The Prosperity Border –

Post-Cold War Transitions in Eastern Europe

“Ten years after the fall of the Berlin Wall, Europe must not be divided by a ‘prosperity border’ between the European Union and its eastern neighbours.”[1] These comments, made by German Chancellor Gerhard Schroeder at the 10^th Anniversary Ceremony marking the fall of the Wall, served as a subtle indication that not all barriers between Eastern and Western Europe had been swept away by the collapse of the Cold War. Indeed the political and economic transitions in Eastern Europe have left many ordinary people disillusioned with the initial euphoria of change, which East German residents had considered then to be a “dream for [them], a storybook tale.”[2] In examining the political and economic transitions in Eastern Europe, it is therefore important to consider the pre-transition conditions and their impact on the changes in these societies as well as on the expectations of the people. Consequently, this paper proposes that the post-Cold War transitions in Eastern Europe have been unable to meet the expectations of the people because they have been shackled by the communist past, and also been unable to effect a “total” and “determined” effort at political and economic reform.

The legacy of the Eastern Europe communist past can be seen in the entrenched nature of state socialism, which can be reflected in the three main types of post-communist societies emerging from communist rule – a traditional society, a society brought into being by communism, and a “liberal” society.[3] Aspects of all three societies can be seen in differing degrees within Eastern European states, with the extent of variation affecting the nature of the post-communist transition. Therefore, in order to study the impact of communism on Eastern Europe, it is important to consider how communism affects each type of society and the degree to which each society is rooted in the countries of the region.

In a traditional society, pre-communist peasant values such as collectivisation, hierarchy and political apathy survived the changes of communism. This was despite forcible attempts at communist modernisation.[4] In Poland for instance, evidence of the peasantry nature can be seen in that communism had failed to complete collectivisation in the 1950s and 1960s, forcing Stalin to concede that “communism fits Poland like a saddle fits a cow”.[5] As a result of the negative experience imposed by communism on traditional societies, the post-communist industrialisation by the West was viewed in a similar light, and dismissed by the people as a “triumph of the hated and sinful city” over the “pure and authentic values” of the countryside.[6]

A second category of post-communist society was brought about by communism, possessing characteristics that are state-dependent. This resulted due to the “hyper-étatism” of communism, which led people to believe that the state is the best guarantor of both individual and collective wellbeing.[7] With the collapse of communism, this firm belief in the state was replaced by a rapid ideological “conversion” to nationalism, as leaders found that such a move could fill the political vacuum left vacant by communism as well as maintain their power.[8] This can be seen distinctly in the Yugoslav province of Serbia, which has been pursuing its brand of ethno-nationalism to fill the political vacuum caused by the collapse of Tito’s communism. Indeed, as George Schöpflin argues, nationalism and its notions of “ethnic purification” run contrary to the conditions for modernity in the 20^th Century, where urbanisation and mobility are pre-requisites.[9] This is because practises of “ethnic purification” unleash destructive energies both disrupting societal mobility and creating tensions in society that suspend urbanisation efforts.

The “liberal” society, the third type of post-communist society, is characterised by its “openness” to new ideas and to the market in the pre-communist era. Although the communist revolution displaced this system with central planning, such a trade ethos was kept alive by the rise of a secondary economy in the 1970s and 1980s, where the workers were given some degree of freedom to market their skills.[10] Evidence of such a society can be seen in Hungary, where communist leaders in the 1960s negotiated a “social compact” with the people, promising increased living standards and a depoliticisation of social life in exchange for their acceptance of one-party communist rule.[11] As “liberal” societies are predisposed towards a market economy, their post-communist economic transitions tend to be more successful, favouring the rise of capitalism.

Considering the effect of communism on Eastern Europe in general, it can be concluded that countries with a greater degree of the “liberal” society tend to be more successful in their post-communist transition to capitalism and democracy. However, such countries are few numerically and even if they exist, tend to embark on reforms that are neither “total” nor “determined”.

In arguing that post-communist countries were not able to effect “total” reforms, it is maintained that such reforms were not genuine in seeking a new transition order, but were merely an attempt to look back at the pre-established status quo. Indeed the collapse of communism led to Eastern Europe resuming the “modus operandi” of politics and economics in the pre-communist era.[12] This can be explained in that the region did not undertake all the political and economic reforms necessary in effecting a sustained political transition.

