The Enlarged European Union : Unity and Diversity 9781136344565, 9780714652870

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THE ENLARGED EUROPEANUNION

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THE ENLARGED EUROPEAN UNION Diversity and Adaptation

Editors

PETERMAIR JAN ZIELONKA

FRANKCASS LONDON-PORTLAND,OR

First Publishedin 2002 in Great Britain by FRANK CASS PUBLISHERS 2 ParkSquare,Milton Park, Abingdon, Oxon, OX14 4RN and in the United StatesofAmericaby FRANK CASS PUBLISHERS 270 MadisonAve, New York NY 10016 Transferredto Digital Printing 2005

Website:www.frankcass.com Copyright © 2002 FrankCassPublishers British Library Cataloguingin PublicationData The enlargedEuropeanUnion: diversity and adaptation 1. EuropeanUnion 2. Nationalism- EuropeanUnion countries 3. EuropeanUnion countries- Economicintegration 4. EuropeanUnion countries- Social policy I. Mair, PeterII. Zielonka, Jan, 1955337.1'42 ISBN 0 7146 5287 3 (cloth) ISBN 0 7146 8255 1 (paper) Library of CongressCata1oging-in-Publication Data The enlargedEuropeanUnion: diversity and adaptation/ [edited by] PeterMair, JanZie1onka. p. cm. Includesbibliographicalreferencesand index. ISBN 0-7146-5287-3(cloth) - ISBN 0-7146-8255-1(paper) 1. EuropeanUnion countries- Emigrationand immigration. 2. EuropeanUnion - Ethnic relations3. EuropeanUnion countries- Economicintegration.4. Europe- Politics and government- 1989-5. Group identity - Europe.6. EuropeanUnion countries- Social policy. 7. National characteristics,European.I. Mair, Peter.II. Zielonka, Jan. 1955N7590 .E47 2002 940.56-dc21 2001008502 This group of studiesfirst appearedin a SpecialIssueof WestEuropeanPolitics (ISSN 0140-2382)Vol.25, No.2 (Apri12002), [The EnlargedEuropeanUnion: Diversity and Adaptation]. All rights reserved.No part of this publication may be reproduced,storedin or introducedinto a retrieval system,or transmitted, in anyform, or by any means,electronic, mechanical, photocopying,recording, or otherwise,without the prior written permissionof the publisherof this book.

Contents

Acknowledgements Introduction: Diversity and Adaptationin the EnlargedEuropeanUnion

Vll

JanZielonka and PeterMair

1

EastwardEnlargementof the EuropeanUnion Dieter Fuchsand and the Identity of Europe Hans-DieterKlingemann 19 Culture and National Identity: 'The East' and EuropeanIntegration

David D. Laitin

55

Discomfortsof Victory: Democracy,Liberal Valuesand Nationalismin Post-Communist Vladimir Tismaneanu 81 Europe Making Institutionsin Centraland Eastern Europe,and the Impact of Europe

Darina Malova and Tim Haughton 101

Making Marketsand EasternEnlargement: Diverging Convergence?

Laszlo Bruszt 121

Health not Wealth: Enlargingthe EMU

Daniel Gros 141

The Welfare Statein TransitionEconomies and Accessionto the EU Hans-JorgenWagener 152 Approachingthe EU and Reachingthe US? Rival Narrativeson TransformingWelfare JanosMatyasKovacs 175 Regimesin East-CentralEurope

Abstracts

205

Notes on Contributors

210

Index

213

Acknowledgements

This volume includespapersfrom two researchprojectsconductedjointly by the RobertSchumanCentreof the EuropeanUniversity Institute andthe Group of Advisors at the European Commission. We are grateful to Giuliano Amato, JacquesDelors and Jean Luc Dehaene for chairing successiveparts of the projects. Official reports of theseprojects can be obtainedvia the RSC website at http://www.iue.itIRSClPublicationsRSCPP.htm.Needlessto say, neitherof theseinstitutionsshareresponsibilityfor the individual argumentspresentedin this volume.

Introduction: Diversity and Adaptation in the Enlarged European Union

JAN ZIELONKA and PETER MAIR

It is now taken as given that the EuropeanUnion will be a much more diversifiedentity following its plannedeastwardenlargement.The applicant states fromEasternEuropeare much poorerthan the currentWestEuropean memberstates.Their democracy andin somecaseseven their statehoodis newly establishedand presumablymore fragile. Their economic,legal and administrative structures are less developed.They also have their own distinct histories, societiesand cultures. And although they all share the aspirationto join the Union, their visions, interestsand priorities do not necessarily converge with one another nor with those of current EU members.In fact, in view of the numerousstructuraldifferencesbetween the currentand prospectiveEU memberstates,it is difficult to expectthere to be a major anddurablealignmentof their respectivepolitical preferences and behaviourafter enlargement. The EuropeanUnion is trying hard to reducemany of thesestructural differences before the accessiondate. But how much can possibly be accomplished in the relatively short time before the first round of enlargement?Since pressureis mounting to speedup accessionand at the sametime to makeit inclusive, it is highly unlikely that the Union will take in only the most unambiguouslyEU-compatiblecountriesfrom the region. Henceby openingthe doorsandusheringin sucha largedegreeof diversity, it is inevitable that some of the admission criteria are going to be compromised.But doesthis meanthat the processof Europeanintegration will be slowedor even halted?Will it havethe effect of paralysingthe EU institutions,leadingto an escalationof the sort of disputesthat may prevent any collective endeavours? This collectionintendsto examinethe variousforms of diversity that are likely to persistafter the admissionto the Union of severalpost-communist countriesand seeksto assessboth the real level of diversity as well as its implications. Will diversity lead to actual divergence in structure and

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policy?! Needwe fear a possibleparalysisof Europeaninstitutionsafter the enlargement?In order to answer these questions, differences and similarities in the fields of macro-economics,welfare systems,democracy, institutional infrastructure, civic orientations and popular culture are scrutinised,as well as the processesof adaptationto Europethat are already underway amongthe candidatemembers.The presentationof this rangeof empirical evidence is intended to challenge many of the theoretical assumptionsaboutthe scope,form and meaningof diversity in the process of Europeanintegration, and especiallyin the context of the forthcoming eastwardenlargement.In fact, the map of unity anddiversity in the enlarged EU provesto be extremelycomplex,and doesnot simply correspondto the old East-West divide. Moreover, the division lines themselves are constantlychanging,with the enlargementprocessconstitutingan important factor forcing adaptationand serving to push individual statesinto a single regulatory framework, if not necessarilyin a common political direction. The Europeaneffect works unevenlyin different functional areasas well as in different territories, and there are other 'unifying' factors at play, with globalisation(or perhapssimply Americanisation)in particular producing different models and loyalties than Europeanisationas such.2 In addition, thereare alsocentrifugalforces within the candidatecountriesthat continue to generatediversity ratherthan unity acrossEurope. A certain degreeof diversity is, of course,unavoidable,but it needsto be emphasisedthat this applies not only to the future enlargedEuropean Union, but also, and already, to the current Union of 15 quite diversified memberstates.Moreover,it is clearthat not all typesof diversity needprove detrimentalto the processof Europeanintegration.Diversity canhaveeither positive or negativeconnotations,dependingon contextand objectives,and much of its effect clearly dependson what is being sought,in which field, and underwhat particularset of circumstances.Let us thereforebegin with an effort to conceptualisethe impactof diversity on the processof European integrationand to ask whetherthe increasedlevel of diversity is a baneor blessingfor the enlargedUnion. DIVERSITY AND EUROPEAN INTEGRATION

In the theory of Europeanintegrationthe conceptsof fusion, convergence, cohesionand integration are often used as synonyms,3and this inevitably leadsto a tendencyto demoniseany sort of diversity. For many studentsand practitioners,the progressof Europeanintegrationis simply measuredby the degreeto which the Union is able to achieve greater cohesion.The

INTRODUCTION

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failure of Europeanintegration,on the otherhand,is illustratedby examples of persisting and irreconcilable differences among individual member states.But why is diversity seenas problematic? The reasons for criticising diversity are many. One is a misguided perceptionof the ultimate aim of integration.If Europeanunity is the aim of integration,differencesin structureand behaviourare seenas somethingto be overcomeor even as somethingfundamentallyundesirable.But unity as such was never the ultimate aim of integration.4 In the extreme,of course, such an aim could lead to the creationof an Orwellian-like statethat is not only totalitarian,but also inefficient,Sa scenariothat is of particularrelevance in the contextof eastwardenlargement.Moreover,homogenisingtendencies in the processof Europeanintegrationhave also made it necessaryfor the Union to developand 'legalise' the conceptsof subsidiarityand flexibility,6 although,interestinglyenough,suchsubsidiaritydiscoursehasscarcelybeen applied to the issue of eastwardenlargement,with the new applicant states being deniedthe opportunityfor the various opt-outsthat have alreadybeen negotiatedby somecurrentmemberstatesin the areasof foreign, monetary, socialor border-relatedpolicy (for example,the Schengenacquis).In fact, an insistenceon total alignment with EU norms and regulationsremains the prevailing discoursein the processof enlargement,not only for tactical but also for strategicconsiderations. This uneventreatmentof currentandprospectiveEU memberssuggestsa resistanceto acceptingthe unknown 'other' as a partnerin a well-established project - and this is yet anotherreasonfor demonisingdiversity. This is a quite natural psychologicalreactionto changeand has beenexperiencedin previouscasesof enlargement.When Spain, Greeceand Portugalattempted to join the thenEuropeanCommunities,for instance,fearsof migratoryflows 7 and the import of lax legal Mediterraneanculture were quite widespread. Identity formation involves a distinction being madebetweenthe 'self' and the 'other', and despitetheir persistingEuropeanquest,the countriesthat lay behindthe Iron Curtain havelong beenstigmatisedas a different 'other'. As Giuliano Amato and Judy Batt haveobserved: The division of Europehas left its mark on perceptionsin the West, reinforcing long-standingprejudices about the East as "backward" and less "civilized" than the West, not fully "part of Europe". The prospectof enlargementto the Easthasbroughttheseprejudicesto the fore, further contributing to the tendencyto portray the increasing diversity that it entailsas a new anduniquelythreateningchallengefor the EU.8

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For the applicant states,enlargementrepresentswhat Wagenerin this volume refers to as their 'return to Europe' after many years of Soviet domination;9 for many of the current member states,on the other hand, enlargementlooks more like a missionarycrusade,in which the applicant countriesare sometimestreatedas an equivalentof medievalbarbariansthat needto be taughtthe superiorWesternways of doing businessandpolitics.10 In other words, the view is that they should resembleEU prototypesor otherwisebe kept at bay with the useof exportquotasand Schengen.At the same time, however, it is evident that no single EU prototype actually exists.11Current EU membersare themselvesvery diversified and one can arguethat the acquiscommunautairecontainsrules that are technicalrather than normative,and which, as such,can hardly representa seriousfactor in identity formation. In fact, EU identity is closely linked to a pan-European culture and history of which the candidatestatesare an incontestablepart. To put it anotherway, it is evidentthat Europeanidentity can hardly remain the exclusivecommodityof an organisedgroupof the powerful andthe rich. Another reason for attacking diversity emerges from the positivist predilection for social and institutional engineering that is widespread among both social democraticand Christian democraticpolitical parties. The Union is seen as a means of controlling the very complex and diversified European environment through the use of communitarian solutions.While the liberal approachtoleratesand evenpraisesdiversity of structure and action, the positivist approachis about disciplined crafting aimedat curbing variousforms of diversity, especiallythosethat might lead to a durabledivergence.This requiresa careful selectionof targets(agenda setting), elaboration of conditions, safeguardsand time-tables, active guidanceandregularscreening.12 Failureto meetcertaintargetsor deviation from the envisagedroute is evaluatedin a very negative sense.The EU policy of enlargementin this senseis concernedwith engineeringand crafting. The applicant states are confronted with the requirement to implement a set of conditions that are aimed at making them EUcompatible.Their progressin meetingtheseconditionsis subjectto regular screening.Accessionis meantto take place only once the applicantsmeet the envisagedtargets. But can crafting and engineeringever succeedin a complex European environment? So many of the existing European arrangementshave developedin such an ambiguousand often disguisedmannerthat, despite all the pretentiousrhetoric, it is difficult to believe that any were the result of careful engineering.There is little reasonto assumethat the eastward enlargementwill not follow a similar path. In fact, the EU hasneverspelled

