building and civil society in Eastern Europe after the communism
General considerations
Poland and Ukraine are two of the countries that have come out of the Communist block and have embarked in a process known as transition, from the general characteristics of a Communist society (dictatorship, single-party system, state economy) to those of a Capitalist one (market economy, multi-party system, active civil society). In both cases, the governments also had to dedicate their work towards a process of state building that included, in many cases, creating the appropriate institutions, ensuring their functionality and their interconnectivity.
However, the ways that the two countries developed were significantly different. Despite the fact that, economically, both countries reflected a decrease in their GDP after 1989 (or 1991, the dissolution of the Soviet Union, in the case of Ukraine), Poland was much quicker to rebound and to firmly set its course towards building a truly democratic society, which included a vibrant civil society, increased transparency in the decision making process and an economic shock therapy that, despite the initial hardships, eventually proved the easiest way to reach a functional market economy. In the case of Ukraine, the absence of transparency, especially during the 1990s, meant that different power sharing agreements made obscure groups of interest take an important role in the country’s leadership.
This paper aims to present a parallel between the state and society building processes after the fall of Communism in two countries, Poland and Ukraine, on three different levels to include the construction of a political society, of an economic society and of a civil society. Further more, it will also aim to examine why Poland and Ukraine developed differently and will argue that the objectives that Poland had laid ahead for itself, including NATO and EU accession, meant that it had to abide by the implementation of all these reforms.
The construction of the political society
One of the struggles in both countries came with building the appropriate political institutions in the post-Communist period. In Ukraine, the political transformation was not as concrete and final as the one in Poland and sometimes just resumed to a process in which the institutions that had been created (Presidency, Prime Minister or Parliament) were fighting to share power. There were no clear institutional rules that defined the relationship between these institutions
Additionally, the primary body of institutional rules, the Constitution, took very long to be adopted, despite the fact that in other formerly Communist countries, this process was reasonably quick after the fall of the Communist regime. This was not necessarily the case of Poland, where a new constitution was adopted in 1997, but where the old constitution had suffered numerous amendments that had transformed it to better fit the institutional needs of the new post-Communist society. At the same time, some of the existing elements of the Communist constitution could still to be used as a regulator of institutional activity and a defining instrument of the role of each of the branches of government.
In Ukraine, there was no such previous constitution and the state initially proposed a draft that advocated for a mixed presidential-parliamentary system. This was eventually rejected and for years, there were no rules as to how the different institutions of government would work with one another. Further more, some of the institutions were hardly created, but rather transformed from formerly Communist institutions without an actual change. The Ministry of Economy, for example, was formed by transforming the former central planning institution during the Communist period
Another important difference in the political and institutional construction of Ukraine as compared to that of Poland was the fact that in Ukraine, much of the former Communist nomenclature remained in power, including key areas such as the Ministry of Economy or the Ministry of Finance. In Poland, this nomenclature was pushed aside reasonably quickly and replaced with a group of people who were inspired and adhered to the ideals for change.
In the case of political construction, in Ukraine there are also additional elements to be considered. Poland was already an independent and sovereign country in 1989, at the fall of the Communist regime, while Ukraine was only an existing republic within the Soviet Union. One of the challenges of the Ukrainian government was the consolidation of its territorial integrity and its sovereignty, the challenge to avoid civil wars as in the case of Georgia or the Republic of Moldova. The differences between Western and Eastern Ukraine were consistent (and still are), but the fact that the first two presidents of Ukraine had strong ties with Eastern Ukraine and that the industrial East had the economic upper hand as well meant that secessionist threats were put down quite soon after 1991.
