The Czech Republic from the Perspective of the Varieties of Capitalism Approach

Modern capitalism is not singular. There are varieties of capitalism in the contemporary world. This thesis aims to apply the Varieties of Capitalism approach developed by Hall and Soskice (2001) to the case of the Czech Republic and ascertain whether the Czech market economy is approaching a liberal or a coordinated ideal type defined by these authors. At the same time, such findings might provide an answer to whether the Varieties of Capitalism approach designed for advanced industrialized economies is fully applicable for analysis of a post-socialist country that underwent a complicated process of economic and institutional transformation.

Is the Czech economy a success story?: the case of CzechInvest, the strategic promotion agency in Czech industrial restructuring

Includes Bibliography

Talents in Migration Processes in the Conditions of the Czech Republic of the Nineties

The transformation of the 1990s has had a bearing on the academic and scientific world, as is becoming increasingly obvious with the changing numbers of foreign students wishing to study in the Czech Republic and of Czech students wishing to study abroad, the virtual collapse of doctoral studies, and the rapidly increasing age of Czech academics (placed at 48 by official sources and at rather more by this research). At the same time there is an apparent lack of interest in analysing and understanding these trends, which Mr. Cermak terms an ostrich policy, although his research showed that academics are in fact both aware and concerned about them. The mid-1990s migration of talent to and from R+D in the Czech Republic is also reflected in the number of talented Czech students studying abroad, who represent the largest and most interesting group of actual and potential migrants. Mr. Cermak's study took the form of a Delphi enquiry participated in by 44 specialists, including experts in the problems of higher education and science policy from the Presidium of the Higher Education Council (n = 23), members of the Council's Science and Research Commission (n = 14), former and current managers of higher education authorities (n = 4) and selected participants of the longitudinal talent research (n = 3). Questions considered included the influence of continuing talent migration from domestic R+D on the efficiency of domestic higher education, the diversification of forms of the brain drain and their impact on other processes in society, the possibility of positive influence on the brain drain processes to minimise the risks it presents, and the use of the knowledge obtained about the brain drain. The study revealed a clear drop of interest in brain drain problems in higher education in the mid-1990s, which is probably related to the collapsed of Czech R+D in the field of talent education. The effects on this segment of the labour market appeared earlier, with a major migration wave in 1991-1993 which significantly "cleared" the area of scientific talent. In addition, prospective talents from the ranks of younger students have not been integrated into domestic R+D, leading to the increasing average age of those working in this field. "Talent scouting" tended to be oriented towards much younger individuals, even in some cases towards undergraduate students. The R+D institutions deprived of human resources considered as basic in a functional R+D system have lost much of their dynamism and so no longer attract not only domestic talent but also talent from other regions. As a result the public, including the mass media and political structures, have stopped regarding the support of domestic science as a priority. This is clear both among the young people who are important for the future development of R+D (support for the education of talented children has dropped), from the drop in the prestige of this area as a profession among university students, and from the lack of explicit support for R+D by any of the political parties. On the basis of his findings Mr. Cermak concludes that there is no basis for the belief that the brain drain will represent a positive force in stimulating the development of the open society. Migration data shows that the outflow of talent from the Czech Republic far exceeds the inflow, and that the latter is largely short-term. Not only has the number of returning Czech professors dropped to half of its level at the beginning of the 1990s, but they also tend to take up only short-term contracts and retain their foreign positions. Recruitment of scientific talent from other countries, including the Slovak Republic, is limited. Furthermore internal contacts between those already involved in R+D have been badly hit by economic pressures and institutional co-operation has dropped to a minimum. There have been few moves to counteract this situation, the only notable one being the Program 250, launched in 1996 with government support to try and attract younger (i.e. under 40) talent into R+D. Its resources are however limited and its effects have not so far been evaluated. The deficit of academic and scientific talent in the Czech Republic is increasing and two major directions of academic work are emerging. Classic higher education science based on the teaching process is declining, largely due to economic factors, while there is an increasing emphasis on special; ad hoc projects which cannot be related directly to teaching but are often interesting to specialists outside the Czech Republic. This is shown clearly by the increase in publishing and in participation in domestic and foreign grant projects, which often serve to supplement the otherwise low salaries in the higher education sector. This tend was also accelerated by the collapse of applied R+D in individual sectors of the national economy and by substantial cutbacks in the Czech Academy of Sciences, which formerly fostered such research. Some part of the output of this research can be used in the education system and its financial contribution does significantly affect the stability of the present staff, but Mr. Cermak sees it as generally unfavourable for the development of talent education. In addition, it has led to a certain resignation on the question of integration into international structures, due to the emphasis on short-term targets, commercial advantages and individualism rather than team work. At the same time, he admits that these developments reflect those in other areas of the transformation in the Czech Republic.

