Transition from communism and the spectre of Latin-Americanisation

East European Quarterly

Volumn 31, Issue 1, 1997, Pages 69-91

  Nowotny, Thomas ^a  

^a Organization for Economic Co operation and Development   (France)

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EID: 7844239088     PISSN: 00128449     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (53)

1. T. Nowotny, Bleibende Wemte - Verblichene Dogmen, (Wien, 1985), p. 59.
2. For S. Huntington ["How Countries Democratise," Political Science Quarterly, Vol. 106, No. 4], broad democratization is the "most important trend in the late 20th Century."
3. A spectacular failure of democracy occurred, of course, in Germany in the Thirties. Are there similarities between the Weimar Republic and some of the "transition countries"; and especially with Russia? E. Zimmermann ["Theories of Re-Democratisation; Paths and Promises; or Shadows of the Past," paper for the 2nd Pan-European International Relations Conference, Paris, 1995] answers with an emphatic "YES."
4. The "Big Bang Theory"; advocated most prominently by J. Sachs ["Building a Market Economy in Poland," Scientific American, March 1992].
5. IBRD, Historically Planned Economies - a Guide to the Data (Washington, 1992).
6. Other things too, might be considered positive results of Communist rule. P. Kende ["Ce que le Communisme a legue de durable: le cas Hongrois in Europe de l'est après l'effondrement du Communisme," Le paid de heritage, l'autre Europe, Nos. 28-29 (Summer 1994)] believes them to be a penchant for an egalitarian society; an active social policy; and a "de-ideologisation" of politics.
7. F. Butschek, "External Shocks and Long Term Patterns of Economic Growth in Central and Eastern Europe," in D. Good, Economic Transformation in Central and Eastern Europe (New York, 1993), p 27-42.
8. F. Butschek ["Die Reichen, die Armen und die Geschichte," Wirtschaft und Gesellschaft, Vol. 20. No. 2, pp. 281-291] reviews theories on what causes long-term economic growth, emphasizes the importance of institutions, and derides classical economics for having provided "nothing" to explain long term growth.
9. V. Havel, Der Versuch in Wahrheit zu leben (Reinbeck, 1980).
10. Market economies are based on horizontal communication; planned economies upon vertical communication. The "older" a planned economy, the more difficult to transform [R. Dietz, "Perestroika und Marktwirtschaft - die Schluesselrolle westlicher Unternehmer," WIIW (Vienna), Feb. 1991].
11. Of course, any ruler who comes to power after a revolutionary change will have to accept that he can exchange only a small part of the existing bureaucracy. G. Wilson ["Counter Elites and Bureaucracy," Governance, Vol. 6, No. 3 (July 1993)] believes this not to be a serious impediment to transformation. Bureaucracies are rather eager to adapt to new circumstances.
12. T. Rosenberg [The Haunted Land: Facing Europe's Ghosts after Communism (London, 1995)] compares "Vergangenheitsbewaeltigung" in Poland, the (former) CSFR, and in former Eastern Germany. It is impressive in neither of these three countries. The long term consequences of this failure might be serious: where would Germany be today, had it not confronted its Nazi past?
13. International financial institutions and foreign advisers often seem eager to impose just one of the many existing versions of "capitalist systems." In fact, these models diverge widely, between Japan, the USA and Scandinavia. Nonetheless, there is near unanimity among foreign advisers on the necessity of a fast and complete "privatisation." But such privatisation is difficult to carry out; and it certainly takes quite some time. In the meanwhile, even state owned enterprises can become rather efficient (as proven, for instance, by state owned French "Renault"). See also L. Csaba, Capitalist Revolution in Eastern Europe: A Contribution to the Theory of Systemic Change (Brookfteld, 1995).
14. The study was published on October 20, 1995, in the Russian paper Sewodnija.
15. ...and such developments into the direction of a COMPRADORA economy are also diagnosed by Western observers [W. Biermann, Die Verratene Transformation. Gesellschaftliche Machtverhaeltnisse im neuen Russland (Muenster, 1995)].
16. C. Ulrich, "The Growth of Crime in Russia and the Baltic Region," RFE/RL Research Report, Vol. 3, No. 23 (June 10, 1994).
17. Transition countries would have needed net annual investment inflows of 100-200 billion US Dollar [D. Begg et al., The East, the Deutschmark and EMU, Monitoring European Integration - The Impact of Eastern Europe (London: Centre for Economic Policy Research, 1990)].
18. Though nobody knows the real amount of inflows, it is certain that they remained vastly below that mark - and were certainly compensated by capital flight [J. Sachs, "Betrayal," The New Republic, January 31, 1994;
19. and E. Chol, "Le fiasco de l' aide a la Russie," Expansion, Avril 20, 1994].
