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Do institutions shape post communist politics or post-communist politics shape institutions?

The post-communist era did not witness the emergence of ‘normal’ politics from the rubble of the old regimes. Explanations for this failure to join the Western path of parliamentary democracy vary, but many historians and political scientists emphasise the role of the communist legacy in preventing the development of viable stable politics. This essay will look at the issue of the autonomy of political actors vis-à-vis institutional frameworks.

There are two clusters of theories that are relevant to these issues. Both have been originally formulated in response to different problems but have subsequently been applied to the vexed issues of institutional reform in East and Central Europe. The first set of theories focuses on how states become or remain democratic. A second theory focuses on elites in transformational processes. This approach was developed first in the context of South American politics but then successfully transposed to explaining post-communist politics in Europe . It is this latter approach that lends itself readily to explaining the complex relationship between institutions and political actors.

Politics is the way to determine how resources are being distributed fairly within society. Communist politics was notably different from this aspiration. It deliberately rejects the legitimacy of boundaries for state action and, consequently, the development of a private sphere was prevented . Post-communist politics has mainly been concerned with rectifying this expansion of governmental activity. Many economist and political scientists believe that the first step towards the successful introduction of politics would be achieved through the promotion of a market economy. It was in this area that most political reformers in the 1990s in Eastern and Central Europe were initiating their project of reforming communist societies. And it was here that they often miserably failed. Why was success in economic reforms so elusive?

The constraints that institutions had on political reforms became obvious when the Yeltsin administration in Russia attempted to liberalise prices. Economists saw this as the first step towards a market economy. Free floating prices would ensure that manufacturers developed a sense for the value of their products which in turn would propel them towards introducing profitability. Although prices would initially skyrocket, consumers would reject overpriced commodities and producers would then readjust their prices to reflect the real value of their goods. So far the theory. As prices were liberalised and the government lifted all price regulations that had been in place for decades during the communist era, prices increased enormously as predicted and consumers found it difficult to buy the necessary goods. According to the theory, manufacturers would now readjust the prices according to the rapidly sinking demand, and goods would become affordable again. However, manufacturers refused to lower their prices. Despite selling next to nothing, producers kept the prices unreasonably high. Their assumption was governed by the institutional framework that had been in place under communism for decades. If manufacturers would not sell and consequently would make a loss, their deficit would be met by the government which would ensure that the central bank would redeem their loss. Manufacturers thus had no interest in lowering their prices; they in fact had no incentive to selling profitably at all. The financial institutions and practices in place at the time of price liberalisation acted as a decisive counterweight to the reform policies of the government.

So, why do those institutions persist? Are political actors incapable of reforming institutions in post-communist societies? Transition theorists tell us something about the correlation between political reform and institutions. They assume that institutions are ways in which rules of power allocation are determined and resources are distributed. Now, post-communist societies have been characterised by a marked imbalance in terms of resource distribution. Economic power was concentrated in the hands of directors of few industrial complexes while political power lay exclusively in the hands of a small party elite. ‘Normal’ politics would ensure that the rules of distribution of power are determined in the political arena where political elites are subject to accountability and periodic elections. If politics itself, however, is not opened up to participation and opposition parties cannot compete freely with the old parties of power, then the rules of distribution in politics and economics are likely to be ‘negotiated’ between the old friends who have dominated these spheres in communist times.

Transition theorists argue that political and economic elites in post-communist societies disguise their positions of power with the cloak of democratic politics, while in fact they have remained in power and conceded no space to any opponents . Almost all post-communist transitions have been ‘pacted’ transitions, where communist elites have been given the opportunity to negotiate for themselves the most profitable and most influential positions in the new regime. Institutions thus live on, while being renamed and re-branded as vehicles of democratic control of the population while political game in the post-communist states has still not liberated itself from the influence of institutions. Tipping the balance in favour of politics presupposes political integrity on the side of the agents of change as well as the political will and strength to carry out radical institutions reforms.


Bibliography

Marat Salikov. Russia’s Transition to Democracy. Constitutional Justice and the Protection of Civil Liberties. In William J. vanden Heuvel (ed.). The Future of Freedom in Russia. Philadelphia and London: 2000, pp.17-47
Virginie Coulloudon. The Divided Russian Elite: How Russia’s Transition Produced a Counter-Elite. In Valerie Sperling (ed.). Building the Russian State. Institutional Crisis and the Quest for Democratic Governance. Boulder and Oxford: Westview 2000, pp.67-87
G. DiPalma. To Craft Democracies: An Essay in Democratic Transitions. Berkeley: University of California Press 1990.

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