Economic society
The immediate evolution of the economic society after 1989 was similar in the two countries, especially from an overall macroeconomic perspective and was characterized by a sharp decrease after the collapse of the Communist system. In Ukraine, this began to be felt as soon as 1992 and the GDP decrease continued an accelerated fall throughout the period 1992-1994 (decreases of 9.9%, 14.2% and 23% respectively)
However, Poland is quite a different example. According to different sources, Poland had both the mildest and shortest recession of all countries in Central and Easter Europe or the former Soviet Union
, which was reflected in only a 6% drop in production output over a period of two years. Poland was also the country in Central and Eastern Europe and former Soviet Union where economic growth resumed fastest, after only two years from the fall of Communism. At the end of the 1990s, Poland had recorded an increase with 40% of its GDP, as compared to 1990.
Some of the reasons of the economic declines in the first post-Communist years were similar in both Poland and Ukraine. The most notable one was the fact that the formerly Communist economies of the two countries were not adapted to the new challenges of the market economy that each government was trying to implement. Transforming the economies into systems that would be able to cope with the competition challenges of the capitalist societies would take a couple of years (in the case of Poland) and are still incomplete (in the case of Ukraine).
Another common reason was that both had counted on the former Soviet space (as well as the formerly Communist Central and Eastern European) markets as the main markets for their products and goods. Realigning their economies to match demand on the Western market would, again, take time.
However, the differences in reasons for the economic decline are numerous as well and include internal differences, as well as external objectives and perspectives. From this latter view, Poland had set for itself as the main objective NATO and EU accession ever since 1990 and its Western trajectory was constantly in that direction, including in what the economic transformation of the country is concerned. In 1991, Poland was already a member of the Visegrad Group, just one example of its commitment to a Euro-Atlantic integration. For Ukraine, this perspective did not come until the Orange Revolution in 2004. Even more, as the first Ukrainian president had shown, the decision factors in Ukraine were not certain which type of economic policy should be adopted and whether the liberal shock policies in Poland would be functional in Ukraine as well.
Further more, some of the characteristics of market economy and small market reforms had already been adopted in Poland by the end of the 1980s, during the Communist period, as can be reflected in some key indicators as the World Bank’s Index of Liberalization. This meant that the subsequent reforms that were implemented during the 1990s already had a sustainable platform on which they could be supported and Poland had a head start compared to Ukraine. The liberalization index for Poland was almost 0.6 in 1990, as compared to 0.2 for Ukraine. By 1998, the index had gradually increased in Poland to over 0.8 and only to 0.6 in Ukraine
At the same time, one also needs to consider the differences in the internal environment, which affected the economy. Some have shown that the political situation in Ukraine and the fact that it permitted the rise to power of different groups of interest and of “opaque groups” was a direct consequence of the economic decline, both because of the endemic corruption and of the fact that many of the governmental and government guaranteed credits were used for personal interest or personal businesses. The opaque political scene reflected in an economic scene that was not transparent and that led to its decline.
The situation was quite different in Poland from this point-of-view. As in most of the formerly Communist countries, one of the challenges of transition was to ensure that the right balance was set between giving the enterprises and businesses enough liberty to develop in the new market economy and applying the appropriate discipline by the government in order to control some of the key macroeconomic indicators, such the budgetary deficit.
At the same time, as compared to Ukraine, in Poland “the hard budget constraint on state enterprises, together with sufficient standards of corporate governance” were the main governmental instruments to avoid a “large-scale asset stripping before privatization”
. This was one of the key reasons for which the economic rebound started quite early for Poland, as compared to Ukraine. The privatization process did not take the chaotic characteristics it had in Ukraine, where the state assets were often simply divided between groups of interests and individuals close to the decision factors and power leverages. The rational privatization process in Poland meant that many of these assets, still functional, could be used to resume economic growth. Further along, the fact that there was a rational privatization of these assets meant that the direct foreign investment could gradually start during the early 1990s.
There was another explanation for the economic evolution in Poland during the transition period as compared to that of Ukraine. The Polish governments during the 1990s promoted an environment in which the small and medium-size enterprises (SME) could develop. Any economic theory will argue that this is the sector of a national economy that best supports a sustainable market economy. In Poland, the fact that this SME segment was encouraged by the government and supported with the appropriate legislative and executive actions also meant that the enterprises inherited from the Communist period would have an important competitor on the market. None of these actually occurred in Ukraine or, whenever they did, it was an isolated act rather than a generalized, governmentally-supported approach.