Fundamental changes in political reform are important especially in the decentralisation of political authority. This is because it stimulates political and economic competition, increases local political participation, and at the same time limits the possible mistakes due to new transition experiences.[13] In addition, radical changes to the education system are also necessary in order to change inherent aspects of Eastern European culture, values and behaviour.[14] However such fundamental political changes are difficult to implement because of the diverse aspirations, ideals and expectations among the new elites and societies of post-communist Eastern Europe, which had previously been homogenised under communist thought.[15]

In the post-communist era, a failure to embark on fundamental political change resulted in problems of vested interests in the bureaucracy and political detachment from social concerns. By not effecting a complete restructuring of the political elite, many influential people in the previous regime continued to wield sufficient power to defend their interests, resulting in policies that were biased towards them.[16] Related to this issue was the sizeable number of bureaucracies that comprised largely of members of the intelligentsia. The drawing of the intelligentsia into the political elite questioned the autonomy of independent thought and its objectivity. There were also concerns that the abstract nature of political discourse among members of this political elite erected a barrier that isolated the everyday concerns of the people.[17]

The importance of “total” economic reforms can be attributed to the significance of dispersing economic power. This is because such reforms result in the removal of forces that maintain an interest in preserving state control, favouring greater economic autonomy and a more lasting democracy.[18] In addition, it is also critical to reform education and the mass media so as to inculcate the population with ideas of a new business culture.[19] This is essential in that it prepares society for the conduct of capitalism and familiarises people with the practises of the market economy. However, Eastern Europe was unable to effect such fundamental changes in post-communist economic reform largely due to a lack of experience. For instance it did not possess a tradition of entrepreneurship nor the institutions necessary for an effective market economy.[20] Moreover, many governments found it difficult to cope with the high political and social costs associated with the transitions to a market economy, such as the high levels of inflation and unemployment, as well as rising health care and education costs.[21]

In failing to undertake fundamental economic change, Eastern European states exposed themselves to problems such as a lack of confidence from the international business community. This stemmed from an absence of clear rules governing the market and the lack of a culture that respects an institutional economic framework.[22] In addition, the lack of distinct market laws and institutions also serve to entrench communist-era managers who still retain control over former state firms, resulting in problems of corruption and incompetence.[23]

Supplementing the need for “total” reform in Eastern Europe, there is also a need for “determined” reforms in the region. This refers to the willpower of the region’s leadership and population to persist with the political and economic changes despite the short-term disadvantages associated with systemic change. Indeed the initial euphoria associated with post-communist transition quickly gave way to disappointment among the populace, largely due to the problems associated with economic transition, such as poverty and income inequality. Instances of poverty were especially due to the lack of financial savings among the pensioners, who had saved minimally under the communist system. This brought about a recurrent problem for the children, whose support of their ageing parents also resulted in a low saving rates.[24] Visible aspects of income inequality also fuelled the dissatisfaction of the people, as it produced a “relative deprivation” that seemed more tangible than under the communist system.[25]

The inability of the newly-elected governments to increase the standard of living led to an “impatience” and “radicalism” among the population, as they expected the state to be able to “bail out the individual” in such circumstances.[26] This lack of a “determined” effort to reform can be seen in the population’s lack of trust in the political and economic institutions, preferring instead to believe in personal relations, which was a legacy from a popular lack of trust in the communist system.[27] Indeed the inconsistent nature of the people can be seen in their “irresponsible” political behaviour, with about three in four voters in the mid-1990s proving to be fickle in their support of partisan interests.[28] Moreover, disillusionment with the capitalist system had led Eastern European countries to support parties that combined elements of communism with capitalism in the economy and other spheres of national life.[29]

By reacting in such a manner, it can be argued that the people failed to understand the nature of economic interactions in a market situation, and merely had the simplistic idea of the market as a “symbol of prosperity”.[30] As former Polish President Lech Welasa argues, the general drift towards democracy was correct. However, society was more interested in the system’s effectiveness, and not the “beautiful assumptions” behind democracy, which they felt was proceeding too slowly.[31] Hence, it can be reasoned that the post-communist transitions in Eastern Europe take time, and according to former US National Security Adviser Zbigniew Brzezinski, involve three distinct phases that could last over fifteen years.[32] Brzezinski emphasises that each phase must be completed successfully in order for the next phase to proceed. For instance, the critical first phase, which can be completed within one to five years, requires a fundamental change in the established economic and political process. Only then can the second phase be undertaken, estimated to last between three to ten years, and with the goals of broader political stabilisation and a more pervasive economic transformation. This will then pave the way for the third phase, lasting between five to fifteen years or more, during which comprehensive democratic institutions can begin to endure and economic growth can become sustained.[33]

Considering the post-communist transitions in Eastern Europe, it can be seen that the region’s lack of “total” reform resulted in its failing to complete even the first of the Brzezinski phases, involving fundamental changes in politics and the economy. This implies that the region had failed to complete a successful transformation process that would have aided it to bridge the barriers isolating it from Western Europe. Moreover, by lacking a “determined” attitude towards reform, the region had indicated its intentions not to undertake a complete transformation as outlined in the Brzezinski phases.

