environment complementing almost an ideal political constellation (relative
stability of outspokenly pro-reform declared political representation with long negligible opposition)
does not guarantee the actual advancement and accomplishment of the required sequence of reforms.
2. Transformation and Path-dependency
In the explanatory frame of transition, post-communist societies breaking off from their
authoritarian/totalitarian past—due to certain institutional loosening—emerge as suitable terrain for
erecting “capitalism by design”. Proponents of ‘transformation’ find in this core-theme fuel for their
criticisms. ‘The new does not come from the new or from nothing but from reshaping existing
resources’ (Stark 1992). Stark puts emphases on ‘fragmented relicts’ that in their reassembled and
reconfigured form determine the path of the change. Along with these, however, the particular
‘extrication path’ from the previous regime is also extensively at play, shaping further change. Dobry
(2000, 60) identifies a variety of essential causal imaginaries of path dependence approaches
(classical-technological development based ‘theoretical enigma’, ‘little historical event’, ‘social
mechanisms of self-consolidation and self-enforcement of reproduction of initial advantages’).
Relocating the focus on ‘actors’ choices’ and ‘their tactical dilemmas’ with emphases on the
process of recombination and reshaping the elements inherited from the old regime has been taken as
the cornerstone of the paradigmatic shift which resulted in emphasizing so-called ‘communist
legacies’ in the general picture of the CEE post-communist setting. ‘Communist legacies,’ in the face
of the first extensively exposed trends of omission of the application and the sequence of the reforms,
thus become in the second half of the ’90s the explanation at hand which substantially marked the
analytical perception of stumbling reforms in CEE. Getting to the paradoxical essence of the historical
and technological legacies bounded explanations, Graber and Stark state that ‘the very mechanisms
that foster allocative efficiency might eventually lock in economic development to a path which is
inefficient viewed dynamically’(1997, 5). In this sense, ‘the mechanisms that are conductive for the
synchronic adaptation of the economy to specific environment may, at the same time undermine
economy’s diachronic adaptability’ (1997, 5). The legacies remained the focus of Graber’s and Stark’s
attention in the hunt for shapers of new orders, however, in their ‘dual potential’ to block and support
‘transformation’.
But is looking for the sources of these ‘stumbles’ in institutional and organizational legacies of
the communist regime and in the recombination of the structural elements of the previous communist
regimes the right answer? Probably the sharpest argument in that direction have been put forward by
Staniszkis (1999) when explicitly describing ‘political capitalism’ that came into being in CEE as
institutional extension of mercantilist strategies characteristic for the last years of communism
(formation of networks and redistributing coalitions determining coming post-communism).
In looking at the core stumbling changes, meaning those representing the major processes of
the cardinal switch from the state-firms based, planned and directive economy, to the private
enterprise-dominated free-market economy, it clearly emerges that although the processes have
occurred in general in the circumstances of institutional ‘bricolage’, the core changes occurred anew,
rather than being principally built on the institutional and organizational elements of the ‘old regime’.
The question is, if fundamental stumbling and misdirection of the changes in CEE countries resulting
in detours, which effectively prolong the whole process of switching to more Western European-like
or Euro-Atlantic-like socio-economic and political patterns, took place primarily due to the communist
institutional inheritances, or if they were rather the result of the new coming-into-existence only in the
course of change.
Bruszt (2000), when comparing happenings in Russia and the Czech Republic, speaks of the
consequences of state regulation too willingly neglected to characterize and explain the property
structure that had emerged in a manner allowing for the exploitation of its position in terms of
weakening the market character of the economy. The question of the unintended consequences of
neglected state regulation in the Czech Republic is at the center of the debate about the changes of the
early ’90s as critically marking the character of the Czech road to capitalism essentially to the present
day. The designers of the Czech privatization have openly acknowledged counting on an intentional
neglect of state regulation as a suitable feature for initiating and boosting the free market type of
economy in the post-communist socio-economic and political context (Tomáš Ježek's: ‘Economists
must come before lawyers’, Václav Klaus's ‘I do not recognize something as dirty money’). So far for
the Czech context, in view of these ‘unexpected’ consequences, it may be claimed on the base of
pronouncements of the key designers and implementers of privatization scheme, that this, in Bruszt’s
understanding, unintended neglect of state regulation was the feature of the intended sequence of the
changes in economy and build up of a new economic order. Even as it was becoming clear that this
new economic order is only partly reconceivable with the designated goal patterns of free-market
economy as known from the Euro-Atlantic area the necessary adjustments measures were
deliberately delayed and hindered and finally at the moment of implementation usually scaled down
to constrain their effect (for ex. regulation of the Czech capital market as pushed for by Tomáš Ježek
after he came to terms with the need of self-preserving regulation in free-markets).
3. State Capture or Varieties of Capitalism?
The third—and somewhat overlooked—wave is associated with such concepts as premature
consolidation (Richard 1996), restoration (Wnuk-Lipinski 1999), and state capture (Hellman 1998,
Hellman, Jones, Kaufmann 2000, 2003), that in varying degrees indicate the limited capability of the
transitory order to evolve in the direction of advanced free-market societies as a result of rent-seeking
mechanisms and associated vicious circles. These result from an overlap of already newly emerged
socio-economic and political interests that have been affecting the regulation and institutional build-up
of newly constructed socio-economic and political systems. With the deconstruction of communist
regimes frequently rather taking shape of collapse the CEE countries have advanced relatively fast
toward "a free market without adjectives" (favorite Vaclav Klaus's expression and desired outcome)
which however suffered from a variety of structurally produced pathological phenomena that in
qualitative terms, was not far from that existing in many of the Latin American countries. For CEE
countries not proceeding much further from this rudimentary state the breaking point happened to be
associated closely with reasoning in the direction of corrective effect of increased foreigner direct
investment and improved institutional environment due to the imposition of the EU law requirements
(immediately preceding the EU membership or following the actual entering the EU), however, how
far this ‘Europeanization’ made the trick?