Czech Syllabic-Accentual Metres (1795-1914)

This project was part of a major research project into Czech verse texts from the National Revival to the present and looked at two groups of topics from the theory and history of Czech verse. The first was the rhythm of iambic and trochaic trimeter and trochaic hexameters, with a typological distinction of variants due to individual and generational arising. The rhythmic contours of 63 sets of verses were described statistically and differences in the frequency of stresses on strong and weak positions of the metre were identified. The second part of the project concerned the Czech dactyl. The history of triple metres ranging from poets of the Enlightenment to the present day underground writer Krchovsky were traced in detail. Along with the rhythm and technique of verse, the group analysed the semantics of dactylic metres of different extents (dimeters, trimeters, etc.) and their relationships to literary genres and trends. Their findings differ totally from the assumptions of traditional metrics. A general metrical norm of dactylic verses was defined within the system of rules of correspondence by the method of generative metrics. They established a typology, specified the frequency of divergences from the norm in a range of texts and investigated their role in the style and rhythmic differentiation of poetic works.

Immigrants in the Czech Republic (With Special Reference to Ukrainian Workers and "Western" Firms Operating in Prague)

International migration has increased rapidly in the Czech Republic, with more than 150,000 legally registered foreign residents at the end of 1996. A large proportion of these are in Prague - 35% of the total in December 1996. The aim of this project was to enrich the fund of information concerning the "environment", reasons and "mechanisms" behind immigration to the Czech Republic. Mr. Drbohlav looked first at the empirical situation and on this basis set out to test certain well-known migration theories. He focused on four main areas: 1) a detailed description and explanation of the stock of foreign citizens legally settled in Czech territory, concentrating particularly on "economic" migrants; 2) a questionnaire survey targeting a total of 192 Ukrainian workers (98 in the fall 1995 and 94 in the fall 1996) working in Prague or its vicinity; 3) a second questionnaire survey of 40 "western" firms (20 in 1996 and 20 in 1997) operating out of Prague; 4) an opinion poll on how the Czech population reacts to foreign workers in the CR. Over 80% of economic immigrants at the end of 1996 were from European countries, 16% from Asia and under 2% from North America. The largest single nationalities were Ukrainians, Slovaks, Vietnamese and Poles. There has been a huge increase in the Ukrainian immigrant community over both space (by region) and time (a ten-fold increase since 1993), and at 40,000 persons this represents one third of all legal immigrants. Indications are that many more live and work there illegally. Young males with low educational/skills levels predominate, in contrast with the more heterogeneous immigration from the "West". The primary reason for this migration is the higher wages in the Czech Republic. In 1994 the relative figures of GDP adjusted for parity of purchasing power were US$ 8,095 for the Czech Republic versus US$ 3,330 for the Ukraine as a whole and US$ 1,600 for the Zakarpatye region from which 49% of the respondents in the survey came. On an individual level, the average Czech wage is about US$ 330 per month, while 50% of the Ukrainian respondents put their last monthly wage before leaving for the Czech Republic at under US$ 27. The very low level of unemployment in the latter country (fluctuating around 4%) was also mentioned as an important factor. Migration was seen as a way of diversifying the family's source of income and 49% of the respondents had made their plans together with partners or close relatives, while 45% regularly send remittances to Ukraine (94% do so through friends or relatives). Looking at Ukrainian migration from the point of view of the dual market theory, these migrants' type and conditions of work, work load and earnings were all significantly worse than in the primary sector, which employs well educated people and offers them good earnings, job security and benefits. 