CZECHOSLOVAKIA - Economic Reforms of 1960s

The paper starts with a very brief overview of changes in the Czechoslovak economic system after the WWII and especially after the Communist coup d'etat of 1948. There were quite visible socialist features in the post WWII developments, but before 1948 they were more of the West European type and the full-fledged Soviet-type command economy was introduce only after 1948. But the Soviet-type system did not fit the industrially developed country and created serious problems already in the middle 50's. The first economic reform of 1958 aimed for some improvements of the Soviet-type system, but not for any substantial change of the system itself. Less than ten years later the much more radical reform started. It aimed for a return to the market economy, but of the socialist and not capitalist character. The economic reform was also accompanied by significant changes in the social and political system that aimed to restore democracy. The whole economic and political reform process went already so far that it could have been stopped only by the brutal invasion of the Soviet army in 1968. The paper continues by describing the main features of the economic reform, that is changes in the organizational structure of the economy, changes in the role and methods of planning, changes that were supposed to lead from central fixing of all prices to the step by step freeing of prices to the market forces. It continues with the proposed changes in the wage determination and with the completely changed role of the 'success indicators'. In analyzing the social, political and economic background of the reform, the main attention is concentrated on the strategy of reform that is on timing, extent, speed and sequencing of reform measures. Finally the social forces behind the reform are analyzed.