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Capitalism from Outside?

Capitalism from Outside?: Economic Cultures in Eastern Europe after 1989

János Mátyás Kovács
Violetta Zentai
Copyright Date: 2012
Edition: NED - New edition, 1
Pages: 363
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    Capitalism from Outside?
    Book Description:

    Does capitalism emerging in Eastern Europe need as solid ethnic or spiritual foundations as some other “Great Transformations” in the past? Apparently, one can become an actor of the new capitalist game without belonging to the German, Jewish, or, to take a timely example, Chinese minority. Nor does one have to go to a Protestant church every Sunday, repeat Confucian truisms when falling asleep, or study Adam Smith’s teachings on the virtues of the market in a business course. He/she may just follow certain quasi-capitalist routines acquired during communism and import capitalist culture (more exactly, various capitalist cultures) in the form of down-to-earth cultural practices embedded in freshly borrowed economic and political institutions. Does capitalism come from outside? Why do then so many analysts talk about hybridization? This volume offers empirical insights into the current cultural history of the Eastern European economies in three fields: entrepreneurship, state governance and economic science. The chapters are based on large case studies prepared in the framework of an eight-country research project (funded by the European Commission, and directed jointly by the Center for Public Policy at the Central European University and the Institute for Human Sciences) on East-West cultural encounters in the ex-communist economies.

    eISBN: 978-615-5053-71-9
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. List of Tables
    (pp. vii-viii)
  4. About DIOSCURI
    (pp. ix-x)
  5. Prologue: Going beyond Homo Sovieticus
    (pp. 1-14)
    János Mátyás Kovács and Violetta Zentai

    When it comes to the domain of culture, Eastern Europe has no comfortable space for writing contemporary economic history. Prior to 1989, the master narrative of cultural evolution in the economies of the region rested on the dubious concept of Homo Sovieticus, depicting the majority of communist citizens as obedient and helpless victims of totalitarian rule in a command economy.¹ Although that concept was relaxed during the 1970s and 1980s by the market-socialist reforms producing new actors such as the “liberal apparatchik,” the “quasi-entrepreneur,” and the “self-Westernizing consumer,” the 1989 revolutions revitalized the theory of totalitarianism. In the romantic mood...

  6. Part 1. Entrepreneurship:: Smooth Hybridization?

    • Repatriate Entrepreneurship in Serbia. Business Culture within Hauzmajstor
      (pp. 17-34)
      Vesna Vučinić-Nešković

      This study concerns a small start-up firm founded by a Serbian repatriate who returned to Belgrade in 2001. His professional career was reinforced by highly specialized training in Western-type business management, expatriate positions located in the West and the East, and the socio-cultural milieu of Central and Eastern Europe.¹

      After working for large multinational companies both abroad and at home, he decided to leave the secure shelter of a multinational office in Belgrade and to start his own business. His entrepreneurial activities from 2004 onwards have run in two parallel directions: one was turning to the consultancy needs of foreign...

    • A Small Miracle without Foreign Investors. Villány Wine and Westernized Local Knowledge
      (pp. 35-56)
      Éva Kovács

      The story I tell here is not a conventional example of cultural encounters in Hungary. Why did I choose a winery for field research and why in the Villány region? First, I will make two arguments against this choice.

      A. In the early 1990s, the rural transition as a whole did not follow the same path as wine production in Hungary. In general, there were two main techniques to privatize agriculture:

      The ex-communist agrarian elite went to great efforts to acquire public assets (the former cooperative and state farms) and to modernize them (Juhász 1998, 1990; Bihari, Kovács, and Váradi...

    • From Local to International and Back. Privatizing Brewing Companies in Eastern Europe
      (pp. 57-70)
      Ildikó Erdei and Kamil Mareš

      The aim of this paper is to compare a number of case studies from the DIOSCURI research project that deal with privatization processes in the food and beverage industry (Erdei 2007; Mareš 2007; Mester 2007; Topolčić 2007). The enterprises concerned differed in scope, type of industry, and economic activity. Still, what was common was that they all went through privatization and consider their own privatization stories successful.¹ Following a preliminary comparison between the cases of brewery privatization, and informed by recent empirical research projects on the post-communist transition (Burawoy and Verdery 1999; Dunn 2004; Humphrey and Mandel 2002; Kovacheva et...