INTRODUCTION

5

out the main objectivesof its enlargementpolicy (althoughvarious and at times contradictorystatementshavebeenmadeby successivepresidencies, the Commission,as well as individual MEPs). Its accessionconditionsare often imprecise, impractical and in conflict. The screening process is superficial and subjectto discretionaryinterpretations.And the successive decisions taken within the processof enlargementresult from hard and largely unpredictable political bargaining that does not resemble any carefully crafted blue-print. Moreover, the Western Europeanexperience showsthat engineeringdoesnot eliminatediversity, but only modifies it. As a recentcomprehensivestudy of the impact of EU policies and legislation on the memberstatessuggested: The processpatternsand policy outcomesof Europeanizationhave not beenuniform acrossthe memberstates,and do not reflect either the well definedwill of a "unified supranationalactor" or a pervasive problem-solvingrationality which imposesitself "automatically"as to increasethe overall efficiency of Europeanpolicy decisionsin the context of a transnational interdependenceof policy problems. Instead, the political reality of Europeanpolicy-making is 'messy' insofar as it is uneven across policy areas and member states, institutionally cumbersome,and subjectto the dynamicsof domestic politics each with its own particular logic. As a consequence,the outcomesof Europeanpolicy-making tend to be much more diverse than one would expect and preclude any simplistic explanationof Europe-inducedchanges.13

In other words, despitecrafting and engineering,diversity alreadyappears as a normal stateof affairs within the EuropeanUnion, and in this regard eastwardenlargementwill changelittle. DIVERSITY AND EUROPEAN INSTITUTIONS

Fearsof destroyingthe existing delicatebalanceof powerin the Union also prompt criticism of diversity, with the side-effect that the process of enlargementis both usedand abusedby individual memberstatesin order to enhancetheir own partisanpositions.The often lessthan dignified interstate bargaining during the Nice summit offers a case in point. More generally, those in favour of looser forms of Europeanco-operationmay advocate a speedy and wide-reaching enlargement as a means of underminingthe federalist ambitions of other memberstates,and this in tum leadsto fears that the latter will be temptedto pursuemore advanced

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THE ENLARGED EUROPEAN UNION

forms of integrationwithin a smallerand more convergentEuropeancore.14 Of course,the creationsucha coremight haveseriousnegativeimplications for the entire processof Europeanintegration. Most crucially, it would imply abandoningthe so-calledcommunity model in which all member statesaretreatedon an equalbasis,undertakingthe samemutualobligations and following the samerules. The acquis communautairerepresentsthe essenceof this model and it is for this reasonthat the applicantstatesare 15 deniedany opt-outsfrom its components. In the short run the import of additional diversity from EasternEurope may indeed result in a more inter-governmentalrather than a federative mode of Europeanco-operation.This neednot be the casein the long run, however. Although each previous wave of enlargementimplied a certain increase of diversity, communitarian solutions neverthelessgradually becamethe norm in many new fields. It might also be arguedthat it is preciselythe creationof a Europeancore that could lead to more diversity, and perhapseven real divergence.The core would add an extra layer of institutional co-operationwithout abandoningexisting layers within the EU itself, and its creation could even lead to serious conflicts. Some of the current member stateswould be worried about being excludedfrom the core, while others would fear, rightly or wrongly, that the core opensthe door to Franco-Germandomination.Hence,while the ideaof a core Europe has beenraised many times in the history of Europeanintegration, it has neverthelessnot beenimplemented.Insteadthe Union has developedmore modestforms of diversificationin the form of temporaryor permanentoptouts, subsidiarityand flexibility. Increaseddiversity is also believed to carry the risk of paralysis and immobility in the decision-makingsystem.It is alreadydifficult to get 15 states in line, and adding extra states to the list may well prevent the emergenceof any meaningfulconsensusin the future. The addition of new states will also create the need for additional special arrangementsand transition periods that would further complicate the decision-making system. Moreover, a more complex decision-makingsystem is seen as likely to be less efficient and less transparent,thus leading to negative implications for the Union's legitimacy.16 Again, however, this does not need to be the case.Decision-makingdeadlockmight have already been anticipatedin a Union of 15 diverse member states,and yet it is often avoidedthroughthe escaperoutesdevisedby the actorsinvolved.17 Indeed, accordingto Adrienne Heritier, who has extensively studied the Union's ways of accommodatingdiversity, it is precisely this 'logic of diversity' which initiates a spontaneousaccelerationof policy making by political

INTRODUCTION

7

regulatory competition and mutual learning.18 The emergenceof various escaperouteshasbecome'secondnatureto Europeanpolicy-makingin all its inter-linked arenas' producing policy innovation and contributing to democraticlegitimisation. According to H6ritier, it is arguably simpler to accommodatemore rather than less diverse member-stateinterestswithin one polity: in the heterogeneouspolity, accommodationand compromise seeking becomes the cardinal feature of decision making.19 Similar conclusionshavebeenreachedby Lisa Martin, who arguesthat a diversity (or as she puts it, a heterogeneity)of interestscreatesopportunitiesfor trade-offsamongactorsand so increasesthe likelihood of agreementrather 2o True, diversity combined with the consensus-based than stalemate. decision-makingsystemcan sometimeslead to paralysis.But this is more decision-makingsystemthanof likely to be the fault of the consensus-based the diversity as such.21 Nor is diversity necessarily inimical to the democraticsystem.On the contrary, diversity, albeit cited as pluralism, is more commonlyseenas indispensableto democracy. Finally, the import of additionaldiversity from EasternEuropeis seento increasethe sheercostsof Europeanintegration.Sincethe applicantstates are poorerthan the current memberstates,and since most also have larger agricultural sectors, their potential accessioninevitably raises questions concerning the sustainability of existing EU programmes.Should vast agricultural subsidiesbe extendedto new members such as Poland or Romaniathat still maintain a fifth of their labour force in the agricultural sector?Should the greatestbeneficiariesof EU cohesionpolicy, including Greece,Portugalor Spain,agreethat most of the cohesionfunds now shift to new members from Eastern Europe? Can the existing redistributive system survive the eastwardenlargementwithout a drastic increasein individual states'contributions? The EuropeanCommissionprovideda partial answerto thesequestions in its Agenda2000 document,22which envisagedmodestreforms of the Common Agricultural Policy and the Cohesion Funds combined with certaincapson the subsidiesextendedto new members.Thus, for example, subsidieswere not to exceeda certain percentageof the national GDP and shouldbe matchedby domesticfunds. In this way, the contributionsby the individual memberstatesto the EU budgetwould not haveto be increased and the EU budgetitself would remainbalanced. But althoughthe Commissionanalysesand proposalsmay be valid, they have failed to convincemany politicians in the most affectedcountriesor thosevariouspressuregroupssuchas farmersor tradeunionsthat represent non-competitivesectorsof industry.23In this case,however,it is necessary

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to consider the interests of the Union as a whole as well as those of particularand sometimesparochialforces within it. Thus, for example,the net economicgains of enlargementto the Union are estimatedto be greater than the potential costS.24Moreover, the EU cohesionfunds are envisaged not as a gift or a kind of social policy, but as a meansby which weaker economiesmay be compensatedfor opening their markets.25 And even if onecannotfully endorsethe economicargumentthat integrationis likely to benefit the rich rather than poor and peripheral countries (see the contribution by Daniel Gros to this volume), it is undeniable that the applicantstatesfrom EasternEuropeare alreadyshoulderingheavycostsin the form of the structuraladjustmentsthat are necessaryto conform to the existing acquis communautaire.Thus, for example,it is estimatedthat the additional investmentcost simply for the environmentalacquis is likely to be aroundtwo per cent of GDP over a period of 15 years.26 In addition, and even more crucially, it is evident that the calculationof costsand benefits cannotbe confined to the economicsectoralone, and that the security and political gains from enlargementare likely to be much higher than the strictly economic gains. In fact, one may argue that integrating more divergentcountriessuch as Romaniawill bring about greaterpolitical and security rewardsthan integratingmore 'EU-compatible'countriessuch as the CzechRepublic,Hungary or Slovenia. For all of thesereasons,it can be arguedthat thereis little reasonto fear the various kinds of diversity in the Union that enlargementwill bring. While diversity can at timesjeopardisecertainforms of co-operation,it can also facilitate co-operationand hencefoster further integration. Diversity teaches adaptation, bargaining and accommodation.It is a source of competition,self-improvementand innovation. As such, it may also prove not only an important prerequisiteof democracy,but also of efficiency, in that it may be argued that it is only highly diversified and pluralistic societiesacting in a complexweb of institutional arrangements that are able to succeedin conditionsof modemcompetition. IDENTIFYING THE 'FAULT LINES' IN THE ENLARGED UNION

Democracy,Culture and Politics

But wherepreciselyare the 'fault lines' likely to lie in the newly diversified and enlargedEuropeanUnion? For a first answerto this question,Dieter Fuchsand Hans-DieterKlingemannhaveexaminedthe extentto which the citizens acrossthe wider Europesharepolitical valuesand behaviour.They also try to establishthe extent to which there are systematicdifferences

INTRODUCTION

9

betweenWestern,Central andEasternEurope, and to locate the possible cultural cleavages.In fact, their datareveal few differencesacrossEurope in the political valuesandbehaviourthat areessentialto democracy.In other words, no sharpthresholdcan be identified betweenWest andEast;instead, thereis a continuousdecline in the extentof a democraticcommunity.The potentialfor Europeansin Western,Centraland EasternEuropeto consider each other as democrats, and to integrate this understandingin their collective identity is thus considerable.At the sametime, however,Albania and the Slav successorstatesto the Soviet Union (Russia,Ukraine, Belarus and Moldova) representan important exception,in that in all elementsof the Fuchsand Klingemannanalysis,theseparticularcountriesreveala sharp contrastnot only with the WesternEuropeanstates,but also with thosein Central andEasternEurope.From the point of view of political culture, this analysissuggeststhat the easternborderof the EU would haveto be drawn to the westof thesecountries.This doesnot imply that thereexistsa wholly homogenouspolitical culture further to the west, however.Levels of selfresponsibilitydiffer markedlybetweenSwedenand Spain,for example,and a number of Central and EasternEuropeansalready approximateto the Spanishpattern.In addition, while per capitaGDP in Sloveniamay well be close to Westernlevels, its citizens neverthelessreveal a much lower level of civic engagementand social trust. David D. Laitin also analysesthe political cultures of applicant states, but this time with a focus on languageconfiguration,religious beliefs and popular culture. His findings are in line with those of Fuchs and Klingemann:thereis no clear-cutcleavagebetweenthe currentEU member statesand the applicantstatesfrom Centraland EasternEurope.Laitin also shows evidence of a pan-Europeanculture that is rapidly infusing the Europeanculture existsin applicantcountriesof the East.This transcendent conjunctionwith national cultures,which remain vibrant in both the West and the East. More to the point, the differencesamong national cultures within the current EU member statesare considerable,and the national cultures of the applicant statesfall well within the extremesset by these existing memberstates.In fact, Laitin arguesthat the cultural practicesof the applicant states are more proximate to the cultural practices of the original six EC membersthan are the cultural practicesof the later entrants. Applicant peripheralstatesoften have moremotivation to assimilateinto the norms of the centre than is the casefor the populationscloser to the centre. The argument of Vladimir Tismaneanuis much more sombre, even thoughheretoo thereis confirmationthat the key divides are not necessarily