53% of respondents were working and/or staying in the Czech Republic illegally at the time of the research, 73% worked as unqualified, unskilled workers or auxiliary workers, 62% worked more than 12 hours a day, and 40% evaluated their working conditions as hard. 51% had no days off, earnings were low in relation to the number of hours worked. and 85% said that their earnings did not increase over time. Nearly half the workers were recruited in Ukraine and only 4% expressed a desire to stay in the Czech Republic. Network theories were also borne out to some extent as 33% of immigrants came together with friends from the same village, town or region in Ukraine. The number who have relatives working in the Czech Republic is rising, and many wish to invite relatives or children to visit them. The presence of organisations which organised cross-border migration, including some which resort to organising illegal documents, also gives some support for the institutional theory. Mr. Drbohlav found that all the migration theories considered offered some insights on the situation, but that none was sufficient to explain it all. He also points out parallels with many other regions of the world, including Central America, South and North America, Melanesia, Indonesia, East Africa, India, the Middle East and Russia. For the survey of foreign and international firms, those chosen were largely from countries represented by more than one company and were mainly active in market services such as financial and trade services, marketing and consulting. While 48% of the firms had more than 10,000 employees spread through many countries, more than two thirds had fewer than 50 employees in the Czech Republic. Czechs formed 80% plus of general staff in these firms although not more than 50% of senior management, and very few other "easterners" were employed. All companies absolutely denied employing people illegally. The average monthly wage of Czech staff was US$ 850, with that of top managers from the firm's "mother country" being US$ 6,350 and that of other western managers US$ 3,410. The foreign staff were generally highly mobile and were rarely accompanied by their families. Most saw their time in the Czech Republic as positive for their careers but very few had any intention of remaining there. Factors in the local situation which were evaluated positively included market opportunities, the economic and political environment, the quality of technical and managerial staff, and cheap labour and low production costs. In contrast, the level of appropriate business ethics and conduct, the attitude of local and regional authorities, environmental production conditions, the legal environment and financial markets and fiscal policy were rated very low. In the final section of his work Mr. Drbohlav looked at the opinions expressed by the local Czech population in a poll carried out at the beginning of 1997. This confirmed that international labour migration has become visible in this country, with 43% of respondents knowing at least one foreigner employed by a Czech firm in this country. Perception differ according to the region from which the workers come and those from "the West" are preferred to those coming from further east. 49% saw their attitude towards the former as friendly but only 20% felt thus towards the latter. Overall, attitudes towards migrant workers is neutral, although 38% said that such workers should not have the same rights as Czech citizens. Sympathy towards foreign workers tends to increase with education and the standard of living, and the relatively positive attitudes towards foreigners in the South Bohemia region contradicted the frequent belief that a lack of experience of international migration lowers positive perceptions of it.

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 Permanent Income Hypothesis: A Test on Czech Privatisation