20. Furthermore, those grants that have been given, have largely failed their intended purpose: "the main beneficiaries were luxury hotels billing an endless stream of visiting delegations at the rate of 300$ per night." [C. Flickner, "The Russian Aid Mess," The National Interest; No. 38, (Winter 1994/95), pp. 13-18].
21. There is a political aspect to rapid, and possibly premature, trade liberalization: a) countries become dependent upon capital accumulation in other countries; b) accumulation in the own country comes easier, if it is supported by both workers and the bourgeoisie. Such an alliance is more likely if economic development is mainly concentrated on the internal market. But, of course, that is a goal that has to be abandoned under today's conditions of intensive economic interdependence [H. Feigenbaum and J. Henig, "Privatisation and Democracy," Governance. Vol. 6, No. 3 (July 1993), pp. 438-453].
22. The problem of industrial re-structuring, is accentuated by the fact that the old state enterprises did not merely function as production units. With their plethora of housing projects, health clinics, vacation homes, etc. they were the base for the workers' social existence [S. Clarke, a.o., What about the Workers? Workers and the Transition to Capitalism in Russia (London, 1993)].
23. As for the deep industrial crisis that befell Argentina in the aftermath of the Second World War - see Carlos Diaz Alejandro, Essays on the Economic History of the Argentine Republic (New Haven, CT, 1970), statistical appendix, Tables 39, 40, 133.
24. In Argentina economic - industrial decline was accompanied by rising nationalism [P. Waldmann, "Der Zweite Weltkrieg und die Entstehung des Peronismus," Vierteljahreshefte für Zeitgeschichte, Vol. 31, No. 2, pp. 181-201]. As for Russia, there is ample evidence of the "growth of a nep-imperialist mentality and of Russian chauvinism within the elites and the population" [Implementation of the Helsinki Accords, Hearings before the Commission on Security and Co-operation in Europe, Second session, Russia and its neighbours, 24 May 1994, USA Printing Office, Washington].
25. The aim of Perpnism was, of course, to decrease the distance between Argentina and the wealthy industrial countries. It did not, as alleged, from the start intend to sacrifice the economic for the political and the social. But the methods of economic control and guidance were so massive and so inept that Argentina did not narrow this gap to the wealthy countries; but fell behind them even further [F. Luetolt, Die argentinische Wirtschaftspolitik seit dem Zweiten Weltkrieg - Entstehung und Misserfolg des Peronistischen Dirigismus (Zürich 1957)].
26. Presently, capital flows in Latin America are de-stabilizing indeed; "more control would be useful" [L. Rojas Suarez and S. Weisbrod, "Achieving Stability in Latin American Financial Markets in the Presence of Volatile Capital Flows," Inter-American Development Bank, Working Paper 304 (April 1995)].
27. Satish Mishra, unpublished manuscript, Paris 1996.
28. As for empirical evidence on the "re-primitivisation" of the export structure of most transition countries, see M. Landesmann, "The Pattern of East - West European Integration: Catching Up or Falling Behind?," WIIW, Research Paper 212, January 1995.
29. Part of the disappointment of the Argentine working class resulted from their coming also under pressure from a massive rural - emigration in the years between 1930-1940. It destroyed the existing hierarchy of wages [G. Bourde, La classe ouvriere Argentine (Paris 1987)].
30. Note that in Eastern Europe, too, urbanization was very rapid in the time up to 1980. Also, in the pre-war period, wages of industrial workers in Argentina were only slightly below those paid in Germany or Great Britain [P. Waldmann, La classe ouvriere Argentine (op. cit., p. 183]. As is known, this did not last.
31. Hard though free marketers find it to admit, the success of both Taiwan and Korea is largely due to an active role of the state [W. Urban, "Economic Lessons for the East - European Countries from the Newly Industrialising Countries in the Far East", WIIW, Working Paper 182, 1992] "mixed economies...strong state...future orientation finds expression in plans...extensive use of subsidies."
32. "80 percent of the new Romanian millionaires were part of the nomenklatura" [R. Frydman a.o., "Capitalism with a Comrade's face," Transition, Vol. 2, No. 2, pp. 5-6].
33. Poverty in Poland, IBRD (Washington, 1994);
34. B. Fakin, "Patterns of Government Expenditure and Taxation in Transition, vs. OECD Economies," Leuven Institute for Central and East European Studies, Working Paper 46, 1995;
35. K. Mizei, Developing Public Finance in Emerging Market Economies (Boulder, CO: Institute for East-West Studies, 1994).
36. OECD, "Income Distribution in OECD Countries," OECD, Social Policy Studies. No. 18, Paris, 1995.