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those betweenthe current EU, on the one side, and a collectivity of all Easternapplicantstates,on the other. Post-communisttransitionshave led to the emergenceof three different groups of polities - Central European successessuch as the Visiegrad three, protracted middle-of-the-road such transitionstatessuchas BulgariaandRomania,andquasi-democracies as Russia,the Ukraine and Moldova - which vary in terms of the extentto which a genuine democratic culture and practice can be seen to have becomeinculcated. What we see here, therefore, is not just a diversity createdby the meetingof Eastand West, but a diversity within eachof the two broadly defined communitiesthemselves.We have, in other words, a heterogeneous setof political cultures.But Tismaneanuis alsoconcernedto draw attention to the sheervulnerability of the post-communistsystems, plaguedby a Leninist legacy,on the one hand,and an all too brief period of democraticexperimentation,on the other, and the core of his argumentis devotedto teasingout nine threatsto the fledgling democracieswhich, in turn, could well impact on the overall legitimacy and effectivenessof the European project. But though sombre, Tismaneanu'sanalysis also reinforces the argument raised above, which is that the gains from enlargementshouldnot simply be seenin terms of economicsalone. As he rightly remindsus, andas hasalsobeenconsistentlypointedout by students of southernEurope,the attractionof membershipin the EuropeanUnion the 'magnetism'of a united Europe- can serveto strengthenthe hand of democratic forces in regimes which have had a long history of non7 In this sense, enlargementalso involves an democratic governmene important political imperative. Moreover, integration within Europe may servea more practicalpurposeby helpingto build the institutionswhich can protectdemocracyfrom its enemies.As Tismaneanupoints out, it is not so much that each and every post-communistpolitical culture is more vulnerableto non-democraticforcesthan eachandevery political culture in the West - the fault lines simply do not operatelike that - but rather that Western institutions have now developedto an extent that they afford substantialprotectionagainstsuchforces, whereassuchprotectionis often absentin the East.It is all very well to build on the gainsof liberalismin the post-communistpolities, he concludes,but it is also necessaryto take accountof the sheerfragility and vulnerability of thosegains. The question of the fragility of the democratic order in the postcommunist democraciesis also addressedin Darina Malova and Tim Haughton'soverview of the new institutionalstructuresthat havedeveloped during the 1990s.And here also the beneficialeffect of the pull exertedby the EU is highlighted. But Malova and Haughtonalso point to a paradox

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11

which appearsto develophere, in that the needto adaptto the demandsof the ED, and particularly the 'fast-track' procedureswhich have been adoptedin order to satisfy the requirementsof the acquis, may yet hinder consolidationin thosepolities where neither the actors nor the institutions have fully settled into place. In other words, while ED magnetism encouragesthe consolidationof democracy,the practiceof integrationoften poses severe institutional and legitimacy problems. Far from easing democratic fragility in post-communistEurope, enlargementmay well accentuateit, at leastin the shorterterm. Nor are the possiblesolutionsto these problems always necessarilyfavourable for democracy. Thus in drawing attention to processesof adaptationto the enlargedED, Malova and Haughtonsuggestthat one of the ways in which the applicantstatescan betterpreparethemselvesfor entry is by strengtheningtheir executivearms of government,a movewhich would reflect a recognitionof whereeffective powernow lies within the ED system.At the sametime, however,they also recognisethat this might well underminethe new commitmentto pluralism that has tendedto accompanydemocratisation,particularly in East-Central Europe. In this case, then, a solution which implies convergenceon an apparentexisting ED pattern, and hence one which seemsto demanda negationof the existing diversity of constitutionaland institutional forms, might well prove counterproductive. Market Institutions, Economicsand Welfare

As Laszlo Bruszt points out, it is at the level of marketinstitutions that the greatestdiversity can be seen. Yet again, however, there is no simple East-Westcontrastinvolved here. In fact, Bruszt points to threesourcesof divergencein the enlargedEurope. The first is the growing divergence within the East itself, and between the different countries, with the dominanceof a nationalist agendaand/or the 'capture of the state' by powerful economicinterestsin particularcountriesdriving a gap between the more and less reform-mindedpolities. Nor, as he argueshere, is this simply a problemthat can be solvedby various anti-corruptionmeasuresit goesmuchdeeperthanthat. The secondsourceof divergenceinvolvesthe building of institutions of economic development,and here the border betweenclustersof countriesdoesalmost inevitably follow the traditional East-Westdivide, with even the reform-mindedpolities of East-Central Europe still lagging behind the current ED member states. This gap, however, is likely to prove bridgeable with time. The third source of divergenceis to be found within the post-communistcountriesthemselves, across regions, sectors and social groups - dividing the more

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THE ENLARGED EUROPEAN UNION

'internationalised'or 'Europeanised'parts from the rest of the economy. But while Bruszt associatesthis problemonly with the non-EU members,it is neverthelessclear that a similar divide can be identified within the more establisheddemocracies,albeit perhapsat a less acute level. Indeed, it is precisely the consequencesof such a divide that have sometimesbeen associatedwith the recent rise of right-wing populist parties in Western Europe,many of which appearto win supportamongthoseseento be losing out in the shift to adaptto the needsof an increasinglygloablisedeconomy.28 The contribution by Oaniel Gros demystifies one of the most popular stereotypicalassertionsabout eastwardenlargement,that is, the assertion that embracingpoor economiesfrom EasternEurope will lead to various economicproblemsthat may well hamperEuropeanintegration.Gros does not deny that there is indeed a seriouseconomicgap betweenthe current memberstatesand the applicantsfrom EasternEurope. The total GOP at market prices and current exchangerates of the ten associatedcountries from EasternEurope amounts to only four per cent of the GOP of the current EuropeanUnion, or about one-ninthof the GOP per capita.29 The applicant countries are more dynamic than the current EU members, however,and, as Gros suggests,this is likely to prove more crucial for the future of Europeaneconomicintegration.When one looks at the experience of previouswavesof enlargement,problemswere usually causedby richer memberstatessuch as Belgium rather than by poorer, but more dynamic, statessuch as Portugalor Ireland. In other words, as Gros argues,it is the differences in economic 'health' rather than wealth that is the more important criterion in the evaluation of economic developmentsin the enlargedUnion, and in this respectthe applicantcountriesare doing pretty well comparedto the current member states. Growth rates are generally expectedto remain higher in the applicant statesthan in the current EU memberstates. Economic dataalso show that divergenceis cutting acrossthe traditional East-Westdivide. For instance, Austria's GOP per capita is more than double that of Portugal: $25,666comparedto $lO,167 (figures for 1997). Slovenia'sGOP per capita($9,039)is nearly as high as that of Portugal.In terms of broad indicators of economicstructuresit is also difficult to find strong systematicdifferencesbetweenthe candidatesand the current EU members.Thus Gros showsthat eventhe shareof agriculturein the GOPof most of the candidatesis quite similar to that of the poorermemberstates, while the candidates'shareof industry in GOP is also not notably different from some current memberstates.In fact, it is very difficult to make any firm judgementabout systemicdifferencesin economic structurebecause

INTRODUCTION

13

thereare suchlarge differencesevenamongthe presentEU members.There are also significant discrepanciesbetweenindividual applicant states,or even within individual stateswhere quite prosperousareashave developed aroundcapitalsor in regionsborderingon the more affluent West. All this, according to Gros, does not need to hamperthe economic growth in the Union. On the contrary, enlargementis likely to stimulate the overall economic growthwithin the enlargedEU with relatedbenefitsfor European integration. EconomicgapsbetweenEasternand WesternEuropeare also of course followed by social gaps, the subject of the analyses by Hans Jiirgen Wagenerand JanosMatyas Kovacs in this collection, and it is thesesocial gapsthat are evenmore fearedby the EU public and experts.Thereis some concernthat poverty and unemploymentwill prompt huge migratory flows from new to the old EU memberstates,and henceput the entire Western Europeanwelfare systemunderstrain. Someapplicantcountrieshavebeen slow to introduce any serious reforms of their over-centralised,rentseeking,paternalistand often corrupt welfare systems,while those in the region who haveembarkedon the road to social reforms seemto prefer the Americanratherthan Europeansocialmodel-the former relying largely on neo-liberal solutions, with the latter attempting to combine economic growth with social protection. of the Kovacsfocusesespeciallyon this latter questionin his assessment directions of the social reforms, if any, that are being undertakenby the applicantstates.And hereagain,the key questionis whetherthis will imply moredivergenceor moreconvergencewithin the enlargedEuropeanUnion. Kovacs does not question the statistical evidence that indicates some striking social gaps betweenthe two parts of Europe, especially in real 30 However,he also points out that most of these wagesand living standards. statisticsfail to take accountof the sizeableunregistered'shadow'economy in the region, in that citizensin many of the applicantstateshavelong been accustomedto coping with social shortfalls throughhouseholdproduction, the farming of small private plots, or throughwork in the 'second'informal economy.Moreover, somestatisticspaint too negative,if not misleading,a picture of the developmentof the applicantcountries'social problems.For instance,although unemploymenthas risen sharply in all applicant states sincethe beginningof the post-communisttransition,the currenthigh levels are actually comparableto those prevailing within parts of the existing Union. Kovacs also warns againstthe risk of elevating manifestationsof social differences between East and West to an almost mythical level, cautioning againsta presentationof EasternEurope simply as a region of

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THE ENLARGED EUROPEAN UNION

abandonedchildren, street beggars and tuberculosis patients that may spreadits social diseaseswestwardin the aftermathof EU enlargement. This is not to deny that EasternEuropedoesindeedhave serioussocial problemsinherited from decadesof communistdomination and from the unprecedentedeconomic recessionof the 1990s, and the path-dependent characterof the problemsis amply highlightedby Wagener'sanalysisof the adaptationwithin social security systems.However, Wageneralso shows how countriesin the region have already initiated reforms of their social securitysystems,and how in at leastsomecasesthesereformshavealready brought about someimpressiveimprovements.Moreover, accessionto the Union is likely to producefurther improvementsin social standardsin the region, largely througheconomicimpulsesacceleratedby enlargementthan through the EU redistributive systemas such. Finally, and from a strictly formal point of view, Wageneralso points out that social problemsshould not representa serious obstacle to accession,in that the social acquis comprisesa mere 70 directives. What Wagenerrefers to as the 'return to Europe'in this areathereforeoffers more degreesof freedom.He also adds that when comparedto the establisheddemocraciesin WesternEurope,the new democraciesof EasternEurope,much as thosein Latin America, tend to encounterless resistancefrom entrenchedinterests when seeking to implementradical reforms. At the sametime, as Kovacs admits, social transformationin Eastern Europehas as yet often beenquite modest,sometimesinconsistent,and not truly comprehensive.Most notably, in somecasesthe reform of health and educationhas beenlagging behind the reform of social welfare. However, he insists that EasternEuropeanreforms echo WesternEuropeanefforts at welfare reform, with the neo-liberal arguments being used by local politicians serving to make a virtue out of the necessityof introducing austerity measuresin the economy.Convergenceof social systemsis thus possible,but it is necessaryto adopt a dynamic rather than static view of such convergence,and to accept that it is globalisation rather than Europeanisationas such thatconstitutesthe prime motivator. In this sense, there may not be any stableWesternmodel to be emulated,for by the time any new rules of play are agreed,the position of the goalpostsmight have shiftedY It is also necessaryto recognisethat, as in the West, individual applicant countries also have their own social particularities,such as the corporatistrole of the Solidarity trade union in Poland'ssocial policy, the strength of social-democratictradition in the Czech Republic, or the substantialweight of informal welfare in Hungary. In fact, all of these diverse social models in both parts of the continent are being forced to

INTRODUCTION

15

introduce similar reforms under the pressure of global economic competition and interdependence,and, in some respects, as Wagener suggests,it is evidentthat someof the applicantstatesfrom EasternEurope have managedto cope with this global pressuremore quickly and more effectively than is the caseamong someof the currentEU memberstates. Here again, then, the idea of a clear borderbetweenEastand West proves too simple and misleading,with path dependencyand reform, both being constrainedby global pressures,producing increasedheterogeneityin the West and in the East. CONCLUSION

