- Elgar original reference
Edited by David Parker and David Saal
Chapter 18: Privatization and Corporate Governance in the Czech Republic
Michal Mejstrík Introduction1 A characteristic feature of quickly transforming post-communist economies is the imbalance of their economic development arising from a stage of economic and social restructuring that can be described as a process of ‘creative destruction’ (if we are to paraphrase the concept introduced by Joseph Schumpeter in 1942). The imbalances are, on the one hand, caused by the conscious economic policy diagnosis of various participants in the political process; on the other hand, they themselves lead to the unfolding of unexpected new imbalances, the solution of which requires major new economic policy responses (see Mejstrík, 1997). The transition to a market economy inevitably has to include several aspects such as macroeconomic stabilization and trade and price liberalization. Privatization and the rapid formation of a private sector were added to this list by economic reformers as the only way to avoid the ‘reform pitfall’. The problems of this policy were most signiﬁcantly demonstrated in the key aspect of changes of ownership relations in strategic businesses. A privatization process which would gain and maintain the popular support of a substantial group of voters, and which at the same time would aﬀect the critical core of companies to a suﬃcient depth, was unable to be achieved in many transforming economies for an extensive period of time (for example, in Ukraine, but also in the Czech Republic, and to a lesser extent in Hungary: see Chapters 20 and 21). Except for demonopolization of their administratively formed monopoly...
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