Creating Capitalism

Creating Capitalism

Transitions and Growth in Post-Soviet Europe

Patricia Dillon and Frank C. Wykoff

Employing historical analysis and building on growth theory and modern political economy, Dillon and Wykoff explain Soviet disintegration and analyze efforts to create capitalism in newly independent states. They show how five fundamental economic reforms generate growth, and use an original model to test the connections between reforms, elections and economic performance. The authors examine the progress of six countries (Bulgaria, Czech Republic, Estonia, Hungary, Russia and Slovakia) in terms of each country’s history and its successful application of the five reforms. Anyone interested in how capitalism works and why pro-market reforms encounter resistance in spite of their potential for generating higher living standards will find this book essential reading.

Chapter 12: Will the Slovaks Stay the Course?

Patricia Dillon and Frank C. Wykoff


* When I was eight years old, Fascism came to Slovakia. When I was eighteen we got communism. Democracy didn’t come until I was already of retirement age. I never had the opportunity to be a democrat. Neither did most other Slovaks. (Lubomir Liptak, Historian, Slovak Academy of Sciences)1 The figures still don’t make their way down to people. People must feel the figures. (Mikulas Dzurinda, Slovak Prime Minister)2 During the Soviet period of domination of Central and Eastern Europe, Slovakia was an integral part of the multinational federation of Czechoslovakia. Its political history of the winning of independence from the Soviet Union is therefore substantially the same as that for the Czech Republic, from which it separated in 1993. For this reason we will not repeat the discussion (in Chapter 8) of the Velvet Revolution in 1989 and the 1993 Velvet Divorce. Slovakia has historic differences from the Czech Republic, both cultural and economic, and so the two countries have progressed in markedly different ways since the Divorce. Slovakia’s 5 million people live in an area of 50,000 square kilometers. In area, it exceeds Denmark, the Netherlands and Switzerland, and in population it is larger than Denmark, Finland and Ireland. It borders Austria, the Czech Republic, Hungary, Poland and Ukraine. About 84 percent of its people are Slovak. Their treatment of the Hungarian minority, around 11 percent of the population, has been a problem. It continues to improve, but slowly. As in most of Central Europe, discriminatory...

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