The forthcoming Easternenlargementis often cited as threateningto water down the entire integrationproject. Indeed,for someEurosceptics,this is part of the appealof enlargement.Among thosecommittedto the Union, however,there are many voices expressinga fear that increasingdiversity and differentiation will preclude more advanced forms of European integration. In many respects,as this collection shows, thesefears are ill-founded. Diversity exists both among the existing EU memberstatesas among the applicants,and the line betweenunity and diversity does not follow the post-warEast-Westborder. Moreover, it has beenthe end of the cold war rather than the prospectof enlargementas such that has forced the EU to rethink andreadjustthe integrationproject.Enlargementis a responseto the new post-cold war developments.It is not in itself the source of the difficulties. The fact that the long-standing ideological and military East-Westdivide no longerexistscannotbut affect the shapeand ambition of Europeanintegration,and thosewho seekto proceedwith integrationas if nothing had happenedin Europe a decadeago risk acting like homeownerswho insist on running an air conditioning systemin a housethat no longer has any walls.32 In short, it is the Europeanintegrationproject that needsto be adjustedto enlargement,and not the other way around. All this doesnot meanthat we needto endorseall kinds of diversity. But it doessuggestthat Europeneedsto learn to cope with diversity in a more creative, pragmatic and relaxed manner. This would hardly be possible without more information about what precisely the evolving patternsof diversity in the new Europe involve, and this collection of papers is intendedto help us accomplishthat aim. But there is another side to this argument,and this time one which applies particularly to the newly establisheddemocraciesof post-

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THE ENLARGED EUROPEAN UNION

communistEuropeandhow preciselythey are adapting.It is now little more than a decadesince the democraticforces in EasternEuropeseizedcontrol from the communistregimes.This wasoneofthe high pointsin a the worldwide 'third wave' of democracy,and involved the creationof more or less pluralist political regimes which, after half a century of communistrule, were finally restoredto democraticcontrol and accountability.It was, by any standards,a remarkabletransformation,and that so manyof thesestates havemanagedto build and maintainmoreor lessfull democraticlegitimacy in the succeedingdecadeis no mean achievement. Now, however,many of thesecountriesare on the verge of joining the EuropeanUnion system,a systemwhich itself is often depictedas one lacking propermechanismsof popular accountabilityand control, and as one which suffers from a much decried democratic deficit. True, the European Union insists that the applicant statesmeet formal democraticcriteria, and this is an important condition. But it is also evident that the practice of EU democracyoften works against transparency, accountability and active popular participation.33 What it appearsto offer instead,as Scharpfhassuggested,is a governmentfor the peopleratherthan a governmentof the people,andone basedon what he calls output-orientedlegitimacyratherthaninput-oriented legitimacy.34 In other words, having secured democracy after decades of nondemocraticrule, the post-communistpolities are now seeking entry to a systemin which democraticvaluesdo not necessarilyseemto be prioritised. Democracywas an object of strugglein EasternEurope.In many respects, however, it seemsincreasingly a matter of indifference within the more comfortableWest. Here also, then, may be a sourceof diversity. But in this caseit may be a decidedlywelcomeone. For it is perhapsin the enlarged Europethat the practiceof democracywill finally acquirea much-needed impulse. NOTES This introductiongreatly benefitedfrom thoughtful commentsby Helen WallaceandAnia KrokPaszkowska. I. While diversity involves difference, divergenceusually implies moving further apart. See also Christina Schaffner, AndreasMusolff and Michael Towson, 'Diversity and Unity in EuropeanDebates',in AndreasMusolff, Christina Schaffnerand Michael Townson (eds.), Conceivingof Europe: Diversity in Unity (Aldershot: Dartmouth1996), pp.l-14. 2. See Tanja A. Borzel and Thomas Risse, When Europe Hits Home: Europeanizationand DomesticChange(Florence:RSCIEUI Working Papers,no. 56, 2000). 3. See,for example,Wolfgang Wessels,'An Ever Closer Fusion?A Dynamic Macropolitical View on IntegrationProcess',Journal of CommonMarket Studies35 (1997), pp.267-99,or

INTRODUCTION

17

RobertLeonardi, Convergence,Cohesionand Integration in the EuropeanUnion (London: Macmillan 1995), pp.33-59. 4. This is regardlessof the preambleto the Treatyon EuropeanUnion that talks about 'creating an ever closer union'. See, for example,the 1989 addressby JacquesDelors in Bruges, reprinted in Brent F. Nelsen and Alexander C.-G. Stubb (eds.), The European Union. Readingson the Theory and Practice of European Integration (London: Lynne Rienner 1994), pp.51-64. 5. Thosewho insist that their aim is a qualified ratherthan a total unity thereforeneedto make it clearwhat mixture of diversity and unity they want to achieve.However,this is usually not the caseeven in otherwisevery competentanalyses.See,for example,Eric Philippart and Monika Sie Dhian Ho, 'From Uniformity to Flexibility: Managementof Diversity and its Impact on the EU Systemof Governance',in Gnunnede Burca and JoanneScott (eds.), ConstitutionalChangein the EU. From Uniformity to Flexibility? (Oxford: Hart Publishing 2000), pp.299-336. 6. SeeT. Koopmans,'The Questfor Subsidiarity',in Deirdre Curtin and Ton Heukels (eds.), Institutional Dynamicsof EuropeanIntegration. Essaysin Honor of Henry G. Schermers (Dordrecht: Martinus Nijhoff Publishers1994), and Alexander C.-G. Stubb, 'Negotiating Flexible Integrationin the AmsterdamTreaty', in Karlheinz Neunreitherand Antje Wiener (eds.), European Integration After Amsterdam.Institutional Dynamicsand Prospectsfor Democracy(Oxford: Oxford University Press2000). 7. See Loukas Tsoukalis, The European Community and its Mediterranean Enlargement (London: Allen and Unwin 1981). 8. Giuliano Amato and Judy Batt, Final Report of the Reflection Group on The Long-term ImplicationsofEU Enlargement:The Nature of the New Border (Florence:RobertSchuman Centreand Forward StudiesUnit, EC 1999), p.11. 9. Vaclav Havel, 'Overcomingthe Division of Europe', Speechto the EuropeanParliament, Strasbourg,16 Feb. 2000 (http://www.hrad.cz). 10. HeatherGrabbe,A Partnershipfor Accession?The ImplicationsofEU Conditionalityfor the Central and East EuropeanApplicants(Florence:RSCIEUI Working Papers,no. 12, 1999). SeealsoAlina Mungiu-Pippidi, 'Facingthe Desertof Tartars:the EasternBorderof Europe', in Europe Unbound(London: Routledge2(02). II. See, for example, Helen Wallace, 'Whose Europe is it Anyway?', European Journal of Political Research35/3 (1999), pp.287-306,and Helen Wallace, 'The Domesticationof Europe: Contrasting experiencesof EU Membership and Non-membership',Daalder Lecture,Leiden University, 1999. 12. GrahamAvery and FraserCameron,The Enlargementof the European Union (Sheffield: Sheffield AcademicPress1998). 13. Adrienne Heritier, 'Differential Europe: The European Union Impact on National Policymaking',in AdrienneHeritier et al., Differential Europe. The EuropeanUnion Impact on National Policymaking(Boston: Rowman& Littlefield 2001), p.2. 14. See Helen Wallace and William Wallace, Flying Togetherin a Lorger and More Diverse EuropeanUnion (The Hague:Working Documentsof the NetherlandsScientific Council for GovernmentPolicy, no. 87, 1995); andJonathanStory, 'The Ideaofthe Core: The Dialectics of History and Space', in Geoffrey Edwards and Alfred Pijpers (eds.), The Politics of EuropeanTreaty Reform(London: Pinter 1997),pp.15-43. 15. This doesnot meanthat the interpretationand applicationof the acquis is always rigid and inflexible. See Claus-DieterEhlermann, 'How Flexible is Community Law? An Unusual Approach to the Concept of Two Speeds', Michigan Low Review, 82/5-6 (1984), pp.1274-93. 16. See, for example, Fritz W. Scharpf, Governing in Europe: Effective and Democratic? (Oxford: Oxford University Press1999). 17. SeeWilliam Wallace, 'Governmentwithout Statehood:The UnstableEquilibrium', in Helen Wallace andWilliam Wallace(eds.),Policy-Making in the EuropeanUnion (Oxford: Oxford University Press,3rd edn. 1996). 18. See Adrienne Heritier, Policy-Making and Diversity in Europe. Escaping Deadlock (Cambridge:CambridgeUniversity Press1999), p.2.

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THE ENLARGED EUROPEAN UNION

19. Heritier, Policy-Makingand Diversity in Europe, p.8. 20 Lisa L. Martin, 'Heterogeneity,Linkage and CommonProblems',in RobertO. Keohaneand Elinor Ostrom (eds.), Local Commonsand Global Interdependence(London: Sage 1995), pp.79-91. 21. Note Nicholas Rescher'sargument:'Consensusis not a criterion of truth, is not a standard of value, is not an index of moral or ethical appropriateness,is not a requisite for cooperation,is not a communalimperativefor a just socialorder, is not, in itself, an appropriate ideal ... Consensusis no more than one positive factor that has to be weighedon the scale along many others.' SeeNicholas Rescher,Pluralism: Against the Demandfor Consensus (Oxford: ClarendonPress1993), p.199. 22. EuropeanCommission(1997), Agenda2000 (http://europa.eu.intlcommlagenda2000/rapid 9716fr.htrn). 23. It should be stressed,however, that accordingto successiveEuro-barometerpolls, public opinion in Spain,Portugaland Greeceis more in favour of enlargementthan that in countries suchas Germanyor Austria. It would also clearly be wrong to interpretthe result of the Irish negativevote on the Treaty of Nice as a sign of oppositiontowardsthe Easternenlargement. Moreover,as Urlich Sedelmeierpointedout, an analysisof the negotiationsleadingto the socalled AssociationAgreementsbetweenthe EU and Central and EasternEuropeanstates revealsthat the main oppositionto a more far-reachingaccommodationwas not primarily the result of national differencesamongmemberstates,but camepredominantlyfrom sectoral policy, both within the Commissionand within the memberstategovernments.SeeUlrich Sedelmeier,'East of Amsterdam:The Implications of the AmsterdamTreaty for Eastern Enlargement',in Neunreitherand Wiener, European Integration After Amsterdam,p.232. See also Jose Torreblanca, 'Overlapping Games and Cross-Cutting Coalitions in the EuropeanUnion', WestEuropeanPolitics 2112 (1998), pp.134-53. 24. SeeR.E. Baldwin et al., 'The Costsand Benefitsof EasternEnlargement:The Impacton the EU and CentralEurope',EconomicPolicy 24 (April 1997), pp.125-76. 25. See Robert Leonardi, Convergence,Cohesion and Integration in the European Union (London: Macmillan 1995), p.4; and Liesbet Hooghe(ed.), CohesionPolicy and European Integration (Oxford: Oxford University Press1996), pp.5-6. 26. Alan Mayhew, Recreating Europe: The European Union's Policy towards Central and EasternEurope (Cambridge:CambridgeUniversity Press1998). 27. SeeJanZielonkaand Alex Pravda(eds.),DemocraticConsolidationin EasternEurope, Vol. 2: International and Transnational Factors (Oxford: Oxford University Press2001). See also LeonardoMorlino, DemocracyBetweenConsolidationand Crisis: Parties, groupsand citizensin southernEurope (Oxford: Oxford University Press1998). 28. See,for example,Hans-GeorgBetz, RadicalRight-WingPopulismin WesternEurope (New York: St. Martin's Press1994). 29. It is important to keep in mind, however, that most statisticsdo not take into accountthe sizeableunregistered'second'or 'shadow'economyin this region.Seealsobelow. For some basic economicdata comparingthe easternand the westernpart of the continentsee e.g. http://www.evd.nllmain.aspor http://www.worldbank.orglecaleu-enlargementlindex.htrnl. 30. For instance,in the mid-1990smore than one-thirdof Polesand Hungarianswere found to be living in poverty with falling life expectancy.The datafor Bulgariaand Romaniaare even more dramatic.See,for example,Daniel Vaughan-Whitehead,'Economicand Social Gaps, New Hidden Bordersin the EnlargedEurope?'EUI Working Papers(RSC,No. 29 Florence, 2(00), esp. pp.19-20. 31. For a recent assessmentof the changingface of the West Europeanwelfare regimes,see Maurizio Ferreraand Martin Rhodes(eds.), RecastingEuropean Welfare States(London: Cass2(00). 32. Timothy GartonAsh, 'Europe'sEndangeredLiberal Order',Foreign Affairs 77/2 (1998),p.61. 33. As Ralf Dahrendorfrecently noted: 'The Union has now laid down very serioustests of democraticvirtue for so-called accessioncountries.If, however, it applied these tests to itself, the Union, the result would be dismal.' See Ralf Dahrendorf, 'Can European DemocracySurvive G1obalisation?',Policy-NetworkAnalysis, 15 Oct. 2001. 34. SeeScharpf,Governingin Europe,esp.chapter1.

