Privatization and state property management in post-transition economies

Privatization was a centerpiece of the Central and Eastern European (CEE) transition process, the main drivers of which were the desire to increase the role of private business, the need for economic restructuring and increasing of efficiency and ambitions to crush the economic might of the communist regime and establish the basis of a new political elite. Until the mid-2000s the main transition goals of CEE economies were largely achieved, which is also expressed in their EU-accession. However, the transition process did not create economic systems fully comparable with more established market economies of the EU. After successful stabilization and large scale de-nationalization of state property the first two drivers of privatization lost importance. Furthermore external pressure from international organizations such as the World Bank or the European Commission declined. After becoming members of the “club” only the third driver remained intact and CEE governments started to rethink their relationship towards state property using it as an “uncontrolled tap of public money”. Weak civil and political control institutions enabled these processes. This development is illustrated by the examples of Hungary and Poland. This paper aims at contributing to the development of the theory of CEE capitalism models with the analysis of the changing role of state ownership and privatization.