37. In Latin America, wealth accrued from rent seeking by the exploitation of agricultural and other natural resources. In Russia wealth has similar origins. It does not result from engagement in the industrial production [A. Aslund, "Reform vs. 'Rent-Seeking' in Russia's Economic Transformation," Transition, Vol. 2, No. 2, pp. 12-16].
38. "By early 1980, the income of the top fifth of the population exceeded that of the bottom fifth by a factor of 4.0 in Japan; 4.9 in Korea; 4.3 in Taiwan; 10.7 in the USA [A. Amsden, "Asia's Industrial Revolution," Dissent, Summer 1993].
39. B. Milanovic, "A Cost of Transition: 50 Million New Poor and Growing Inequality," Transition, Vol. 5, No. 8, 1994.
40. C. Lyrintzis ["Political Parties in Post-Junta Greece," in G. Pridham, The New Mediterranean Democracies; Regime Transition in Spain, Greece and Portugal (London, 1984)] coins the term "bureaucratic clientilism." It reflects the patterns of a pre-modem, feudal society; and has its counterparts not only in Latin America; but also in present day Eastern and Central Europe.
41. "The remaking of German political culture happened during the course of the Federal Republic; and not at its outset" [D. Conradt, "Changing German Political Culture," in G. Almond and S. Verba, The Civic Culture Re-Visited (Boston, 1980)].
42. Already the first "interim" agreements had established free trade on an asymmetric basis (customs reduction being faster on the side of the EU). Agriculture and a few industrial products were exempted from free trade and subject to quotas. Nearly all of this restrictions concerning the import of "sensitive" industrial products have, in the meantime, been lifted [W. Weidenfeld (ad), Mittel und Osteuropa auf dem Weg in die Europäishce Union (Bertelsmann Stiftung, Gütersloh 1995)].
43. NATO is not mentioned as one of the organizations that might tie the transition countries to the West. This is not an oversight; but in recognition of the fact that the NATO extension to the East - while decided in principle - is still not certain to occur.
44. R. Iorga ["Romanian Perspective on Security Risks," The International Spectator, Vol. 29, No. 4 (1994)] believes that these external constraints tie Romania so firmly to Western Europe, that it would have little leeway in deviating from a "Western" pattern - either in its external or in its internal policies.
45. Scholars disagree about the "true nature" and the economic - social base of Peronism. E. Kenworth ["The Function of a Little-Known Case in Theory Formation; or what Peronism wasn't," Comparative Politics, October 1973, pp. 17-45) defines Peronism as something that "simplifies pluralism to the point when the state could be strengthened and controversial decision implemented." But this definition seems to belittle the populist, anti-liberal, authoritarian aspect of Peronism, as well as its irrational economic policy.
46. S. Lipset [Political Man (Garden City, 1960) p. 171] defines Peronism as a "working class movement";
47. S. Huntington [Political Order and Changing Societies (New Haven, 1965), p. 155] as a "military government."
48. G. Bourde [Political Order and Changing Societies (op cit.] as "syndicalism etatise." These definitions seem closer to the truth. Whatever Peronism was, four things are certain: a) it was not based on a firm and coherent programme or ideology. Its "justice-sialism" was a mere mish-masn; b) It was anti-modernist - at least in its effects; c) it was predominately based upon dissatisfied workers; and d) it was, of course, non-democratic.
49. M. Roskin, "The Emerging Party System in Central and Eastern Europe," East European Quarterly; Vol. 27, No. 1 (1993), pp. 47-63.
50. Using the example of Latin America where politics are highly personalized under the prevailing presidential systems, J. Linz ["The Perils of Presidentialism," Journal of Democracy, Winter 1990] maintains that democracy is better served with a more pluralistic, and especially with a parliamentarian system.
51. This article does not deal with the Trans-Caucasian and Central-Asian successor states of the Soviet Union. Most of them are still further removed from being democratic. Turkmenistan even has reverted to a Stalinist type of totalitarianism [J. Laber, "The Dictatorship Returns," The New York Review of Books, July 15, 1993].
52. E. Hobsbawm, "The New Threat to History," The New York Review of Books, December 16, 1993.
53. Why have we dwelt upon the parallels between the formerly Communist countries and Latin America - and not compared them to those Southern European countries that converted to democracy two decades ago? For following reason: both in Latin America and among the formerly Communist countries, political transformation was intertwined with a far reaching economic transformation. In both cases these were connected with much hardship. This was not the case in Southern Europe [J. Nelson, Intricate Links: Democratisation and Market Reforms in Latin America and in Eastern Europe (New Brunswick, 1994)].