One final element worth referring to with regard to the economic aspect of state building and to the role of the government refers to the fiscal reforms and, more notably, the pension reform in Poland, a key element to ensure that one of the most vulnerable categories, the elderly, could be somewhat cushioned against the effects of the economic transition. With a rational division of the pensions in different tiers, the Polish governments implemented fiscal and pension reforms during the early 1990s, while in Ukraine, the comprehensive pension reform only started around 2005 and has been stalled for the last years.
Civil society
Civil society, along with political society and economic society, previously mentioned, is the third of the five interconnecting “arenas of democratization,” as Juan Linz and Alfred Stepan have labeled them
. The role of the civil society is significant, especially in the early phases of post-Communist state building, both in terms of aiding the government in the institution and societal changes that need to be implemented, and also of providing the appropriate feedback and control mechanism as to how these reforms are being implemented.
In Poland, the civil society and its activism had been one of the direct causes of the fall of the Communist regime, starting with the Solidarity movement in the early 1980s. The tradition of an active civil society became even more obvious after the fall of the Communist regime, when, from 1989 to 1996, data reported a significant increase in the number of civil society organizations
. In 2003, there were 24,000 civil society associations and foundations in Poland
In Ukraine, this process was significantly slower than in Poland and it had different characteristics as well. Sources report around 28,000 NGOs in Ukraine in 2000
, but one has to consider that the population and size of Ukraine is significantly greater than the one in Poland. The other important issue was that an important part of these NGOs were either supported and financed by the Government or, in other cases, the government coordinated the NGO activity. This drastically reduced the capacity of these NGOs to act according to their monitoring objective.
There are probably other factors associated with the smaller influence of civil society on the shaping of post-Communist society in Ukraine as compared to that in Poland. Despite several arguments against this statement, the civil society in Ukraine did not have a tradition in this sense. The one in Poland did, especially given the role they had played in the 1980s in bringing down the Communist regime.
The Polish civil society also had the memory and experience of the civil society in that country during the period between the two world wars, when a democratic and independent Poland encouraged different forms of association and, at least for a period of time, based the governmental rule on the influence of the civil society, rather than the other way round, as it happened in Ukraine during the post-Communist period. The existence of a democratic tradition that supported a liberal and vibrant civil society was very important in Poland in the state building process and the post-Communist government used additional instruments to stimulate such a process, without interfering with the activity of these civil society groups.
Additionally, the Polish civil society was also more exposed to the positive influence of the Western civilization, where civil society had developed for a much longer period of time. The integration of the country in the Euro-Atlantic space and institutional framework also included the civil society and Polish NGOs, so that the Western world had all the interest to commit to training and shaping these organizations in Poland. In Ukraine, this was much less the case and, overall, it is safe to emphasize that the civil society in Poland, as is the case with some of the other segments discussed here, had a slow start and an influenced continuation.
Conclusions
The state building process was different in Poland and Ukraine, with different objectives and different results in the transition period, especially during the 1990s. This paper has aimed to analyze this assertion on three different levels: the political level, the economic level and the civil society level. In all these areas, the conclusions are similar.
First of all, the approach was well thought strategically in Poland, with clear objectives and plans of actions by which these could be reached. The fact that the political society and economic environment needed to be changed was an observation with which all or most of the political class agreed, which meant that there was a certain degree of political consensus from that point-of-view. There was also an agreement, in the first years after 1990, on how these are going to be reformed and the decision factors agreed on quick, despite sometimes painful measures, by which the economy could be transformed and made adaptable to the new market economy, as well as more competitive on the international market.
None of these happened in Ukraine, where change was very slow, with the government taking different ineffective measures to protect the population. While in Poland, the pension system was reformed to cushion the elderly population against the changes that would need to be made, in Ukraine this process started slowly only in 2005, which meant that during the 1990s, many of the underprivileged citizens found themselves facing the financial burden of a painful transition.
