The Effects of Privatization of State-Owned Enterprises in Poland and East Germany

The main goal of this project was to propose appropriate methods of analysing the effects of the privatisation of state-owned enterprises, methods which were then tested on a limited sample of 16 Polish and 8 German enterprises privatised in 1992. A considerable amount of information was collected relating to the six-year period 1989-1994 relating to most aspects of the companies' activities. The effects of privatisation were taken to be those changes within the enterprises which were the result of privatisation, in such areas as production, the productivity of labour and fixed assets, investments and innovations, employment and wages, economic incentives (especially for top managers), financing (internal and external sources), bad debts and economic effects (financial analysis). A second important goal was to identify the main factors which represent methodological obstacles in surveys of the effects of privatisation during a period of fundamental transformation of the entire economic system. The list of enterprises for the research was compiled in such a way as to allow for the differentiation of ownership structures of privatised firms and to permit (at least to a certain extent) the empirical verification of some hypotheses regarding the privatisation process. The enterprises selected were divided into the following three groups representing (as far as possible) various types of ownership structures or types of control: (1) enterprises control by strategic investors (domestic or foreign), (2) enterprises controlled by employees (employee-owned companies), (3) enterprises controlled by managers. Formal methods such as econometric models with varying parameters were used to separate pure privatisation effects from other factors which influence various aspects of an enterprise's working, including policies on the productivity of labour and capital, average wages, the remuneration of top managers, etc. While the group admits that their findings and conclusions cannot be treated as representative of all privatised enterprises in Poland and Germany, they found considerable convergence with their findings and those of other surveys conducted on a wider scale. The main hypotheses that were confirmed included that privatisation (especially in companies controlled by large investors and managers) leads to a significant increase in the effectiveness of these production process, growing pay differentials between different employee groups (e.g. between executives and rank-and-file employees) and between different jobs and positions within particular professional groups. They also confirmed the growing importance in incentives to top executives of incentives linked with the company's economic effects (particularly profit-related incentives), long-term incentives and the capital market.

Central Europe in the Process of European Integration. A Comparative Study of the Strategies of the Czech Republic, Hungary, Poland and Slovakia towards the Deepening and Widening of the European Union

Membership of the European Union U is usually seen as a strategic goal of the associated states of central and eastern Europe. At the beginning of the 1990s central European countries, where the economic and political transformation was relatively advanced, received preferential treatment from the European Community, which was starting to evolve a policy of differentiation. Podraza studied the strategies of four central European countries towards changes under way in the European Union, analysing several aspects for each case: (1) the process of political transformation (2) decision-making structures in the field of foreign policy and European integration (3) integration strategies: (a) main foreign policy priorities (b) application for membership of the European Union (c) the Commission option on each country (d) accession partnership, including a National Programme for the Adoption of the Acquis (NPAA) (e) regular Commission reports (f) accession negotiations

Central Europeans towards Integration with the European Union: A Study of Public Opinion, Social Attitudes and National Identities