Since the late eighties, economists have been regarding the transition from command to market economies in Central and Eastern Europe with intense interest. In addition to studying the transition per se, they have begun using the region as a testing ground on which to investigate the validity of certain classic economic propositions. In his research, comprising three articles written in English and totalling 40 pages, Mr. Hanousek uses the so-called "Czech national experiment" (voucher privatisation scheme) to test the permanent income hypothesis (PIH). He took as his inspiration Kreinin's recommendation: "Since data concerning the behaviour of windfall income recipients is relatively scanty, and since such data can constitute an important test of the permanent income hypothesis, it is of interest to bring to bear on the hypothesis whatever information is available". Mr. Hanousek argues that, since the transfer of property to Czech citizens from 1992 to 1994 through the voucher scheme was not anticipated, it can be regarded as windfall income. The average size of the windfall was more than three month's salary and over 60 percent of the Czech population received this unexpected income. Furthermore, there are other reasons for conducting such an analysis in the Czech Republic. Firstly, the privatisation process took place quickly. Secondly, both the economy and consumer behaviour have been very stable. Thirdly, out of a total population of 10 million Czech citizens, an astonishing 6 million, that is, virtually every household, participated in the scheme. Thus Czech voucher privatisation provides a sample for testing the PIH almost equivalent to a full population, thus avoiding problems with the distribution of windfalls. Compare this, for instance with the fact that only 4% of the Israeli urban population received personal restitution from Germany, while the number of veterans who received the National Service Life Insurance Dividends amounted to less than 9% of the US population and were concentrated in certain age groups. But to begin with, Mr. Hanousek considers the question of whether the public percieves the transfer from the state to individual as an increase in net wealth. It can be argued that the state is only divesting itself of assets that would otherwise provide a future source of transfers. According to this argument, assigning these assets to individuals creates an offsetting change in the present value of potential future transfers so that individuals are no better off after the transfer. Mr. Hanousek disagrees with this approach. He points out that a change in the ownership of inefficient state-owned enterprises should lead to higher efficiency, which alone increases the value of enterprises and creates a windfall increase in citizens' portfolios. More importantly, the state and individuals had very different preferences during the transition. Despite government propaganda, it is doubtful that citizens of former communist countries viewed government-owned enterprises as being operated in the citizens' best interest. Moreover, it is unlikely that the public fully comprehended the sophisticated links between the state budget, state-owned enterprises, and transfers to individuals. Finally, the transfers were not equal across the population. Mr. Hanousek conducted a survey on 1263 individuals, dividing them into four monthly earnings categories. After determining whether the respondent had participated in the voucher process, he asked those who had how much of what they received from voucher privatisation had been (a) spent on goods and services, (b) invested elsewhere, (c) transferred to newly emerging pension funds, (d) given to a family member, and (e) retained in their original form as an investment. Both the mean and the variance of the windfall rise with income. He obtained similar results with respect to education, where the mean (median) windfall for those with a basic school education was 13,600 Czech Crowns (CZK), a figure that increased to 15,000 CZK for those with a high school education without exams, 19,900 CZK for high school graduates with exams, and 24,600 CZK for university graduates. Mr. Hanousek concludes that it can be argued that higher income (and better educated) groups allocated their vouchers or timed the disposition of their shares better. He turns next to an analysis of how respondents reported using their windfalls. The key result is that only a relatively small number of individuals reported spending on goods. Overall, the results provide strong support for the permanent income hypothesis, the only apparent deviation being the fact that both men and women aged 26 to 35 apparently consume more than they should if the windfall were annuitised. This finding is still fully consistent with the PIH, however, if this group is at a stage in their life-cycle where, without the windfall, they would be borrowing to finance consumption associated with family formation etc. Indeed, the PIH predicts that individuals who would otherwise borrow to finance consumption would consume the windfall up to the level equal to the annuitised fraction of the increase in lifetime income plus the full amount of the previously planned borrowing for consumption. Greater consumption would then be financed, not from investing the windfall, but from avoidance of future repayment obligations for debts that would have been incurred without the windfall.

The Recent Structure of Wages in the Czech Republic

The project drew on an extensive firm-level sample of employees to describe in detail the recent evolution of the structure of wages in the Czech Republic between 1995 and 1998. The results of the analysis were then compared with information from EU countries. Regression analysis was used to study a number of specific questions, with particular emphasis being paid to proper weighting of the sample. Jurajda first quantified the effects on male and female hourly wages in the Czech Republic of worker age and education, firm size, region, industry and ownership type. He then examined whether these effects have been changing over time and how they differ by gender, and identified those industrial sectors that carry the largest wage premiums not accounted for by worker or firm characteristics, and measured the effect of unemployment on wages. He found a substantial increase in returns on human capital, with the earning differentials for education increasing substantially between 1995 and 1998, with these gains being largely comparable to those in western countries. Overall, the Czech structure of wages is now very responsive to market forces and is converging rapidly on EU-type flexibility in almost every dimension. It is likely, however, that due to the constrained supply of tertiary-educated workers in particular, the returns on education may keep on rising, surpassing levels typical of western economies and potentially reaching the high levels observed in developing countries.

