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Scholar Reports Mixed Results in Central Europe's Economic Transition - 2002-05-24

A Romanian sociologist Thursday told Washington's Woodrow Wilson Center for Scholars that the economic transition in post-communist Europe has had very mixed results with only Central European countries like the Czech Republic making significant progress.

Ionel Nicu Sava, a Bucharest professor, said the transition hasn't gone as well as hoped in Eastern Europe. Trained at the University of California at Los Angeles, Professor Sava said the successful countries of Central Europethe Czech Republic, Hungary and Poland have stronger institutions, clearly defined property rights and ruling elites comprised of technocrats.

By contrast countries farther east like Ukraine, Romania, and Bulgaria have elites comprised of former communists, unprotected property rights, and fragmented civil societies. These countries, he says, have attracted relatively little foreign investment and are dependent on western assistance.

Mr. Sava said the western prescription of shock therapythe quick deregulation and privatization of communist economies-has largely failed. "It's still a debate," he said, "whether the shock therapy did create something, or actually destroyed [things]."

Mr. Sava says the old communist era "nomenklatura" (Communist official) is still powerful in Eastern Europe. Corruption, he said, is likewise stronger.

In Central Europe, economic oligarchs have less power but they are still influentual. He said, "The point is [in Central Europe] that those clans [oligarchs] are not taking over the major institutions and the state,the legislature and the government and making them function in their own interest. However, there are fifteen percent of companies in the Czech Republic who say their businesses will not go [function] unless they pay some government officials with some amount of money on a yearly or monthly basis."

Mr. Sava says politics in Eastern Europe tend to be based on nationalism and statism. Old habits, he says, are hard to change when living standards remain depressed and below the levels of 1989, the year communism collapsed.