Contested Concepts, Contested Experiences
Edited by Wilfred Dolfsma and Charlie Dannreuther
Chapter 4: Transformation, integration and inequality: the case of the Czech Republic
17307_Globalisation/Chap 4 05/03/2003 9:30 am Page 1 4. Transformation, integration and inequality: the case of the Czech Republic1 Milan Sojka Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes a by-product of the activities of a casino, the job is likely to be ill-done. (Keynes, 1953, p. 159) The original Czech neo-liberal transformation strategy failed to achieve its promised goals. This chapter argues that this was because of the failure of neo-classically inspired reforms to recognize the importance of key social institutions in economic reform. It is divided into three parts. First I look at the central tenets of the Czech neo-liberal transformation strategy. I then point to effects on two selected topics that may serve as good indicators of the problematic outcomes of the Czech neo-liberal transformation strategy. The second part deals with the reintegration of the Czech economy into the World economy during the 1990s. Among the issues of concern are a general macroeconomic performance that is worse than expected, private property rights that are not respected, slowly improving living standards, a tendency to rely on cheap labour as the most important comparative advantage and (thus) a slow modernization process generally. Prospects for the Czech economy for the medium to long term are still bleak. A third section shows the effects of the neo-liberal transformation on earnings and incomes distribution. An analysis of income distribution changes during the 1990s may serve as an indicator...
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