The transition, both political and economical, in Poland was also rational, as compared to the one in Ukraine, and the governmental decision factors, as well as the civil society, have the greatest merits for this. The fact that it was a rational transformation is seen in the way the former Communist assets were used and privatized so that they could still be efficient, with investments, in the new market economy. In Ukraine, the privatization process simply meant, in many cases, that these Communist assets were stripped of their value or delivered into the hands of different power players in the country.
This brings the conclusions to another important observation: a higher degree of transparency in Poland was also helpful in ensuring that the implemented measures could be checked and that a powerful control and feedback mechanism was in place in order to facilitate the implementation of all these measures. In Ukraine, during the 1990s, a group of obscure interests and power breakers were the ones that were actually doing all the deals and leading, in fact, the transition effort. At the same time, the government was encouraging such practices rather than taking the appropriate measures to reduce them. In Poland, a transparent governmental authority acted towards the best interest of the citizens who had voted it to power.
Some of the challenges that Ukraine faced were inherently much greater than those in Poland, especially in the political segment. In Ukraine, most of the institutions, as well as the relations between those institutions and the overall institutional framework, needed to be created. They did not exist previously, with Ukraine part of the Soviet Union. However, in Poland, many of the institutions from the Communist period could be used as the foundation for the new institutions. Even more so, the democratic tradition in Poland, dating back to the period between the two wars, meant that the Polish society already had the democratic tradition necessary for the successful development of such a society from an institutional point-of-view.
From this political perspective, the challenges for Ukraine went as far as the sovereignty and the capacity to support the new Ukrainian national state, whereas for Poland, this was never an issue after the fall of Communist, with the frontiers of the Polish state recognized by all countries in the world.
Bibliography
1. The World Bank. 2002. Transition – The First Ten Years Analysis and Lessons for Eastern Europe and the Former Soviet Union.
2. Fritz, Verena. 2008. State-Building: A Comparative Study of Ukraine, Lithuania, Belarus, and Russia. Central European University Press. Page 113
3. Snelbeckker, David. June 2005. Pension Reform in Eastern Europe and Eurasia: Experiences and Lessons Learned. The Services Group.
4. From Howard, Marc. 2003. Weaknesses of Civil Society in Post Communist Europe. Cambridge University Press
5. Magner, Michael. 2005. Civil Society in Poland after 1989: A Legacy of Socialism? Canadian Slavonic Papers.
6. Isajw, Wsevolod. October 2004. Civil Society in Ukraine: Toward a Systematic Sociological Research Agenda. PAPER PRESENTED AT THE WORKSHOP Understanding the Transformation of Ukraine: Assessing What Has Been Learned, Devising a Research Agenda
The World Bank. 2002. Transition – The First Ten Years Analysis and Lessons for Eastern Europe and the Former Soviet Union.
Ibid.
Fritz, Verena. 2008. State-Building: A Comparative Study of Ukraine, Lithuania, Belarus, and Russia. Central European University Press. Page 113
The World Bank. 2002. Transition – The First Ten Years Analysis and Lessons for Eastern Europe and the Former Soviet Union. Page 3.
Ibid.
Ibid. Page 28
Snelbeckker, David. June 2005. Pension Reform in Eastern Europe and Eurasia: Experiences and Lessons Learned. The Services Group.
From Howard, Marc. 2003. Weaknesses of Civil Society in Post Communist Europe. Cambridge University Press
Ibid. From Grzegorz Ekiert and Jan Kubik.
Magner, Michael. 2005. Civil Society in Poland after 1989: A Legacy of Socialism? Canadian Slavonic Papers.
Isajw, Wsevolod. October 2004. Civil Society in Ukraine: Toward a Systematic Sociological Research Agenda. PAPER PRESENTED AT THE WORKSHOP Understanding the Transformation of Ukraine: Assessing What Has Been Learned, Devising a Research Agenda
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