Though some recent machinations remind us that democracy can be a fragile thing, one can observe with guarded optimism that the overall transformation of the Central and Eastern European region to market-oriented democracies has been relatively successful. To understand where we are today, it’s important to look back to see how far Eastern Europe has come in 25 years.
Many take the Eastern European transitions for granted, noting the existence of market institutions and young democracies before World War II and subsequent Soviet domination, and characterizing the transition as a mere return to business as usual in the region. This interpretation is flawed, as it fails to realize that what we historically took to be “market institutions” and “democratic practice” in the region prior to post-war communism were deeply flawed and often only skin-deep.
Throughout most of the inter-war period democracy in the region was short-lived, with authoritarian leaders such as Poland’s Pilsudski or Hungary’s Admiral Horthy dominating their political landscapes, while other weak democracies struggled with the persistent rise of fascism.
Political parties were small, divided, and fractious. Economically, the region remained dominated by small-holder agricultural systems and under-developed industrial and financial sectors. Within civil society there were local institutions, such as youth groups, business associations, women’s organizations, and clubs, that provided for limited citizen engagement through volunteerism and social activism, but by modern standards these groups were yet to meet their full potential.
World War II and the rise of communism put paid to much of this foundation: political and economic elites were eliminated, and civil society was co-opted by communist leaders to become Party-controlled “transmission belts” of policy. With notable exceptions in Poland and Hungary, the private sector was destroyed, and a sense of citizen empowerment was effectively eroded up until the 1980s. Poland, with its powerful Catholic Church and remaining private hold on agriculture, and Hungary, with its post-1956 social contract which allowed limited private economic activity, preserved some spaces where private citizen could find some autonomy from the all-encompassing state. For the rest of the region most citizens turned their attentions inward, living a life of compromised loyalty best described by Vaclav Havel’s 1978 essay “The Power of the Powerless.”
With the decline of Soviet influence and the rise of citizen movements such as Poland’s Solidarity, the dynamic in Eastern Europe shifted dramatically, the façade of communist hegemony collapsed overnight, and the countries of the region began the transition with which we are now so familiar. What is important to note is that the combination of weak pre-war institutions and the civic and economic desolation wrought by communism left very few institutions, formal or informal, on which reform could be based. There existed, perhaps due to their proximity to prosperous and democratic Western Europe as well as historical experience, a notion of the direction in which countries should move vis-a-vis the creation of political and economic institutions and the role of citizenry in society, but there was scant practical experience on how to recreate such institutions.
The transition in the region relied largely on untested theories of shock-therapy and other hugely disruptive processes that sought to quickly place economic and social responsibilities in the hands of private citizens. The goal of these policies was to remove the vestiges of centralized planning and political power from the previous elites as quickly as possible. Political parties were quickly formed, and elections were put in place. While speedy, the economic reform process was painful: not only did the region have to create market systems, they had to do so on the ruins of communist economies that had failed to generate growth or provide basic necessities. Eastern Europe’s cupboards were bare, and the creditors were banging on the door.
Early reform efforts caused a great deal of economic pain and social dislocation, and it was no surprise that the re-clothed communists of old were able to grab back power through democratic means in many countries in the region. The resultant governments could do little to improve the lives of ordinary citizens, but did provide license for cronies to further plunder what economic assets remained in the region. As economies collapsed in Romania, Bulgaria, and Slovakia, the European Union began its efforts in earnest to bring these fragile states into the fold of modern Europe.
The guiding role of the EU in guaranteeing reform in Eastern Europe was and remains a critical element in the recipe for success. The EU played several important roles:
- Role model – To aspire to EU membership, countries were required to put in place governance, democratic, and economic reforms that harmonized with EU standards. The creation and maintenance of these institutions, were laid out in clear roadmaps, that allowed a more structured reform process.
- Political foil – Attaining EU membership required many painful reforms that weak democratically-elected governments had often been unwilling to take. Under the guise of EU membership, and the potential prosperity it offered, governments were able to take unpopular measures to restore fiscal stability and redefine the limits of the social state.
- Banker – Fiscal imbalance was an ongoing threat to reform success in the region. The EU’s deep pockets provided the financing needed to bridge the reform gap.
Beginning in 2004, EU accession became a reality for many East European states in a process that remains in place to this day (Croatia being the most recent admission). For those countries still seeking to ensure economic and democratic transition, the prospect of EU membership remains a powerful tool in driving this process.
Inclusion into the EU however, is no guarantee of success. While states such as Poland and Slovakia have done well within the EU framework, largely due to market-oriented and fiscally responsible policymaking, many of the Eastern states have seen rollbacks on both the democratic and economic fronts even after joining the EU. What is interesting to note is the limits of EU influence in post-expansion environments, when the carrot of EU membership is no longer available and the ability of Brussels to influence local policy becomes more limited.
Economic pressures resulting from the 2008 global recession triggered the rise of populist politics in many countries in the region. Hungary, long a beacon of EU progress, has become the most visible example of democratic roll-back, with the rise of extreme right parties and resulting electoral victories providing the Fidesz-led government an overwhelming mandate which it has attempted to use to limit judicial independence and threaten press freedoms. Although the EU has warned Hungary of its concerns regarding these matters, the government has set about enacting constitutional reforms that the opposition fears will allow it to consolidate its hold on power.
Economically embattled Romania weathered a constitutional storm in 2012 a pitched political battle between the Prime Minister and President, and the country’s governance reform goals still remain elusive with omnipresent corruption. In addition to routine claims of nepotism and unfair business advantages, Prime Minister Victor Ponta was alleged by the journal Nature to have plagiarized his doctoral dissertation (which was supervised by former Prime Minister Adrian Năstase, who was sentenced to prison for illegal campaign fundraising) and refused to resign as he had promised.
Like its neighbor, Bulgaria too has had its share of EU criticism over rampant corruption, and democratic institutions are feeling a significant strain as the long-lasting effects of corruption and fiscal imbalances brought down the Sofianski government, leading to ongoing street protests. Among the protesters’ complaints are the weak rule of law and poor business climate in Bulgaria.
While these strains are present, they should be viewed in the broader context of reform cycles. Ultimately, the trajectory of reform for the entire region has been positive; ups and downs do occur, but the goals are clear, and accountability mechanisms, whether a domestic electorate or EU pressure, are able to limit most backsliding.
The real challenge for the region in terms of reform is that goals are becoming more complex. Laggard states must figure out how to bridge the governance gaps that occur between the EU laws and norms they have adopted and the ability of local governments to actually implement them. The failure to enact effective governance processes remains the single greatest threat to the success of reform.
Societal reform still remains a work in progress, and must be seen through the lens of generational change. For many older East Europeans wary of volunteerism (whose concept was distorted by communism), NGOs and volunteer work are met with suspicion. It is the youth of Sofia that are calling for change in Bulgaria, and it is the youth of the region who aspire to participate in a world of transparency, fairness, and responsibility — hallmarks of successful democracy.
On the economic front, much has been done to create open and competitive economies where the private sector plays an increasingly important role, but poor governance, corruption, and entrenched cronyism still remain significant hurdles to the consolidation of market economies in several states. If it is true that a rising tide lifts all boats, then greater attention must be paid to these remaining challenges for prosperity to be felt in the region and for the promise of a democracy that delivers to be fulfilled.
Andrew Wilson is Deputy Director for Strategic Planning and Programs at CIPE.