In conclusion, the post-Cold War transitions in Eastern Europe have indeed failed to meet the expectations of the people as they have been trapped in communist mindsets of the past, and have failed to undertake “total” and “determined” reforms. In exploring a solution to this issue, it is of paramount importance that Eastern Europe exhibits a desire for “total” and “determined” reforms, so as to embark on a successful transformation process as outlined by Brzezinski. The former US National Security Adviser had therefore suggested a “long-range mobilizing vision” to include the establishment of defined political and economic institutions as a means to effect such a transformation.[34] This view, although articulated in the early 1990s, in still relevant today as Eastern Europe is still practising “personalized politics”, and has yet to establish the institutions that have earned the trust of the people.[35] Consequently, it is essential that such institutional changes be made in order for the region to bridge the “prosperity border” with Western Europe, and integrate itself into the larger European community.  

The above essay was written by Mark Lim Shan-Loong on 14th March 2000.

Bibliography

Brzezinski, Zbigniew, “The Great Transformation”, The National Interest, No. 33, Fall 1993, 3-13.

 Cohen, Roger, “For the Wall’s fall, East Germans are given their due”, The New York Times, 10 November 1999, Online, Available: http://www.nytimes.com/library/world/europe/111099berlin-anniversary.html, 24 Feb 2000.

 Erlanger, Steven, “A Decade after Triumph, Havel is Chrushed Velvet”, The New York Times, 4 November 1999, Online, Available: http://www.nytimes.com/library/world/europe/110499czech-havel.html, 24 Feb 2000. 

Lyle, Robert, “The East:  IMF Officials call for Improved Privatization Process”, Radio Free Europe/Radio Liberty, 5 February 1999, Online, Available: http://www.rferl.org/nca/features/1999/02/F.RU.990205134318.html, 8 Mar 2000.

 Mason, David S., “Poland”, Developments in East European Politics, Eds. Stephen White et al., Macmillan: London, 1993, 36-50.

 Protzman, Ferdinand, “A Day Trip through the Wall; Family says of the West, “It’s a Dream””, The New York Times, 11 November 1989, The Collapse of Communism, Eds. Bernard Gwertzman and Michael T. Kaufman, Times Books and Random House: New York and Toronto, 1990, 190-3.

 Schöpflin, George, “Culture and Identity in Post-Communist Europe”, Developments in East European Politics, Eds. Stephen White et al., Macmillan: London, 1993, 16-34.

 ---, “The Problem of Nationalism in the Post-Communist Order”, Bound to Change:  Consolidating Democracy in East Central Europe, Ed. Peter M. E. Volten, Institute for EastWest Studies: New York and Prague, 1992, 27-41.

 Swain, Nigel, “Hungary”, Developments in East European Politics, Eds. Stephen White et al., Macmillan: London, 1993, 66-82.

 Synovitz, Ron, “The East:  Changes Needed in Corporate Governance, says EBRD”, Radio Free Europe/Radio Liberty, 3 November 1997, Online, Available: http://www.rferl.org/nca/features/1997/11/F.RU.971103153946.html, 8 Mar 2000.

 Walesa, Lech, “I see the Commies, I see the clever guys doing well”, The New York Times, 7 November 1999, Online, Available: http://www.nytimes.com/library/magazine/home/19991107mag-europe-walesa.html, 24 Feb 2000.

 White, Stephen, “Eastern Europe after Communism”, Developments in East European Politics, Eds. Stephen White et al., Macmillan: London, 1993, 2-15.

 Wyzan, Michael, “Increased Inequality, Poverty Accompany Economic Transition”, Transition, Vol.2, No. 20, 4 October 1996, Online, Institute for Journalism in Transition, Available: http://www.tol.cz/publications/transition/Features/Feature.V02N20-Wyzan.html, 7 Mar 2000.

 Zuzowski, Robert, Political Change in Eastern Europe since 1989:  Prospects for Liberal Democracy and a Market Economy, London: Praeger, 1998.