Since the turbulence of 1989, the countries of Central and Eastern Europe have striven to "return to Europe". Agreements have been signed with ten post-communist countries, beginning in 1991 with Czechoslovakia (before its division), Hungary and Poland. Since that time several countries have expressed a desire to become members of the EU. In 1997 the European Commission announced its opinion on the applications for EU membership of the Czech Republic, Hungary, Poland, Slovakia, and seven other applicant countries. The Commission recommended the commencement of negotiations on accession with the Czech Republic, Estonia, Hungary, Poland, and Slovenia. Mr. Kucia's report, presented in the form of a series of manuscripts totalling 91 pages, written in English and Polish and including many pages of tables and graphs, presents the results of a study of public opinion on European integration in four countries of Central Europe (CE): the Czech Republic (CZ), Hungary (H), Poland (PL), and Slovakia (SK). The research results are primarily based on a public-opinion survey known as the Central and Eastern Eurobarometer (CEEB). CEEB has been conducted on behalf of the European Commission in the Central and Eastern European countries each year in autumn since 1990. Below is a very small selection of Mr. Kucia's research findings. Throughout the 90s people in the four countries increasingly saw their countries' future tied up with the EU, since economic and political connections to the EU were growing and prospects for EU membership were increasing. Regional co-operation within CE did not gain much popular recognition. However, initially high levels of enthusiasm for the EU were gradually superseded by a more realistic approach or even scepticism. Poland was the exception in this respect; its population was more positive about the EU in 1996 than ever before. Mr. Kucia concludes that, since the political "elites" in CE are more positive about the EU than the people they serve, they should do their best to bring people round to their beliefs, lest the project of European integration become purely the business of the elites, as Mr. Kucia claims it has been in the EU up till now. He accuses the governments of the region, the EU authorities and the media of failing to provide appropriate information, especially about the two subjects which most affect them, association with the EU and the PHARE assistance programme. Respondents were asked to rank in order the countries or regions they saw their country's future most closely tied up with. In the period 92-96 the EU received the highest ratings in all of CE. The ratings were highest in CZ in 92 and 93 (46%) and in Poland in 96 (46%). They were the lowest in Hungary (22% in 94). After the EU came "Other Western European countries (non EU)", that is Austria, Sweden and Finland (before they joined the EU in 1995), Switzerland and Norway. Mr. Kucia puts the high ratings of these countries down to historical connections and geographical proximity, particularly in the case of Austria. The USA always came second in Poland, and in Hungary too its standing has always been higher than in CZ or SK. Indeed Mr. Kucia suggests that the USA's standing is disproportionately low in especially the CZ. Germany was nominated frequently by Hungarians, though in the CZ and SK, figures have been consistently low (1-2%). "Other CE/EE countries" increased their ratings in all of CE except Poland between 92 and 96. With regard to these last figures, Mr. Kucia makes an interesting note. Assuming that for the respondents in the four countries this category covered the Visegrad 4, least support was found in Poland, whose government was the most in favour of close political co-operation within the V4, while most support was in evidence in CZ and SK, for whose governments V4 was simply not a priority. Again, there is evidence of a divide between the political elites and the people. Russia has occupied a consistently modest rank. It was the highest in PL, fairly low in H and SK and the lowest in CZ. The Slovak government's policy of closer ties with Russia is reflected in a growth in the figures from 2% in 93 to 6% in 95. Every year the spontaneous answer "we should depend on ourselves" appeared, which Mr. Kucia interprets as either a sign of isolationism and disillusionment or as a call for self-reliance. Unfortunately he regards both these tendencies as unfeasible in the uniting Europe. Moving to more general conclusions, Mr. Kucia finds that the concept "Central Europe" does not have much meaning for Central Europeans. He believes that this is probably due to the failure to establish a viable regional co-operation network. Group discussions also revealed that people thought themselves European as a consequence of being Czech or Polish etc. Thus European identity is based on national identities. Generally within the surveyed period, the numbers of those who said they often think themselves European decreased, while the numbers of those who said they never think themselves European increased from 41% in PL, 36% in CZ, and 30% in H in 1990, to 67% in CZ, 58% in PL, and 51% in H in 1995.

Comparative Czech and Polish Perspectives and Policies on the Eastern Enlargement of the EU and the Prominence of the German Factor

With the end of the Cold War, which for central and eastern Europe in many respects meant the real political end to the Second World War, Germany regained its central position in the region. The Federal Republic quickly established itself as a major political and economic partner for both the Czech Republic and Poland. More importantly, due to its support for the idea of EU and NATO enlargement. Germany also became the most active western advocate of the Czech and Polish 'return to Europe'. The question remains, however, of whether Germany's relations with Poland and the Czech Republic can mature into a close axis like that enjoyed between Paris and Bonn/Berlin, or whether they will continue to develop along the lines of 'strategic congruence' but 'emotional mistrust and reserve'. The research here looked at three aspects of this question. First it considered the idea of a link between perceptions of Germany and broader considerations of European integration in Poland and the Czech Republic and outlined the ways in which Germany has motivated Czech and Polish activities and policies on EU membership. The team then focused upon on-going Czech and Polish EU integration strategies and sought to identify the actual ways in which Germany's advocacy of EU enlargement in manifest in cooperation 'on the ground'. The group concluded by considering prospects for Czech/German and Polish/German cooperation in the context of the enlarged European Union.