    • Reason, Charisma, and the Legacy of the Past. Czechs and Italians in Živnostenská Bank
      (pp. 71-88)
      Irena Kašparová

      Živnostenská Bank has traditionally been a Czech bank—a kind of national family jewel. Yet, it was the first bank in the Czech Republic to be taken over by foreign capital and has subsequently changed owners twice within two years. It is currently owned by UniCredito Italiano (UCI).

      When conducting the case study in Živnostenská, two major sources of information were used: written information—mainly the online sources generally available to the public (websites, newsletters, promotional leaflets, and annual reports)—that became the backbone for the bank’s history and later proved vital to the researchers while interviewing the bank’s management....

    • Managers as “Cultural Drivers”: Raiffeisen Bank in Croatia
      (pp. 89-104)
      Drago Čengić

      Our starting hypothesis begins with the assumption that Raiffeisen Bank Austria’s (RBA) position in Croatia was largely determined by opportunities in the Croatian market, opportunities that had been recognized by the Austrian bank’s owners in the early 1990s. Therefore, cultural encounters resulting from the establishment of RBA in Zagreb also depend on the policy of market penetration that RBA (as the first foreign bank in Croatia) used to embed itself as an integral part of the Croatian banking system.

      Contrary to the dominant approaches to entrepreneurship as an economic function, a market innovation, or as individual traits the entrepreneurs share...

    • The Rise of a Banking Empire in Central and Eastern Europe. Raiffeisen International
      (pp. 105-124)
      Violetta Zentai

      Banking has become a salient component of the transforming economies in Central and Eastern Europe due to the fact that only few of these economies had started to establish commercial banks during the old socialist system, their territories perceived as fertile grounds for profit and opportunities in the rush for new markets. Due to their actual economic and symbolic power, banks tell us about the nature of privatization and its trends, mobilize social imagination about wealth and monetary power, and set the norms of actions in corporate governance and the banking sector. This comparative study will investigate the main patterns...

  7. Part 2. State Governance:: Unilateral Adjustment?

    • Transmitting Western Norms. The SAPARD Program in Eastern Europe
      (pp. 127-148)
      Katalin Kovács and Petya Kabakchieva

      This paper will analyze a European Union (EU) program called SAPARD (Special Accession Program for Agriculture and Rural Development) in six countries: Bulgaria, the Czech Republic, Hungary, Poland, Romania, and Slovenia.¹

      In this study SAPARD is regarded as a potential conveyor of Western norms and governance techniques to the East. It is not the program itself that attracted our interest; instead, we focused on the institutional changes it brought about. Is there any chance for a mutual understanding and recognition of differences and similarities on a playing field such as this? Can compromises be forged? What is the chance of...

    • Cloning or Hybridization? SAPARD in Romania
      (pp. 149-166)
      Florian Niţu

      Europeanization, understood both in terms of process and outcome, is a complex phenomenon manifested at many levels, following very different patterns of interaction and “hybridization” (Ladrech 1994, Börzel and Risse 2003, Goetz 2001). It can be controlled, deliberate, planned, and top-down; or conversely, incremental, organic, and spontaneous. It can lead to both radical and superficial changes, it can be protracted or efficient, or more likely, it can incorporate all these features. This case study will analyze the SAPARD program (Special Accession Program for Agriculture and Rural Development) with an interest in exploring the conditions that made SAPARD a “special and...

    • Caring Mother and Demanding Father. Cultural Encounters in a Rural Development Program in Bulgaria
      (pp. 167-182)
      Haralan Alexandrov and Rafael Chichek

      This case study describes a project that was patterned on a European model and launched as an element of the European Union pre-accession policy for Bulgaria but was managed by the United Nations Development Program (UNDP). Thus, it provides an opportunity to explore several interfaces of cultural encounters: between the EU and Bulgarian policies and practices; between the administration of a global organization such as UNDP and the Bulgarian bureaucracy; and between each of them and the local rural communities.

      The specific approach to rural development, known as LEADER, originated in the EU in the 1990s as an attempt to...

    • Becoming European: Hard Lessons from Serbia. The Topola Rural Development Program
      (pp. 183-200)
      Mladen Lazić

      Contemporary economic culture in Serbia, the characteristics of which resulted from several contradictory historical processes, cannot be analyzed by simply “de-constructing” these characteristics into simple dichotomies like East and West, traditional and modern, or socialist and capitalist. Serbia’s historical development—in which belated modernization took the form of socialist quasi-modernization shaped as a “liberal”/quasi-market/opened-toward-the-West system that finally ended in a civil war, international isolation, and economic collapse—produced a complex mixture of value orientations that could serve as a basis for quite different modes of socio-economic reproduction.¹ This mixture has been characteristic of wider social groups, defined by their level...

