BUDAPEST: Only by the skin of his teeth did Vaclav Klaus, the blunt proponent of a "market economy without adjectives," return to power in Prague after last spring's parliamentary elections. Even so, his country is unique in the region in the strength of its support for reforms.
While Western observers rejoiced over the victory of Boris Yeltsin, parties tied to the communist past still control Russia's Duma. Only their openly reactionary attitude may have cost the Communists last July's election. More moderate postcommunist parties, on the other hand, are in power in Warsaw, Budapest, Bucharest, Sofia, and throughout most of the former Soviet empire. Only in the Czech Republic are elections nowadays fought between Western-style liberals and Western-style social democrats, with postcommunists (reformed or not) largely absent from the political scene.
That this is no accident of electoral mechanics is proved by studies that probe the attitudes of ordinary Czechs. Among ten countries in the New Democracies Barometer organized by Professor Richard Rose of the University of Strathclyde in Great Britain, for example, the Czechs are the most approving of the new economic system and political regime, and are most antagonistic to the economic and political environment that existed prior to 1989.
Many believe that prewar democratic traditions are responsible for Czech exceptionalism. But there may be another reason why Czechs are more supportive of reform, and it may be related to the sense of empowerment they feel as a result of bold ownership reforms put into effect by the Klaus government.
The Czechs were first and fastest at comprehensive privatization, including a mass privatization program involving the vast majority of the population through participation in voucher auctions, a far-reaching program of restitution, and rapid liberalization for starting new private businesses. Significantly, unlike in Russia and other transition countries, Czech privatization did not confer special property rights on managers and other enterprise insiders (who are likely to have many ties to the old regime and thus unlikely to become convinced supporters of the new one), but spread ownership rights over the widest spectrum of general population.
Evidence exists that this type of program makes a difference, and that the near instant growth of a new entrepreneurial class altered the Czech political landscape. A survey of 1450 adults by the Institute of Sociology of the Czech Academy of Sciences earlier this year shows that specific reform policies affect how people think about both the changes of the past six years and the way they hope the economy will evolve. In particular, the survey shows that individuals who participated in both waves of voucher privatization, as well as those who received property through restitution, and also those who took advantage of the new economic freedom to become entrepreneurs, have views often sharply different from the rest of the population.
Those who participated in both waves of voucher privatization (79% of respondents in the survey) firmly declare themselves to be more satisfied than those who sat out at least one wave, with 56% of participants in both waves satisfied with the course of reform, versus only 37% of those who participated in neither or only one wave. Restituents -- those 18% of respondents who received property previously owned by a member of their family but confiscated by the communists in 1947 -- are similarly cheery: 66% of them express satisfaction with reform, versus 49% for non-restituents. Entrepreneurs (8% of respondents) are the most enthusiastic, with 76% satisfied with reforms.
Another way of measuring attitudes is to ask people what policies they support. Here again, policies considered pro-reform are supported to a greater degree by groups that participated in or benefitted from the reform process. When asked, for example, whether prices should be more tightly controlled than currently, 43% of participants in both waves of voucher privatization disagree. Among the remainder -- those who participated in neither or only one wave -- opposition to increased price controls is weak, with only 26% disagreeing. Restituents are also skeptical of increased price regulation: 46% of them disapprove of an increase in price controls, versus 38% of non-restituents. Entrepreneurs even more markedly diverge from the rest of the population, with 67% of business owners opposed to new price controls, while only 37% of the remaining sample share that opinion.
Czechs seem to be reverting to the politics of the interwar period, with most favoring some mix of state control and free enterprise: 61% of all respondents support a "social market" system, versus 28% who support a "free market" system and 11% who prefer the pre-1990 socialist system. But preferences are skewed towards the free market for the same groups that benefited from reform. Those who took part in both waves of voucher privatization are 50% more likely to favor a free market; restituents are 42% more likely to do so. And not surprisingly, the new entrepreneurs are the strongest champions of the "market economy without adjectives:" 54% of them support a free-market system . (Only one out of 110 entrepreneurs surveyed reported that he preferred the old socialist ways.)
It is possible that the opinions held by these groups are influenced by factors other than those discussed. However, even after taking such characteristics as education, gender, and community size into account, the same conclusions persist. Voucher privatization, restitution, and entrepreneurship: all generate support of reform. In most other countries of the region, talk remains focused on the difficulty of "changing the mentality" of the people. The Czech experience suggests that dramatic property reforms can be self-reinforcing, creating an atmosphere spurring further development of a market economy. So the lesson for reformers seems to be: act boldly and you can build your own constituencies. And steady people help governments to steady themselves.