The Dynamics of the Policies of Ethnic Cleansing in Silesia in the Nineteenth and Twentieth Centuries

Through studying German, Polish and Czech publications on Silesia, Mr. Kamusella found that most of them, instead of trying to objectively analyse the past, are devoted to proving some essential "Germanness", "Polishness" or "Czechness" of this region. He believes that the terminology and thought-patterns of nationalist ideology are so deeply entrenched in the minds of researchers that they do not consider themselves nationalist. However, he notes that, due to the spread of the results of the latest studies on ethnicity/nationalism (by Gellner, Hobsbawm, Smith, Erikson Buillig, amongst others), German publications on Silesia have become quite objective since the 1980s, and the same process (impeded by under funding) has been taking place in Poland and the Czech Republic since 1989. His own research totals some 500 pages, in English, presented on disc. So what are the traps into which historians have been inclined to fall? There is a tendency for them to treat Silesia as an entity which has existed forever, though Mr. Kamusella points out that it emerged as a region only at the beginning of the 11th century. These same historians speak of Poles, Czechs and Germans in Silesia, though Mr. Kamusella found that before the mid-19th century, identification was with an inhabitant's local area, religion or dynasty. In fact, a German national identity started to be forged in Prussian Silesia only during the Liberation War against Napoleon (1813-1815). It was concretised in 1861 in the form of the first Prussian census, when the language a citizen spoke was equated with his/her nationality. A similar census was carried out in Austrian Silesia only in 1881. The censuses forced the Silesians to choose their nationality despite their multiethnic multicultural identities. It was the active promotion of a German identity in Prussian Silesia, and Vienna's uneasy acceptance of the national identities in Austrian Silesia which stimulated the development of Polish national, Moravian ethnic and Upper Silesian ethnic regional identities in Upper Silesia, and Polish national, Czech national, Moravian ethnic and Silesian ethnic identities in Austrian Silesia. While traditional historians speak of the "nationalist struggle" as though it were a permanent characteristic of Silesia, Mr. Kamusella points out that such a struggle only developed in earnest after 1918. What is more, he shows how it has been conveniently forgotten that, besides the national players, there were also significant ethnic movements of Moravians, Upper Silesians, Silesians and the tutejsi (i.e. those who still chose to identify with their locality). At this point Mr. Kamusella moves into the area of linguistics. While traditionally historians have spoken of the conflicts between the three national languages (German, Polish and Czech), Mr Kamusella reminds us that the standardised forms of these languages, which we choose to dub "national", were developed only in the mid-18th century, after 1869 (when Polish became the official language in Galicia), and after the 1870s (when Czech became the official language in Bohemia). As for standard German, it was only widely promoted in Silesia from the mid 19th century onwards. In fact, the majority of the population of Prussian Upper Silesia and Austrian Silesia were bi- or even multilingual. What is more, the "Polish" and "Czech" Silesians spoke were not the standard languages we know today, but a continuum of West-Slavic dialects in the countryside and a continuum of West-Slavic/German creoles in the urbanised areas. Such was the linguistic confusion that, from time to time, some ethnic/regional and Church activists strove to create a distinctive Upper Silesian/Silesian language on the basis of these dialects/creoles, but their efforts were thwarted by the staunch promotion of standard German, and after 1918, of standard Polish and Czech. Still on the subject of language, Mr. Kamusella draws attention to a problem around the issue of place names and personal names. Polish historians use current Polish versions of the Silesian place names, Czechs use current Polish/Czech versions of the place names, and Germans use the German versions which were in use in Silesia up to 1945. Mr. Kamusella attempted to avoid this, as he sees it, nationalist tendency, by using an appropriate version of a place name for a given period and providing its modern counterpart in parentheses. In the case of modern place names he gives the German version in parentheses. As for the name of historical figures, he strove to use the name entered on the birth certificate of the person involved, and by doing so avoid such confusion as, for instance, surrounds the Austrian Silesian pastor L.J. Sherschnik, who in German became Scherschnick, in Polish, Szersznik, and in Czech, Sersnik. Indeed, the prospective Silesian scholar should, Mr. Kamusella suggests, as well as the three languages directly involved in the area itself, know English and French, since many documents and books on the subject have been published in these languages, and even Latin, when dealing in depth with the period before the mid-19th century. Mr. Kamusella divides the policies of ethnic cleansing into two categories. The first he classifies as soft, meaning that policy is confined to the educational system, army, civil service and the church, and the aim is that everyone learn the language of the dominant group. The second is the group of hard policies, which amount to what is popularly labelled as ethnic cleansing. This category of policy aims at the total assimilation and/or physical liquidation of the non-dominant groups non-congruent with the ideal of homogeneity of a given nation-state. Mr. Kamusella found that soft policies were consciously and systematically employed by Prussia/Germany in Prussian Silesia from the 1860s to 1918, whereas in Austrian Silesia, Vienna quite inconsistently dabbled in them from the 1880s to 1917. In the inter-war period, the emergence of the nation-states of Poland and Czechoslovakia led to full employment of the soft policies and partial employment of the hard ones (curbed by the League of Nations minorities protection system) in Czechoslovakian Silesia, German Upper Silesia and the Polish parts of Upper and Austrian Silesia. In 1939-1945, Berlin started consistently using all the "hard" methods to homogenise Polish and Czechoslovakian Silesia which fell, in their entirety, within the Reich's borders. After World War II Czechoslovakia regained its prewar part of Silesia while Poland was given its prewar section plus almost the whole of the prewar German province. Subsequently, with the active involvement and support of the Soviet Union, Warsaw and Prague expelled the majority of Germans from Silesia in 1945-1948 (there were also instances of the Poles expelling Upper Silesian Czechs/Moravians, and of the Czechs expelling Czech Silesian Poles/pro-Polish Silesians). During the period of communist rule, the same two countries carried out a thorough Polonisation and Czechisation of Silesia, submerging this region into a new, non-historically based administrative division. Democratisation in the wake of the fall of communism, and a gradual retreat from the nationalist ideal of the homogeneous nation-state with a view to possible membership of the European Union, caused the abolition of the "hard" policies and phasing out of the "soft" ones. Consequently, limited revivals of various ethnic/national minorities have been observed in Czech and Polish Silesia, whereas Silesian regionalism has become popular in the westernmost part of Silesia which remained part of Germany. Mr. Kamusella believes it is possible that, with the overcoming of the nation-state discourse in European politics, when the expression of multiethnicity and multilingualism has become the cause of the day in Silesia, regionalism will hold sway in this region, uniting its ethnically/nationally variegated population in accordance with the principle of subsidiarity championed by the European Union.