  8. Part 3. Economic Knowledge:: Does Anything Go?

    • Have Polish Economists Noticed New Institutionalism?
      (pp. 203-222)
      Jacek Kochanowicz

      Institutional economics has risen in parallel with the decay of state socialism and the beginnings of the post-communist reform process. At first, an institutional approach appears highly relevant to the challenges the societies have faced emerging from state socialism, as it offers a perspective that allows an analysis of what was wrong with the old regime in terms of its economic performance and what might have been done to make its performance better. Surely, institutional economics and especially its new versions should have been welcomed in post-communist countries, as the fall of state socialism brought about the challenge of institutional...

    • The Sinuous Path of New Institutional Economics in Bulgaria
      (pp. 223-240)
      Roumen Avramov

      Until 1989, New Institutional Economics (NIE) was a paradigm almost completely ignored by the social sciences in Bulgaria. It was occasionally mentioned in papers on the history of economic thought. A scrupulous bibliography would maybe detect some remote reference in the texts of sociologists or philosophers. The research community was a bit more familiar with the “old” institutionalist school (namely, with its economic dimension), which had entered Marxist textbooks through a dogmatic interpretation in the traditional “critique of bourgeois economic ideas.” Some of the classics (like Veblen) were accessible in Russian translation, while libraries owned unsystematic collections of texts from...

    • Soft Institutionalism: The Reception of New Institutional Economics in Croatia
      (pp. 241-262)
      Vojmir Franičević

      This essay is about the reception of New Institutional Economics (NIE) in Croatia. In the NIE’s world of transaction costs, bounded rationality, and asymmetric information, institutions matter (Furubotn and Richter 1991). While NIE was originally focused on transaction costs and property rights analyses, for the purpose of this chapter, a broader definition is more appropriate, encompassing economic theories of non-market social relationships, economic analysis of politics, law and economics, and new economic history. However, the “institutions matter” axiom is shared by very different epistemological approaches, including those critical of neoclassical theory like old institutional economics (OIE) and its modern followers....

    • Institutionalism, the Economic Institutions of Capitalism, and the Romanian Economics Epistemic Community
      (pp. 263-280)
      Paul Dragoş Aligică and Horia Paul Terpe

      Any discussion of the topic of institutionalism in Romania is bound to take place under the shadow of a paradox: On the one hand, it looks like there is a huge propensity to adopt institutionalist views among Romanian economists. On the other, the diffusion of new and even old institutionalist theories has rarely moved (both in academia and the public arena) beyond perfunctory references and comments. Therefore, this paper begins by focusing on the representation of the institutions of capitalism in the economics epistemic community (broadly defined as the community of those specialized in the study and dissemination of economics),...

    • Beyond Basic Instinct? On the Reception of New Institutional Economics in Eastern Europe
      (pp. 281-310)
      János Mátyás Kovács

      In planning our study of East–West cultural encounters in economics, we were looking for a school of thought that is popular enough in our region to provide us with a sufficient amount of empirical information for a meaningful comparative analysis, and at the same time, identifiable enough to target our inquiry as precisely as possible. New institutional thought seemed to guarantee a large set of scientific theories of rapid expansion that have been “doomed” to flow in Eastern Europe during the past few decades. By new institutional thought we mean, first of all, what is usually called “new institutional...

  9. Epilogue: Defining the indefinable: East–West Cultural Encounters
    (pp. 311-336)
    János Mátyás Kovács and Violetta Zentai

    It was not only the dramatis personae of our case studies but also we, the researchers, who went through a number of surprising cultural encounters when bridging the gaps between our original expectations and the final outcomes of the project.¹ The chapters of this volume speak for themselves. Now it is the editors’ turn to try their abilities of introspection.

    In sum, DIOSCURI put forward four main assumptions:

    (1) East–West hybridization instead of presuming Western-led colonization (or Eastern self-colonization) as a typical outcome of cultural encounters.

    (2) Similarity between the individual countries/subregions of Eastern Europe in terms of post-communist...

  10. List of Contributors
    (pp. 337-338)
  11. Index
    (pp. 339-351)
  12. Back Matter
    (pp. 352-352)