The Politics of Greed: How Privatization Structured Politics in Central and Eastern Europe

Front Cover
Rowman & Littlefield, 2006 - History - 357 pages
With the dissolution of the Soviet Empire, it seemed that market capitalism had triumphed and that democracy might replace authoritarian regimes. Economic reformers in the former Eastern Bloc rushed to liberalize prices and transfer state assets to private hands. They assumed that private owners in a market setting would have no choice but to behave rationally-that is, to invest in restructuring privatized enterprises so as to maximize profits. They also assumed that these owners would perceive a stable institutional environment as conducive to economic success and thus become a powerful lobby in favor of the rule of law, paving the way for democracy. The post-communist reality turned out to be very different. Private owners found that in a weak state with limited laws and regulations and ineffective corporate governance structures, it was more lucrative to steal enterprise assets and exploit opportunities for arbitrage than to restructure enterprises. The lesson learned is that not all forms of private ownership are the same. As this book's in-depth political history of privatization in Central and Eastern Europe demonstrates, the way that assets are privatized matters, both with respect to national economic performance and the successful development of the rule of law. Andrew Harrison Schwartz had unprecedented access to high-level Czech government officials during the Czech Republic's privatization process. This book is the result of the unique insights he gained and the innovative analytical framework he subsequently developed-ownership regime theory-which for the first time places ownership structures at the center of political transition analysis. Engaging and important, The Politics of Greed applies ownership regime theory to a broad range of post-communist privatization cases, including those of the Czech Republic, Poland, Hungary, Russia, and Ukraine.
 

What people are saying - Write a review

We haven't found any reviews in the usual places.

Contents

Prologue
xi
Foreword
xiii
Acknowledgments
xxi
IntroductionPolitics and Privatization
1
MARKETS DEMOCRACY AND PRIVATIZATIONTHE THEORETICAL ARGUMENT
21
Neoliberal PrivatizationThe Dream That if You Create Private Owners Democracy and the Market Economy Will Follow
23
INSTITUTIONALISM AND BEYONDINTRODUCING OWNERSHIP REGIME THEORY
43
Institutional Policy Design Politics and the Creation of Capitalism
45
Legitimating the GiveawayJune 1990 to February 1991
129
Creating PlutocracyFebruary 1991 to May 1992
157
Implementing the Ownership Regime February 1991 to December 1995
185
The Abuses of Plutocracy the Failure of Czech NeoliberalismJanuary 1996 to December 1997
229
Political and Economic Implications of Czech Rapid Privatization
269
CONCLUSIONSOWNERSHIP REGIME THEORY IN COMPARATIVE PERSPECTIVE
287
Plutocracy Escaped Plutocracy Avoided Plutocracy Embedded
289
References
323

Ownership RegimesThe Basic Model of How They Form
59
The Two Trajectories of Ownership Regime Evolution
75
CZECH PRIVATIZATION AS THE ILLUSTRATIVE CASE OF THE OWNERSHIP MODEL OF POLITICAL ECONOMY
83
Elite ApprovalNovember 1989 to May 1990
85
Index
341
About the Authors
Copyright

Other editions - View all

Common terms and phrases

About the author (2006)

Andrew Harrison Schwartz (1957–2004) was research associate at the Berkeley Roundtable on the International Economy (BRIE).
John Zysman is codirector of the Berkeley Roundtable on the International Economy (BRIE).

Bibliographic information