Throughout the last decade a discourse of ‘varieties of capitalism’ has achieved prominence in
assessing the current unstable state and changes of long steadily developing post-war welfare
capitalism (Soskice, Hall 2001; Elsner, Hanappi - eds. 2008, Hancké - ed. 2009). Is identifying
particular practices of CEE capitalism within this frame as suggested by Lane and Myant (eds. 2007)
the answer to the analytical dilemma?
Table no. 1: Three waves of conceptualizing the social change in CEE (Tomášek 2005)
1
2
3
Identified condition
Next stage or implications
transition (Linz, Stepan 1995)
democratic consolidation
transformation (Grapher, Stark (eds.) 1997, Chavance, Mognin E., 1997, Stark, Bruszt communist legacies, path-dependency
1998)
premature consolidation (Rychard 1996), restoration (Wnuk-Lipinski 1999), state Europeanization
capture (Hellman 1998, Hellman, Jones, Kaufmann 2000, 2003)
II. Research Theme
1) The research project is to investigate patterns of practice as they were associated primarily with the
stage of the change which may be labeled as post-privatization/secondary privatization (19952004).
By this is meant not the actual act of small and 2 waves of large scale privatization in the period of 1990 - 1994 considered
by the decision-makers, at the time, to be the actual ‘transition’ but the period of factual privatization/post-privatization. The
process leading to emergence of the actual owners started in decisive extent by the formal close of the ‘large privatization’
bringing with it transfer of essential part of ownership in the economy to millions of individual share-holders. However,
their shares happened to be managed and factually controlled mostly by IPFs (Investment Privatization Funds) that were
supposed to represent their interests. IPFs were established extensively by state-dominated banks (among other entities) that
in most of the instances were to remain that way still for many years to come – essentially till the beginning of the new
millennium and negotiating the EU membership (made unrestrained public – privatization related – support for various
economic entities and other financial flows in between state and private sector illegal).
2) The second period in the focus is the one since the entering the EU till today (2004-2011) as
being closely related to usual reasoning in the direction of corrective effect of increased FDI and
improved institutional environment due to the imposition of the EU law requirements (immediately
preceding the EU membership or following the actual entering EU).
The purpose of this time divide is to established specific features of prevailing patterns of undertakings by the actors in the
economic sphere and at the overlap of economy and politics in these two periods as the post-2004 period stands for legally
sanctioned belonging to the Euro-Atlantic type of advanced free-market society or at least immediately approaching it (since
it is assumed that transitory rent-seeking, rent-creating mechanisms and associated vicious circles in intersecting spheres of
politics and economy, in the wordings of 3rd conceptual wave, have been violated through the process of ‘Europeanization’).
III. Relevance of the Research Theme to the Conceptual Debate
Above outlined periods and time divides point to the crucial happenings and occurrences really
determining the resulting ownership structure constituting the long-term base of the Czech native part
of the Czech economy (truly substantive privatization process through what is commonly overlooked
only as post-privatization or secondary privatization developments constituting already ‘business as
usual’ in a regular market economy).
This gets essential relevance for the transition/transformation/state capture/varieties of
capitalism conceptual debate and touches the central issues of these conceptualizations concerning
how far the socio-cultural consequences of the communist legacies have been involved in prolonged
persistence of transitory features in the period of post-privatization/secondary privatization or
adversely to what degree the existence of prolonged transitory order has been the result of shorter-term
determinants based in newly reconfigured economic and political realms and dependent on mutual
interference of those and to what extent these more recent shorter-term elements are at play even at
present.
IV. Method
Analysis of the particular instances of developments and undertakings in the economy and in
intersecting spheres of politics and economy in the Czech Republic – various stages in the
development of discourses and the ways how situations and incidents are framed.
The empirical source for the inquiry are at the first stage - the particular instances of
happenings and problematic undertakings in the economy and at the overlap of politics and economy
as they are registered and referred to in weekly and daily periodicals (1994-2004 – Respekt, Ekonom,
and for the period 2004-2011 – Respekt, Ekonom, Mladá fronta, Lidové noviny, Hospodářské noviny)
(in order to delineate qualitatively the variety, forms and extent of the phenomena).
In the 2nd – follow-up stage written conceptual and analytical materials and positions
concerning happenings and problematic undertakings indicated in the 1st phase from the production of
concerned governmental and public administration institutions are to be analyzed.
Analysis of qualitative data is most likely to employ extensively grounded theory (though it
may seem as unconventional as no active interviewing with actors is to take place – so it is to be
utilized primarily in the way of various stages of coding and building up of own ‘grounded’ theory
from that) and frame analysis (and other Goffman’s inspirations particularly regarding the analysis of
media content).
(Year Time Plan:1st data collection, literature review,2nd analysis, writing, 3rd literature update,
completing, 4th publication)
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