Eastward Enlargement of the European Union and the Identity of Europe DIETER FUCHS and HANS-DIETER KLINGEMANN

Until the Maastricht Treaties (1991), the European Community was primarily an economic community legitimated by economic efficiency criteria.I Maastricht, however, initiated the transformation of the Communityinto a EuropeanUnion (EU), which continuedwith the Treaty of Amsterdam(1997). Thesetreatiesvestgreaterpowersin EU institutions. The EU is thus increasinglya supranationalregime,substantiallyrestricting member states' scope for action, and whose decisions directly affect citizens' lives. Thesedecisionsalsoaffect politically sensitiveareasthat had hitherto beendealtwith at the nation-statelevel (including social andmoral issues). These developments have been politicising the EU and, consequently,engenderinglegitimation problems. The discussionon the democratic deficiencies of the EU, which has arisen only since this transformation of the European Community, is an expression of the legitimation issue.Many feel the EU can attain democraticlegitimacy only if a Europeandemos with a collective identity takes shape.2 This can be maintained even if the democratic deficiencies of the EU were to be eliminated institutionally by substantially expanding the rights of the EuropeanParliament.A viable Europeandemocracyrequiresa European demosthat conceivesof itself as a collectivity, considersitself represented by the Parliament,and makesthe latter the addresseeof relevantdemands. However, in view of the cultural plurality and heterogeneityof European nation states,it is doubtful whetherthe constitutionof a Europeandemos with a tenablecollective identity is possibleat alP A further transformationof the EU must increasethesedoubts. At the 1992 Copenhagensummit, the then EU headsof governmentdecidedthat the countriesof Centraland EasternEuropecould becomemembersof the EU if they so desiredand if they meet certaincriteria for accession.There are now a numberof candidatesfor accession,and negotiationsare being conductedwith a first group of countries.For a numberof reasons,eastward

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THE ENLARGED EUROPEAN UNION

enlargementis likely to make it even more difficult to developa European identity. First, becausethe territorial limits of Europeare vague:wheredoes it end in the east,or where should it end?A clearly defined territory is at least a useful, indeednecessary,preconditionfor the cognitive constitution of an 'us' that distinguishesitself from 'others' and which is the vehicle of a collective identity.4 Second,including additional nation statesincreases the cultural plurality of the EU still more. And, third, it cannotbe excluded that, over and above this pluralisation, there is a cultural gap between WesternEuropeand Centraland EasternEurope.Sucha gap can be caused by different traditions and historical eventsin the distant past but also by socialisation and experiencein the opposing societal systemsin which people in Easternand WesternEurope lived from the end of the Second World War until the collapseof the communiststates. A collective identity can develop only on the basis of commonality amongthe membersof a definablecommunity.It is an openquestionhow comprehensivethis commonalitymust andcan be in the caseof a European demos.We assumethat homogenisingthe plurality of national culturesto form a Europeannationis a projectthat is neitherpracticablenor useful.For a Europeandemos before which the EU regime can be legitimated and which participatesin the democraticprocessesin Europe,common political valuesand behavioursare presumablyquite sufficient. With this premisein mind, our empirical goal is to establish the extent to which such commonalityexistsin individual countriesor whetherthereare seriousand systematicdifferences. This analysisis structuredby two theoreticalconsiderations.First, we assumethat political value orientationsand behaviourscan be organisedin meaningfulpatterns.In determiningthesepatternswe draw on the concepts of the democraticcommunity and various types of democraticcommunity. The most importantcriterion is supportfor democraticrule and rejectionof autocraticrule. The greatestpossibleagreementon these preferences is a necessarycondition for a Europeandemos.However,fundamentalsupport for democracyrevealsnothing aboutthe ideason how democracyshouldbe specifically implementedand structured. To settle this question, further values and behavioursmust be taken into account. They form specific patterns,and,with referenceto the democratictheorydebate,we distinguish different types of democraticcommunity. Second,our analysisof differencesin political values and behaviours considersnot only individual countriesbut groupsor families of countries. The country groups are distinguishedon the basis of criteria proposedby Huntington,Lipset and Reisinger.5

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

21

The plannedanalysiscancontributeonly to discoveringthe potentialfor the formation of a Europeandemoswith a collective identity. Empirically established,objectivecommonalitycanhavean identity-forming effectonly if it is perceivedas such and finds its place in the self-descriptionof the collectivity. However,this transformationof objectivecommonalityinto the of a collectivity presupposesa great deal. In subjective self-understanding the case of a European demos, one of the prerequisitesis certainly a Europeanpublic6 that can make latent commonalityvisible and allow it to becomepart of people'sself-conception.However,this is not the subjectof our study. We limit ourselvesto the priority investigationof whetherthere is suchcommonalityat all. The study proceedsin three steps. First, the conceptsof democratic community and types of democratic community are presented. The empirical analysis follows. It begins by explicating the classification of countries and by stating a number of theoretical expectations.In the empirical analysisitself, we first establishthe extent to which the societal community in individual countries and groups of countries can be considereddemocraticat all. We then determinewhat type of democratic community predominatesin these countriesand groupsof countries.In a third and final step, we summarisethe empirical findings and draw a number of conclusions on the formation of a European demos with a collective identity. THE CONCEPT OF THE DEMOCRATIC COMMUNITY

The demosof a democracyis a certainform of societalcommunity.And like 7 First, every societalcommunity it is constitutedthrough two mechanisms. by drawing a boundarythat defineswho is includedand who is excluded.In modemsocieties,citizenshipprovidesa formal boundary.But it can have a constitutive effect only if it is subjectively assimilatedby membersof the community.This requirescognitively identifiablecriteria, and one important such criterion is a clear territorial boundary.Second,a societalcommunity takesshapethroughthe ties betweenmemberson the basisof things actually or presumedto be shared.Only through thesetwo mechanismsdoesa mere aggregateof individuals becomea communitythat presentsandcandescribe itself as such,and with which memberscan also identify. The form of societalcommunity that interestsus is the demos,which, as the subject of a democraticform of government,should be a democratic community.8If it is to be acceptedas such, it has to exhibit certain minimal characteristics.The institutional order of a democracy(kratos) can function

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THE ENLARGED EUROPEAN UNION

only if there is a correspondingcommunity (demos). In determining the propertiesof a democraticcommunity we draw on an analytical model that divides democracyinto three hierarchically structuredlevels.9 The topmost level is that of political culture, whose constitutive elements are the fundamental values of a democracy. The next level is that of political structure, which consists of the democratic systemof governmentof a country, generally laid down by the constitution. This structure can be understood as a selective implementation of the cultural values of a communityfor the action contextof politics, and this systemof government is also legitimated by recourseto these values. The lowest level in the hierarchyis that of the political process.The political processis concerned with the realisationof the collectivegoalsof a communityby the actors.Their action is controlled by the political structure,and this means,among other things, that normativeexpectationsaboutthe behaviourof political actorsare associatedwith the constitutedsystemof governmentin a given country. The three levels thus form a control hierarchythat beginswith culture and ends with the processor actualactivity on the part of actors.What attributesmust a communityhaveat thesethreelevels if it is to be deemeddemocratic? At the cultural level, a democraticcommunityis characterisedaboveall by supportfor the fundamentalvaluesof democracy.They include the idea of self-governmentor sovereigntyof the people.And this includesmutual recognition of citizens as free and politically equal. Since the birth of democracy in ancient Athens, the two values of freedom and political equality havebeen essentiallyboundup with that of democracy.!O A democraticcommunitycannotbe as clearly identified at the structural level as at the cultural level. On the one hand, it must be expectedthat the regime in the citizens' own country is supportedin so far as it is a democracy and not an autocracy. Otherwise approval of the idea of democracywould be completelynon-committal.On the otherhand,the idea of a democracycan be institutionally embodiedin different ways. For this reason,many peoplemay basically want a democracybut not in the form that exists in their country. Peoplemay therefore support or criticise the democracyimplementedin their country for a variety of reasons." They may supportit becauseit is a democracyand as such has institutionalised the ideaof democracy.They may criticise it becausethey feel that the reality of democracyin their country fails to meet their own normativeideas of democracy,and becausethey also assumethere are alternative forms of implementationthat producea betterdemocraticreality. Suchpeoplecanbe describedas 'critical democrats'.12Both possibilities are compatiblewith the prerequisitesfor a democraticcommunity.

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

23

Theprocesslevel is concernedwith the realisationof political objectives by producing collectively binding decisions.In pluralistic societies,such goals are always controversial, and conflicts about them are the very essenceof democratic processes.A democratic community is thus not characterisedby consensus,howeverunderstood,about the political goals to be attainedbut only by actualcompliancewith the proceduralnorms for taking action as laid down by the constitution,and which are intendedto regulateeverydaypolitical conflicts. Figure 1 showstheseattributesof a democraticcommunityin the form of 'the more- the more' statements.They constituteoperationaldefinitions that provide a point of referencefor later empirical analysis.As we have argued, a democraticcommunity is characterisedat the processlevel by compliance with the democratically establishedlegal norms. The prohibition of violenceor force as a political instrumenthaspre-eminentstatus among these legal norms, becauseit affects the essenceof successful integrationinto a community.The figure thereforecontainsan independent operationaldefinition of force as a meansof politics. Having establishedthe characteristicsof a democraticcommunity, we proceedto differentiate different types. For the purposeof our study we combinea theoreticalwith a pragmaticapproach.Theoretically,we follow the contemporarydiscussionin political philosophy,J3and pragmaticallywe are guidedby indicatorsavailablein the 1995-99World ValuesSurvey.We FIGURE 1 OPERATIONAL DEFINITIONS OF A DEMOCRATIC COMMUNITY

Systemlevel

Basic elements Operationaldefinitions

Culture

Values

Structure

Rules and institutions

Process

Actions

The strongersupportis for a democracyand the more strongly autocracyis rejected,the more closely the societal community will correspondto a democraticcommunity. The more strongly othercitizensare recognisedas free and equal,the more closely the societalcommunity will correspondto a democraticcommunity. The strongersupportfor or critique of democracyin one's own country is basedon democraticnorms,the more closely the societalcommunity will correspondto a democraticcommunity. The lesscitizensuseforce as a political means,the more closely the societalcommunitywill correspondto a democraticcommunity. The more closely citizensconform to the democratically determinednorms of action, the more closely the societal community will correspondto a democraticcommunity.