Meanings of Citizenship: Czech Citizen in a Comparative Perspective

This was an interdisciplinary cross-cultural project which subjected Czech citizens to theoretical analysis and empirical examination. In the first, theoretical, part of the work a typology of post-totalitarian citizenship was proposed containing five types of citizens: responsible democratic, social materialistic, passive asocial, hedonistic consuming, and predatory antisocial. While democratic citizenship stems from preserved civic virtues, the deficient types of citizenship are partially caused by the post-totalitarian syndrome. In the concrete empirical studies of the international context the most significant aspects of citizenship were examined. Czech citizens (students) displayed an encouraging level of political civic culture when they loaded more often than six other national samples on the factor of democratic citizenship (based on a questionnaire and Q-sort by Feierabend, Q-factor analysis), but their level of loyalty and low critical rebelliousness can also be seen as reason for concern. The Czech population provided contrasting results in measures of civility; although chronically complaining about interpersonal relations, they passed relatively well in a series of situational field experiments even in the international comparison (Levine's helping measures. Czech nationalism is primarily "cultural nationalism", which is less favourable for democratic citizenship than the "civic nationalism" of Americans.

A Robust Parser of Czech

Mr. Kubon's project was inspired by the growing need for an automatic, syntactic analyser (parser) of Czech, which could be used in the syntactic processing of large amounts of texts. Mr. Kubon notes that such a tool would be very useful, especially in the field of corpus linguistics, where creating a large-scale "tree bank" (a collection of syntactic representations of natural language sentences) is a very important step towards the investigation of the properties of a given language. The work involved in syntactically parsing a whole corpus in order to get a representative set of syntactic structures would be almost inconceivable without the help of some kind of robust (semi)automatic parser. The need for the automatic natural language parser to be robust increases with the size of the linguistic data in the corpus or in any other kind of text which is going to be parsed. Practical experience shows that apart from syntactically correct sentences, there are many sentences which contain a "real" grammatical error. These sentences may be corrected in small-scale texts, but not generally in the whole corpus. In order to be able to complete the overall project, it was necessary to address a number of smaller problems. These were; 1. the adaptation of a suitable formalism able to describe the formal grammar of the system; 2. the definition of the structure of the system's dictionary containing all relevant lexico-syntactic information, and the development of a formal grammar able to robustly parse Czech sentences from the test suite; 3. filling the syntactic dictionary with sample data allowing the system to be tested and debugged during its development (about 1000 words); 4. the development of a set of sample sentences containing a reasonable amount of grammatical and ungrammatical phenomena covering some of the most typical syntactic constructions being used in Czech. Number 3, building a formal grammar, was the main task of the project. The grammar is of course far from complete (Mr. Kubon notes that it is debatable whether any formal grammar describing a natural language may ever be complete), but it covers the most frequent syntactic phenomena, allowing for the representation of a syntactic structure of simple clauses and also the structure of certain types of complex sentences. The stress was not so much on building a wide coverage grammar, but on the description and demonstration of a method. This method uses a similar approach as that of grammar-based grammar checking. The problem of reconstructing the "correct" form of the syntactic representation of a sentence is closely related to the problem of localisation and identification of syntactic errors. Without a precise knowledge of the nature and location of syntactic errors it is not possible to build a reliable estimation of a "correct" syntactic tree. The incremental way of building the grammar used in this project is also an important methodological issue. Experience from previous projects showed that building a grammar by creating a huge block of metarules is more complicated than the incremental method, which begins with the metarules covering most common syntactic phenomena first, and adds less important ones later, especially from the point of view of testing and debugging the grammar. The sample of the syntactic dictionary containing lexico-syntactical information (task 4) now has slightly more than 1000 lexical items representing all classes of words. During the creation of the dictionary it turned out that the task of assigning complete and correct lexico-syntactic information to verbs is a very complicated and time-consuming process which would itself be worth a separate project. The final task undertaken in this project was the development of a method allowing effective testing and debugging of the grammar during the process of its development. The problem of the consistency of new and modified rules of the formal grammar with the rules already existing is one of the crucial problems of every project aiming at the development of a large-scale formal grammar of a natural language. This method allows for the detection of any discrepancy or inconsistency of the grammar with respect to a test-bed of sentences containing all syntactic phenomena covered by the grammar. This is not only the first robust parser of Czech, but also one of the first robust parsers of a Slavic language. Since Slavic languages display a wide range of common features, it is reasonable to claim that this system may serve as a pattern for similar systems in other languages. To transfer the system into any other language it is only necessary to revise the grammar and to change the data contained in the dictionary (but not necessarily the structure of primary lexico-syntactic information). The formalism and methods used in this project can be used in other Slavic languages without substantial changes.