The Redistribution of Property Rights, Corporate Governance and Company Restructuring after Privatisation"

The project covered the main issues of privatisation, corporate governance and company restructuring after privatisation in Hungary and in the Russian Republic, together with a summary of the broader picture of company-level changes in Central and Eastern Europe, discussing the issues of micro-financial restructuring in the Czech Republic, Hungary, Poland and Slovakia. The two countries selected as the focus of research can be regarded as the two most widely differing cases of the economic transformation in Central and Eastern Europe. Hungary began its transition very early in 1989, while Russia was very late in doing so. Hungary first implemented a series of institutional and systemic reforms before stabilising its public finances, while Russia has struggled with financial stabilisation for years without great success. Company restructuring and the introduction of new forms of governance only began in Russia in the mid-1990s. Hungary opted for "traditional" western methods of privatisation and invited a large amount of foreign direct investment (FDI) while in Russia the bulk of state-owned property was privatised either by free distribution or by a strange blend of ESOP-MBO schemes. FDI in Russia remained modest because of the high risk and uncertainty surrounding economic transactions there. Hungary was a forerunner in privatising public utilities, while Russia has moved cautiously in this area. The group's studies show that the Hungarian economy is now over the "transformation recession" and its economic success is largely due to its successful privatisation and to the dominant participation of foreign investors in company take-overs and in the restructuring process. The study of Russia provides a comprehensive account of the main factors in the so-far modest results in Russian privatisation and economic transformation.