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THE ENLARGED EUROPEAN UNION

begin with a simplified descriptionof the types,bringing in a dimensionat the cultural level that has hitherto beenneglectedby empirical democracy research,namely the ethosof a community. It has two points of reference, first, the ethical values by which a personordershis life and, second,the ethical values governing relations with other members of the societal community. This ethosof the communityis the subjectof one of the most important democracytheory debatesto havebeenconductedin recentdecades.It is not dealt with in detail at this point but the aspectsthat are important for the analysis- the differentiation of the democraticcommunity- are reiterated. The debate has been provoked by the tension between the freedom of individuals and the demands of the community. Differing normative positionsare apparentprimarily in the priority given to the one or the other. This generalcontinuum,with the polesindividualismandcommunity,canbe divided into two dimensions, which have already been mentioned in discussingthe ethos of the community. The one dimension addressesthe fundamentalquestionof who bearsthe principal responsibilityfor shaping and determininga person'slife: the individual himself or the state, which representsa specific form of community institutionalisation. The other dimension is concernedwith the just as fundamental question of how relationsbetweenindividuals shouldbe. The one alternativeis performancedriven competitionbetweenindividuals in the various marketplacesand the other is co-operationand solidarity in dealing with one another.14Crossing thesetwo dichotomousdimensionsproducesa typology with four normative models of democracy and the corresponding types of democratic community: libertarian,liberal, socialistand republican(seeFigure 2). The contrastingand, as it were, pure models are the libertarian and socialistcommunities.On both dimensionsthey give clearestpriority to one or other alternative.The liberal model differs from the libertarianprimarily through equality of opportunity in competitionbetweenindividuals in the economicand political marketsas a criterion of justice. And justice is the mostimportantstandardby which to evaluatesocietalinstitutions.The most prominent advocateof this model is Rawls.15 Given differencesin ability and temperament,equality of opportunitycanbe ensuredonly throughlegal regulation and redistribution by government.Governmentthus plays an extremely important role in shapingthe life of the individual. The liberal model differs from the socialistmodelin threeways. First, redistributionby governmentis concernedonly with the most equal possibledistribution of the primary goods that are absolutely necessaryfor the individual to organisehis life autonomously.Second,the principles of competitionand

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25

FIGURE 2 TYPES OF A DEMOCRATIC COMMUNITY

Responsibilityfor one'sown fate

Relationship with others

Self

State

Competition

Libertarian

Liberal

Co-operation (Solidarity)

Republican

Socialist

perfonnanceare constitutive for the relationship betweenindividuals in everydayinteraction in the marketplace,in politics, and in other areasof society_ And, third, in the eventof conflict, individual freedomalways has unrestrictedpriority over the equaldistribution of the other primary goods. Among other things, this meansthat, in contrastto the socialistmodel, basic social rights ought not to be included in the constitution. Ensuring equality of opportunity can be only a political task, which, in practical tenns,resultsin the establishmentof a more or lesscomprehensivewelfare state.Overall, the role of governmentin the liberal model is thus relatively lessrestrictedthanin the socialistmodel.This differenceis not visible in the dichotomisedtypology. From an institutional point of view, the ethical valuesof the libertarian community meanas little governmentas possible and as comprehensivea market as possible; and those of the socialist community meana comprehensivewelfare stateand a limited market.The liberal communityoccupiesan intermediateposition. The republican community differs most strongly from the others. Moreover,it canbe consideredthe normativelymostdemanding.In contrast to the liberal community,commonvaluesare of crucial importance,and, in case of doubt, are given priority over the unrestrictedfreedom of the individual. The lifestyle of a republican community is 'essentially cooperativeand solidaristic'.16 It differs from the liberal and especiallyfrom the socialistcommunityby a fundamentallyanti-etatistandanti-paternalism attitude.In this regardit resemblesthe libertariancommunity.According to repUblican ideas, community values should be implemented not by government,and thus on behalf of the citizens, but by the community of 17 For this reasonthe self-organisation of the citizenry in citizensthemselves. local units is an essentialrepublicanpostulate.The republicancommunity is thus a participatory and solidary community. The solidarity concept differs considerablyfrom that upheldin the socialistcommunity.It presents

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THE ENLARGED EUROPEAN UNION FIGURE 3 TYPES OF A DEMOCRATIC COMMUNITY (SCHEMATIC DESCRIPTION)

Cultural level Responsibilityfor one's own life Relationshipwith others

Libertarian

Liberal

Socialist

Republican

Self

Self + State Competition+ Equal opportunities Tolerance

State

Self

Solidarity (abstract)

Solidarity (specific) Trust Tolerance

Competition

Ethic idea of the good Structural level Ownershipof meansof production

Managementof enterprises Processlevel Political motivation Civic engagement (voluntary associations)

Private ownership Entrepreneur

Private ownership

Private ownership+ Stateproperty Entrepreneur+ Employee High High

itself as voluntary supportfor peoplein needthroughno fault of their own, or as voluntary charitableness.Solidarity in a socialist community, by contrast, is exercisedthrough collectively binding decisionsby the state and, moreover,is characterisedby a strongconceptof equality. The ideas about a republican community that were developedin the contextof normativedemocracytheory havebeentakenup in an empirical researchcontextespeciallyby Putnam.18 Putnamhimselfusesthe conceptof civic community.The dimensionsand attributesof the civic communityare compatiblewith our analyticaldistinctions.Putnamassumesfrom the outset that the civic community is democratic, and accordingly exhibits correspondingattitudestowards the democraticsystemof government.He thereforeconcentrateson the ethosof the community and the behaviourof its membersthat it engenders.At the level of political culture, Putnamsees several values as characteristicof the community. In the first place he emphasisespolitical equality, while stressing- fully in keeping with the republicantradition - that this includesequalrights and duties for all. This value is particularly important for the relationship between individual members of the community and its institutions. The other values are concernedwith interactions among members of the community. They should be guided by solidarity, toleranceand trust. The citizens of a civic community are thus explicitly not egoistic-rationalpeople,as is assumed,

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

27

for example, in the libertarian model of democracy. A decisive characteristicof a civic community is, according to Putnam, a strong commitmentamong citizens to political participation. Putnammakes two specificationsin this regard. First, an orientationtowards the public good: 'Participationin a civic community is more public-spirited,more oriented to sharedbenefits.'19 On the other hand,the decisiveform of participationis in voluntary associations.According to Putnam, active membershipin voluntary associationscontributesto the generationof the valuesmentioned and the associatedability and willingness for co-operativebehaviour in realising the public good. Figure 3 showsthe four types of democraticcommunity schematically in terms of the attributesdescribedabove.The two dimensionsunderlying the typology in Figure 2 have naturally been taken into account. A characteristicis usedin describinga type of democraticcommunityonly if this is clearly justified on the basisof the democracytheory discussion. EMPIRICAL ANALYSIS

Classificationof Countriesand TheoreticalExpectations As the predecessor of the EuropeanUnion, the EuropeanCommunitycame into being during the period of the East-Westconflict. It thereforeincluded only Western European states, with France and Germany as the core countries.They provided relative economicand cultural homogeneity,and the border questiondid not arise. To the west, north and south, the border was defined by the coastline,and to the eastby the Iron Curtain. After the collapseof communism,the eastwardborder dissolved, and the question where the easternbounds of Europe ought to be set and who should be consideredpotentialmembersof the EU cameonto the agenda.2O Dependingon what criteria are applied, this questionfinds a variety of answers.The criterion of our studyis the similarity of political communities in the countries of Central and EasternEurope to those of the Western Europeancountriesthat have hitherto constitutedthe EuropeanUnion. The basic assumptionis that the potential for the formation of the European demoswith a collectiveidentity is proportionateto the similarityof political valuesand behaviours.Before we tackle the empirical analysis,we classify the countriesunder study and attempt on this basis to formulate what we expectof the analysis. Political values and behavioursare influencedby various factors; most importantly, perhaps,by durablecultural traditions.21 A useful startingpoint for classifying countriesis thus the distinction betweencivilisations drawn

28

THE ENLARGED EUROPEAN UNION

by Huntington. He postulatesa historical cultural borderlinewithin Europe that divides the Western-Christianpeoplesfrom the Muslim and Orthodox peoples. This dividing line ultimately goes back to the division of the RomanEmpire in the fourth century, consolidatedin the sixteenthcentury. If one were to take account of this cultural border only, the frontier of Europewould be clearly definable.It would run whereWesternChristianity endsand Islam begins.22This definition is basedaboveall on religion, and this is dichotomised:Protestantand Catholic vs. Orthodoxand Muslim. For the purposesof our analysis,this is too greata simplification. We therefore draw on two further criteria to producea more differentiatedclassification of countries, basing our procedureon democracytheory approachesand findings.23 These two additional criteria are the different empires in which the peoples concerned lived for centuries, namely the British, Habsburg, Russian and Ottoman empires. The links between these empires and specific religions (Protestant,Catholic, Orthodoxand Muslim) are obvious, but it canbe assumedthat the respectivesystemof governmenthasan independent impact on fundamental values. They are, for example, to be associatedwith the extentof autocraticrule in the different empiresor with the different degreeof separationbetweenstateand church. The Soviet Empire can be regardedas a specific variant. Russiaformed the centreof this empire, and its sphereof influenceincludedfirst the other Soviet republics, and secondthe countriesof Central and EasternEurope within the Iron Curtain. Unlike the other empires,the Soviet Union and its satellite stateshad definitely no religious basis.The impact on the political attitudesand behavioursof the citizenry is affectedby the autocraticsystem of governmentand the egalitarianideology.24 Reisingersuggeststhat this impact varies dependingon the length of time during which a country had a Leninist regime.25 In addition to religion, empireand Leninist regime,we draw on a fourth characteristic,the level of socio-economicmodernity. It is operationalised by per capita GDP. The modernity and wealth of a country are amongthe most importantpreconditionsfor the formation and stability of a democracy and for the developmentof democraticand liberal values. This has been repeatedlyestablishedby Lipset,26 and can be consideredone of the best confirmedfindings of empirical democracyresearch. Tables 1 and 2 classify countriesin terms of the dimensionsexplained. Description in terms of 'empire' and 'modernity' (Table 1) is relatively unproblematic.It is a little more complicatedwith 'religion', since most countriesare mixed in this respect.Table 2 showsthe sharesof individual

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

29

TABLE I CULTURAL HERITAGE. A CLASSIFICATION OF COUNTRIES BY EMPIRES, DURATION OF LENINIST REGIMES AND MODERNITY

Countries

Empires (crudeclassification)

Modernity (GDP ppp in US $)

Anglo-Americancountries USA Australia New Zealand

British (-) British (-) British (-)

29.080 19.510 15.780

WesternEuropeancountries Norway Sweden Finland West Germany Spain

None (Sweden)(-) None (-) Russian(-) None (Prussia)(-) None (Spain) (-)

24.260 19.010 19.660 24.345 15.690

Central Europeancountries EastGermany CzechRepublic Slovakia Hungary Slovenia Croatia

None (Prussia)/Le41 HabsburglLe41 Habsburg/Le 41 Habsburg/Le 43 HabsburglLe 18 HabsburglLe 18

17.995 10.380 7.860 6.970 11.880 4.930

Baltic countries Estonia Latvia Lithuania

Russia!Le 50 Russia!Le 50 Russia!Le 50

5.090 3.970 4.140

South-EasternEuropeancountries(mainly Orthodox) Yugoslavia Ottoman!Le 18 Romania Ottoman!Le 43 Bulgaria Ottoman!Le 43

3.500 4.270 3.870

South-EasternEuropeancountries(mixed-Muslim) Macedonia Ottoman!Le 18 Bosnia-Herzegovina Ottoman!Le 18 Albania Ottoman!Le 45

3.180 2.358 2.170

EasternEuropeancountries Russia Ukraine Belarus Moldova

4.280 2.170 4.820 1.450

Russia!Le 74 Russia!Le 74 Russia!Le 74 Ottoman!Le 50

Notes: Le = years of Leninist rule (Reisinger 1999 and own calculationsfor Albania, East Germany;and the former Yugoslavstates);Modernity: GDP purchasingparity power in US dollars 1997.

