Firms, Institutions, and Governance
7. Cluster Policy in the Czech Republic ______________________________________________________________ 7.1 INTRODUCTION Since the Velvet Revolution in 1989-90 and the subsequent separation from the Slovak Republic in 1993, the Czech Republic (CZ) has undergone a range of extensive and profound political and economic reforms. The CZ economy has grown since then, albeit not continuously (e.g. punctuated by the 1997-99 recession); although at a more accelerated pace since 2002. The process of catching up with the EU15 economies is visible in almost all indicators, however the living standards and average GDP per capita continue to be below 75% of the EU average (OECD 2006b). The sweeping economic and political reforms have taken place against the backdrop of a relative broad political consensus about market economy and liberal democracy, in a series of centre-right and centre-left government coalitions. For the present purposes, three of the most relevant reforms appear to be those that allowed private ownership (and subsequently the privatisation of state property), institutional development, and regional devolution. They were all initiated in the 1990s following the collapse of the centrally planned economy. The re-establishment of private ownership was a crucial aspect of economic and political reform in the post-communist era, as without it few of the phenomena explored in this chapter would have manifested. Private ownership made private investment possible and the privatisation of state property increased the size of private investments. In the CZ, the process of privatisation has covered many sectors and has followed the so-called voucher privatisation system, by which citizens...
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