BUDAPEST: Only by the skin of his teeth did Vaclav Klaus, the blunt proponent of a "market economy without adjectives," return to power in Prague after last spring's parliamentary elections. Even so, his country is unique in the region in the strength of its support for reforms.
While Western observers rejoiced over the victory of Boris Yeltsin, parties tied to the communist past still control Russia's Duma. Only their openly reactionary attitude may have cost the Communists last July's election. More moderate postcommunist parties, on the other hand, are in power in Warsaw, Budapest, Bucharest, Sofia, and throughout most of the former Soviet empire. Only in the Czech Republic are elections nowadays fought between Western-style liberals and Western-style social democrats, with postcommunists (reformed or not) largely absent from the political scene.
That this is no accident of electoral mechanics is proved by studies that probe the attitudes of ordinary Czechs. Among ten countries in the New Democracies Barometer organized by Professor Richard Rose of the University of Strathclyde in Great Britain, for example, the Czechs are the most approving of the new economic system and political regime, and are most antagonistic to the economic and political environment that existed prior to 1989.
Many believe that prewar democratic traditions are responsible for Czech exceptionalism. But there may be another reason why Czechs are more supportive of reform, and it may be related to the sense of empowerment they feel as a result of bold ownership reforms put into effect by the Klaus government.
The Czechs were first and fastest at comprehensive privatization, including a mass privatization program involving the vast majority of the population through participation in voucher auctions, a far-reaching program of restitution, and rapid liberalization for starting new private businesses. Significantly, unlike in Russia and other transition countries, Czech privatization did not confer special property rights on managers and other enterprise insiders (who are likely to have many ties to the old regime and thus unlikely to become convinced supporters of the new one), but spread ownership rights over the widest spectrum of general population.
Evidence exists that this type of program makes a difference, and that the near instant growth of a new entrepreneurial class altered the Czech political landscape. A survey of 1450 adults by the Institute of Sociology of the Czech Academy of Sciences earlier this year shows that specific reform policies affect how people think about both the changes of the past six years and the way they hope the economy will evolve. In particular, the survey shows that individuals who participated in both waves of voucher privatization, as well as those who received property through restitution, and also those who took advantage of the new economic freedom to become entrepreneurs, have views often sharply different from the rest of the population.
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Those who participated in both waves of voucher privatization (79% of respondents in the survey) firmly declare themselves to be more satisfied than those who sat out at least one wave, with 56% of participants in both waves satisfied with the course of reform, versus only 37% of those who participated in neither or only one wave. Restituents -- those 18% of respondents who received property previously owned by a member of their family but confiscated by the communists in 1947 -- are similarly cheery: 66% of them express satisfaction with reform, versus 49% for non-restituents. Entrepreneurs (8% of respondents) are the most enthusiastic, with 76% satisfied with reforms.
Another way of measuring attitudes is to ask people what policies they support. Here again, policies considered pro-reform are supported to a greater degree by groups that participated in or benefitted from the reform process. When asked, for example, whether prices should be more tightly controlled than currently, 43% of participants in both waves of voucher privatization disagree. Among the remainder -- those who participated in neither or only one wave -- opposition to increased price controls is weak, with only 26% disagreeing. Restituents are also skeptical of increased price regulation: 46% of them disapprove of an increase in price controls, versus 38% of non-restituents. Entrepreneurs even more markedly diverge from the rest of the population, with 67% of business owners opposed to new price controls, while only 37% of the remaining sample share that opinion.
Czechs seem to be reverting to the politics of the interwar period, with most favoring some mix of state control and free enterprise: 61% of all respondents support a "social market" system, versus 28% who support a "free market" system and 11% who prefer the pre-1990 socialist system. But preferences are skewed towards the free market for the same groups that benefited from reform. Those who took part in both waves of voucher privatization are 50% more likely to favor a free market; restituents are 42% more likely to do so. And not surprisingly, the new entrepreneurs are the strongest champions of the "market economy without adjectives:" 54% of them support a free-market system . (Only one out of 110 entrepreneurs surveyed reported that he preferred the old socialist ways.)
It is possible that the opinions held by these groups are influenced by factors other than those discussed. However, even after taking such characteristics as education, gender, and community size into account, the same conclusions persist. Voucher privatization, restitution, and entrepreneurship: all generate support of reform. In most other countries of the region, talk remains focused on the difficulty of "changing the mentality" of the people. The Czech experience suggests that dramatic property reforms can be self-reinforcing, creating an atmosphere spurring further development of a market economy. So the lesson for reformers seems to be: act boldly and you can build your own constituencies. And steady people help governments to steady themselves.