30

THE ENLARGED EUROPEAN UNION

TABLE 2 CULTURAL HERITAGE. A CLASSIFICATION OF COUNTRIES BY DENOMINATION

Countries

PC %

Anglo-Americancountries USA 36 Australia 48 New Zealand 60

PC

25 26 14

WesternEuropeancountries Norway 82 1 Sweden 81 5 Finland 80 3 West Germany 39 33 Spain 1 82 Central Europeancountries EastGermany 18 CzechRepublic 2 Slovakia 10 Hungary 17 Slovenia 2 Croatia 0 Baltic countries Estonia Latvia Lithuania

10

19 2

5

39 73 55 69 82 0 18

77

0M %

%%

OM

61 74 74

0 0 112 0004

83 86 83

1124 14 2 021 011 0001

72

83 23 40 83 72 71

82 10

37 79

S

T

CL

18 3

80 79 78

P P P

89 92 86 74 84

P P P P

C

24 43 86 75 75 85

C C C C C

%%%%

0001 0003 000 2 021 2 I 1111

16

0 18 0 4042

1

51 1

3 31

16 18

T

2 5

28 60 85

C

T P

South-EasternEuropeancountries(mainly Orthodox) Yugoslavia 1 64 67 Romania 256 87 Bulgaria 11 52 2

8 0 12

72

87 64

2 3 1

81 96 67

0 0 0

South-EasternEuropeancountries(mixed-Muslim) Macedonia 11 45 0 Bosnia-Herzegovina 2 14 26 16 Albania 066 20

27 67

24

69 53 87

0 1 0

70 70 93

0 M M

5 0 0 0

53 56 54 83

1 1 0 1

54 63 62 84

0 0 0 0

EasternEuropeancountries Russia 000 Ukraine 066 Belarus 088 Moldova 000

48 56 54 83

Notes: P = Protestant;C = Catholic; PC = sum of Protestant+ Catholic; 0 = Orthodox; M = Muslim; OM = sum of Orthodox + Muslim; S = Sects;T = proportion of respondents mentioninga denominationalaffiliation; CL = generaliseddenominationalclassification. Cell entriesare datageneratedby the World ValuesSurvey 1995-99.

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

31

religions in each country as a percentage.In the last column (CL) the country is classified in terms of modal denomination.The columns PC (Protestantand Catholic) and OM (Orthodox and Muslim) demonstratethe dominantdividing line postulatedby Huntington. Countrieshavebeenassignedto one of sevengroupson the basisof the four dimensions(seeTables1 and 2). Although our study is concernedwith Europeancountries,the United States,AustraliaandNew Zealandhavealso beentaken into account.According to Huntington, thesecountriesform an independentculture complex within Western-Christiancivilisation that differs systemically from Europe. This difference has recently been empirically established also at the level of political attitudes and behaviour.27 Including this group of countries provides a contrasting backdrop to the particularity of Europeannations. Moreover, they most clearly representone of the types of democraticcommunity that we have identified (libertariancommunity). We havechosento label the groupsof countriesby geographicalregion. Suchregionsare relatively neutralconcepts,while being, in a certainsense, effective factors in generatingcommon characteristics.Spatial proximity betweencountriesand peoplesfacilitates communicationand increasesthe probability of similar historicalexperience.All four dimensionsrelateto the formation and stability of democracieson the one hand, and to the developmentof democratic and liberal attitudes and behaviour on the other.28 Since we cannotmake any preciseassumptionsabout the relative weight of individual dimensionsand relations betweenthe various scale points, only limited a priori assumptionsare possibleon the basis of this classification. We begin with the 'democratic community', which is characterisedby acceptanceof the fundamentalvaluesof every democracy. In this regard, the situational factor of the collapse of the communist systemsis likely to have an effect. We thereforeexpecta democracyto be supportedby a majority in every country. The factors we have used in classifying countries would therefore have to take effect in relative differences between countries and groups of countries. If the major historical dividing lines postulatedby Huntington, separatingthe WesternChristian peoplesfrom the Muslim and Orthodox peoples,is indeed the decisive borderline, the Anglo-American, Western European, Central Europeanand Baltic countrieswould be more democraticthan the SouthEasternand EasternEuropeanlands. If all four dimensions- not only 'religion' but also 'empire', 'Leninist regime' and 'modernity' - are taken into account, expectations are somewhatmore differentiated. On the basis of thesedimensions,we can

32

THE ENLARGED EUROPEAN UNION

posit the following ordinal sequencein the extent to which a democratic communityexists: (1) the Anglo-AmericanandWesternEuropeancountries (perhapsSpain and Finland might be somewhatmarginal); (2) the Central European countries; (3) the Baltic countries; (4) the South-Eastern European countries (with the exception of Albania); (5) the Eastern European countries (including Albania). In all the following tables of empirical results,the groupsof countriesare listed in this presumedorder. If one wishesto provide an empirically testablesimplification, the extentto which a democratic community exists in individual countries can be assumedto vary along a geographicalnorthwest-southeast axis. Two central criteria were applied in differentiating betweentypes of democraticcommunity (seeFigure 2 above).First, whom the citizens feel shouldbearprimary responsibilityfor a person'sfate (the individual himself or the state),and, second,how relationsbetweenfellow citizensoughtto be (competitive or solidary). The two criteria can also be understoodas a specificationof the more generalindividualism-collectivismdimension.In formulating our expectationswe drew on a study by Lipset.29 He postulates a substantial difference between American and European cultures, an 'American exceptionalism'.In this context he is concernedonly with WesternEurope.The distinction Lipset makesresemblesthat proposedby Huntington30 between North American and Western Europeancultures. However,Lipset focuseson different aspects.In his view, the exceptionality of American culture has been primarily determinedby the ethos of the Protestantsectsthat immigratedfrom Britain. Centralto the Americanethos is a markedindividualism with a strong ethic of self-responsibilityand an anti-etatist attitude. This has produced a society with a weak central governmentand a strongmarket.Another two featuresthat characterisethe Americanethosalso tracebackto the traditionsof the Protestantsects.31 On the one hand, this is a pronouncedwork ethic that derivesultimately from the idea of 'predestination'.On the other hand,it is an ethic moralismwith respectto questionsof good life and true action. Lipset contrasts the American ethos with the etatist and solidarity attitudes among Europeans,which have led to the formation of welfare states.Of the factorsgiven in Tables1 and 2 that shapethe political attitudes and behavioursof the citizenry, Lipset thus cites British origins and the tradition of the British Empire, and the religion of the Protestantsects. However, since the ethic of the Protestantsects and the structure of the political and economic systemsgroundedon it are consideredthe most importantcausesfor the extraordinarilysuccessfulmodernisationprocessin the United States,the modernityfactor also comesinto play. On the basisof

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

33

Lipset's study we can formulate a numberof expectationsaboutthe type of democraticcommunityin the countriesunderstudy. Lipset takesno accountof CentralandEasternEuropeancountries.If we assumethat autocratic regimes - like those of the Ottoman and Russian Empires and the Soviet imperium - foster etatist orientationsand weaken individualist attitudes,we can on this basisformulateexpectationsaboutthe type of democraticcommunityto includethe countriesof CentralandEastern Europe.We restrict ourselvesto the two criteria underlying the typology in Figure 2, on the assumptionthat, at a more generallevel, both are basedon the individualism-collectivism(or etatism)dimension.On this dimensionat least three types of democraticcommunity can be placed. The libertarian communityis closestto the individualist pole, the socialistcommunityto the collectivism pole, with the liberal community betweenthe two. If we apply thesecriteria, the Anglo-American countries can be assumedto exhibit a tendencytowards the libertarian community, Western Europeancountries towards the liberal community, and the countries of Central and Eastern Europe towards the socialist community. The latter is likely to apply most strongly for the Slavic successorcountriesto the SovietUnion. DemocraticCommunity

Two questionsare to be settledin the first step of the empirical analysis. First, the extent to which the societalcommunitiesin the countriesunder study are democratic, and, second, how marked the similarities or differences between these countries are. The analysis is guided by the expectationsformulatedin the previoussection. The criteria for a democratic community have been laid down as operational definitions (see Figure 1). With the exception of 'mutual recognition as free and politically equal citizens', indicators of all the attributes of a democraticcommunity are containedin the World Values Survey 1995-99.The distributionsof attitudesand behaviouraldispositions measuredby theseindicatorsare shownin Table 3. The empirical findings displayedin Table 3 are not interpretedin any detail.32 They serveprimarily as backgroundinformation for the following systematiccomparison,to which we can refer as needed.Before we tackle this comparison,a few remarkson methodsare appropriate. The countries under study are describedand localised by aggregating individual characteristicsof citizens. The advantagesand disadvantagesof this strategyare well known, andthey havebeencomprehensivelydiscussed. Our approachdiffers from mostin that we makea priori assumptionsthat are theoreticallyjustified. On the onehandwe definethe democraticcommunity

34

THE ENLARGED EUROPEAN UNION

TABLE 3 EMPIRICAL EVIDENCE OF CITIZEN SUPPORTOF A SET OF CRITERIA FOR A DEMOCRATIC COMMUNITY

Countries

Culture DEMa AUTI %%%%%%

Anglo-Americancountries USA 88 Australia 83 New Zealand 88 WesternEuropeancountries Norway 93 Sweden 93 Finland 75 West Germany 93 Spain 92

Structure PSC CGI

VIO

Process LAW

83 85 87

98 97 95

5 6 3

35 30 14

27 23

3 5

67 27 34

60

31

39 23 20 25

91 88 91 85 76

97 93 94 88 97

12 18 30 30 24 38

85 80 73 80 70 87

90 86 82 89 85 74

83 83 83 76

91

10

1 8

40

11

Central Europeancountries 91 EastGermany CzechRepublic 88 Slovakia 88 Hungary 83 Slovenia 82 Croatia 95

13

38 33 36 32 28 45

Baltic countries Estonia Latvia Lithuania

6 8 15

30 36 24 29

19 23

South-EasternEuropeancountries(mainly Orthodox) Yugoslavia 24 29 88 10 22 11 Romania 89 19 Bulgaria 80 36

16 43

South-EasternEuropeancountries(mixed-Muslim) 21 Macedonia 73 15 Bosnia-Herzegovina 87 26 32 Albania 43 98 65

16 57 35

79 72

93

89 97 92

EasternEuropeancountries Russia 51 Ukraine 75 Belarus 75 Moldova 71

16 29 26 33

82 78 83 66

85 81 80 82

85 79 87

2 4 4 5 6

20 17 17

16 14

7

13

12

74 77

79

90

92 94 96

Notes: DEM: Support of democraticrule; AUT: Support of autocratic rule; PSC: Support of political system of one's own country; CGI: Confidence in governmentalinstitutions; VIO: Illegitimacy of violence; LAW: Law abidingness.Cell entries are percentpositive support. a) The addition of both percentagescan exceed100. There are respondentswho equally supportdemocraticand autocraticrules.

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

35

in generaland the types of democraticcommunityon the basisof a number of specific characteristics.On the otherhand,we determinewhich countries best representthe democratic community and its types. These are the benchmarkcountriesof our analysis.We assumethat all respondentscan be describedand relatedto the benchmarkcountriesthrough a combinationof the properties constitutive to the respective community. By using discriminant analysisas a statistical techniquewe are able to answertwo questions.First, how importantthe specific characteristics(indicators)arein predicting the membershipof a respondentin the predefinedgroup on the one hand and in the undefined group on the other. Second, for every respondentfrom the undefinedgroup, the probability of his belongingto the definedor known group canbe determined. The tables show several figures useful in assessingresults. First, correlationsof the variableswith the discriminantfunction: the higher the correlation, the more important is the variable or the indicator for discriminatingbetweencitizensin the known group and thosein the group of other countries. Second,eigenvaluesand canonicalcorrelations: both high eigenvaluesand high canonicalcorrelationsmeanthat the two groups are well separatedby the given set of variables.Third, group centroidsare reported.Thesefigures are simply averagescoresfor respondentsbelonging to eachof the predefinedgroups.Fourth, we show simplified classification results. Each respondentis allocatedto a group accordingto his greatest probability - given the set of variables for the prediction. The share of correctly classifiedrespondentsis an indicator of the goodnessof fit. Discriminantanalysisallows us to assigna probability of belongingto a group that is defined a priori to representa certain theoretical category. Although the initial scoreis allocatedto the individual respondent,we use this variable in our analysismainly to describenation statesby averaging the respectiveinformation. The standard against which we determine the extent to which the societal community in specific countries is democratic is a group of countries that undoubtedly representsuch a community. The countries concernedare, first, the United Statesand Australia, and, second,Sweden and West Germany.Theseare the benchmarkdemocraciesfor the discriminant analysis. Table 4 shows how strongly the eight attributes of a democratic community distinguish betweenthe benchmarkdemocracies and the other countries.With one exception- 'confidencein governmental institutions'- all correlationsof the variableswith the discriminantfunction are statistically significant. The highest correlations are in 'support for autocracy'(-.799) at the cultural level and 'law-abidingness'(.583) at the

36

THE ENLARGED EUROPEAN UNION TABLE 4 DIFFERENTIATION BETWEEN BENCHMARK DEMOCRACIES AND OTHER COUNTRIES

a Democracies rb Cultural level Supportof democracy Supportof autocracy

.446 -.799

Structural level Supportfor currentpolitical system Confidencein gov't institutions

.252 .048c

Processlevel Illegitimacy of violence Law abidingness Eigenvalue Canonicalcorrelation

.264 .583 .059 .236

Group centroids Groupsto classify Democracies

-.121 .486

Classificationresults

I Group to classify 2 Democracies Correctly classified

I .58 .32

Group

2 .42 .68

60

Notes: a) Benchmarkcountries:USA, Australia, Swedenand West Germany b) Pooledwithin-group correlationsbetweendiscriminatingvariablesand canonical discriminantfunction. c) Not significant at the .001 level.

processlevel. 60 per cent of respondentswere correctly classified on the basisof this weightedcombinationof characteristics. However, our analysis is concerned with the categorisation and comparisonof countriesand groupsof countries.For this purposewe have aggregatedthe results obtainedat the individual level. Table 5 shows the meanof probability for respondentsin a country to belong to the group of benchmarkdemocraciesas definedby the characteristicsstatedin Table 4. Countriesareclassifiedin termsof the geographicalgroupsexplainedin the theoreticalsection.The nameof eachgeographicalgroup is given in italics over the countries,and the meanand standarddeviationsfor thesegroups are also stated.The expectationformulatedin the theoreticalsectionrelative to the geographical country groups postulates the following ordinal sequencein degreesof democraticcommunity:(1) the Anglo-Americanand Western Europeancountries; (2) the Central Europeancountries; (3) the

37

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE TABLE 5 CLOSENESSOF COUNTRIES TO THE BENCHMARK DEMOCRACIES

Na

Countries

Meana

Anglo-Americancountries USAb Australiab New Zealand

.552 .562 .538 .565

(.118) (.12) (.12) (.11)

3,749 1,235 1,726 788

WesternEuropeancountries Norway Swedenb Finland West Germanyb Spain

.536 .579 .530 .493 .551 .511

(.123) (.11) (.12) (.13) (.11) (.12)

4,494 1,077 862 796 896 863

Central Europeancountries EastGermany CzechRepublic Slovakia Hungary Slovenia Croatia

.497 .539 .512 .482 .512 .486 .460

(.135) (.12) (.13) (.13) (.13) (.14) (.14)

4,980 888 935 868 494 807 988

Baltic countries Estonia Latvia Lithuania

.436 .477 .418 .403

(.131) (.13) (.12) (.12)

2,168 782 894 492

South-EasternEuropeancountries(mainly Orthodox) Yugoslavia Romania Bulgaria

.468 .494 .453 .444

(.135) (.13) (.14) (.12)

2,382 1,013 804 565

South-EasternEuropeancountries(mixed-Muslim) Macedonia Bosnia-Herzegovina Albania

.405 .429 .436 .322

(.133) (.12) (.13) (.10)

2,091 589 966 536

EasternEuropeancountries Russia Ukraine Belarus Moldova Total Eta2

.374 .362 .380 .382 .373 .477 .228

(.127) (.13) (.13) (.12) (.13) (.12)

3,796 1,011 1,008 1,054 723 23,660

Sda

Notes: a) Mean = Mean membershipprobability of respondentsbelongingto the group of benchmarkdemocracies,defined by the set of eight characteristicsof democratic community; Sd = Standarddeviation; N = Numberof cases b) Benchmarkdemocracies.

38

THE ENLARGED EUROPEAN UNION

FIGURE 4 LOCATION OF COUNTRIES IN A TWO-DIMENSIONAL SPACE OF DEMOCRATIC COMMUNITY 90 85 80

• ROM

:§: 75

~ 70

j

• USA • AUS • NZL

• NOR

• FIN =0.12

.MKD

Ii, .5 65

~

• ESP

.BIH

• BGR

.WGE

• SVN. HUN. CZE

60

• RUS

55

• SVK

.LVA

• UKR';:L~DA

50 45

• ALB

40 10

20

30

40

50

60

70

80

90

Solid democrats(b)

Notes: (a) Percentageof people with high degreeof law abidingness;(b) Percentageof peoplewho support democraticrule and at the sametime reject autocraticrule.

Baltic countries;(4) the South-EasternEuropeancountries;(5) the Eastern Europeancountries. This assumptionis essentially confirmed by empirical findings. The deviantgroup is the Baltic countries,which rank after the OrthodoxSouthEastern European countries. However, the results for individual Baltic countriesdiffer greatly. Whilst the mean for Estoniacorrespondsmore or lessto that for SloveniaandCroatiain CentralEurope,Latvia andLithuania trail behind the South-EasternEuropean Muslim countries. Estonia's distinctivenesscan be attributed to the country's greater modernity in comparisonwith the other two Baltic nations (seeTable 1) and to the high proportion of the population- in comparisonwith all the countriesunder study - with no religious ties (seeTable 2). By far the greatestmisclassificationof a countryin a geographicalgroup is Albania. Of all countries,Albania shows the lowest mean and thus the greatest distance to the benchmark democracies.The result cannot be explainedwith referenceto the country classificationcriteria. Possiblythe regimeof EnverHodschaplays a role, certainly one of the most totalitarian amongcomparableregimesin Europe. As we expected,the Slavic successorcountriesto the Soviet Union, here termedEasternEuropeancountries,show by far the lowestmeanscoreof all regional groups (seeTable 5). They thus correspondleastto the benchmark democracies.However, a majority of citizens in Moldova, Belarus and Ukraine also clearly favours democracy,while only a minority is in favour

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

39

of autocracy (see Table 3). Relative distance from the benchmark democraciesthus doesnot necessarilymeanthat the citizens of the country concerneddo not form a democraticcommunity.The relatively leastsupport for democracy(51 per cent) and a relatively high supportfor autocracy(20 per cent) amongEasternEuropeancountriesis to be found in Russia.Of all the countriesunderstudy,Russia,togetherwith Albania, hasthe lowestmean score.Thesetwo countriesare accordinglythe leastdemocraticas far as the attitudesand behavioursof their citizensare concerned. Among the Anglo-American and Western European countries, two deviate relatively strongly from the others: Spain and, above all, Finland (seeTable 5). In the caseof Spain this is attributablemainly to the below averagerejection of violence as a political instrument,and in the caseof Finland to the below averagesupport for democracy(see Table 3). The explanationex postfactum may be the tradition of violent confrontationin Spain and the geographicalproximity and former dominanceof Finland to Russiaand the SovietUnion. Finlandis the only countryin WesternEurope that belongedto an autocraticempire (Russia)for a longer period. These two deviantcasesalso explain most of the differencein the meanbetween the Anglo-Americancountriesand the countriesof WesternEurope. For the further analysis of the democratic community we made two simplifications in comparison with the discriminant analysis. First, we restricted ourselvesto the three characteristics:'support of democracy', 'supportof autocracy'and 'law-abidingness'.We thus leaveout attitudesto the political systemin the respondents'own country, the theoreticalstatus of which is not fully clear (see section 2). The three attributestaken into account,are, however,also thosethat most clearly distinguishthe group of benchmarkdemocraciesfrom the group of other countries (see Table 4). Second,we make no a priori assumptionin the form of a referencegroup (benchmarkdemocracies).We localise the countriesin a two-dimensional space(see Figure 4). The one dimensionis the proportion of respondents that clearly support democracywhile rejecting autocracy.These respondents are termed 'solid democrats'.33 The second dimension is the proportionof respondentsthat exhibit differing degreesof law-abidingness. The countries are relatively widely scatteredin the two-dimensional space.Although there is a significant linear relationshipbetweenthe two dimensions,it is not very marked(R2 = .12). Nevertheless,certainpatterns can be identified that correspondto the resultsof the discriminantanalysis. Countrieswith a pronounceddemocraticcommunity are locatedin the top right-hand area of the space, the Anglo-American countries and some WesternEuropeancountries.Of the WesternEuropeancountries, Finland,

40

THE ENLARGED EUROPEAN UNION

Spain and West Germanydeviate most. Finland and Spain exhibit above averagelaw-abidingnessandan only averageproportionof solid democrats. With West Germanyexactly the oppositeapplies. The left-hand bottom part of the spaceis occupiedby countrieswhose societalcommunitycan be describedas leastdemocratic.Here we find the samecountriesthat scoredlowest in the discriminantanalysis:the Eastern Europeancountries and Albania. Combining support for democracyand rejection of democracyproducesan even more marked result. In all five countries(Russia,Ukraine, Belarus,Moldova, Albania) solid democratsare a minority of less than 25 per cent. At the sametime, the level of lawabidingnessis below average. The Central European countries (Czech Republic, Slovakiaand Hungary), althoughspatially somewhatapart from the North American and WesternEuropeancountries,are still much closer to them than to the EasternEuropeancountriesand Albania. This finding, too, conformsto the discriminantanalysis. Typesof DemocraticCommunity

A democratic community is characterisedby its members exhibiting attitudesand behavioursthat meetthe minimum demandsof a democracy. However, a democracycan be differently realisedand structured.Citizens canhavediffering normativeideasaboutthis. On the basisof the democracy theory discussion, we have distinguished four normative models of democracyandthe correspondingfour typesof democraticcommunity(see Figure 2). Having in the preceding section empirically analysed the similaritiesanddifferencesbetweencountrieswith regardto the democratic community, we proceedin this section to do the same for the types of democraticcommunity. In Figure 3 the four types of democraticcommunity are describedin terms of characteristicsthat are theoretically relevant and for which indicators are available in the World Values Survey 1995-99. The distributionsof the specific attitudesand behavioursare shownin Table 6. The distributionsare not dealt with in detail; insteadwe tum directly to the comparisonbetweencountries. In this comparisonwe proceedas with the democraticcommunity. The statisticalmethodusedis discriminantanalysis,and we define benchmark countriesas the point of referencefor classifying individual countries.As explained in the theoretical section 2, our definition of benchmark democraciesdraws primarily on the study by Lipset and a follow-up empirical analysis.34 According to thesestudies,the United Statesis to be considereda libertariandemocracywith republicanelements.For the sake

41

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

of simplicity, we take recoursein Table 7 and the following tables and figures only to the characterisationas libertarian democracy.Australia has structuralpropertiessimilar to thoseof the United States(seeTables 1 and 2) and exhibits similar political attitudesand behaviours.In our analysis, Australia - in addition to the United States - therefore representsthe TABLE 6a CITIZEN SUPPORTOF DIFFERENT TYPES OF DEMOCRATIC COMMUNITY AT CULTURAL LEVEL

Countries SRE SOL %%%%%

Culture TRU

WET

ETO

Anglo-Americancountries USA Australia New Zealand

66 47 45

21 29 34

35 40 47

68 61 61

9 18 21

WesternEuropeancountries Norway Sweden Finland West Germany Spain

37 67 42 41 24

19 49 41 75 67

65 57 48 40 29

42 49 57 25 55

22 40 20 45 23

Central Europeancountries EastGermany Poland CzechRepublic Slovak Republic Hungary Slovenia Croatia

19 36 23 14 12 24

24 17 27 26 22 15 23

33 32 43 45 43 58 54

35 5 30 17

11

86 61 51 52 82 53 62

Baltic countries Estonia Latvia Lithuania

16 17 24

56 66 74

21 24 21

57 52 33

5 8 3

South-EasternEuropeancountries(mainly Orthodox) Yugoslavia 16 65 Romania 31 63 71 Bulgaria 22

29 18 24

45 63 52

4 6 14

South-EasternEuropeancountries(mixed-Muslim) Macedonia 16 74 Bosnia-Herzegovina 17 59 62 Albania 14

7 27 24

35 60 88

2 3 2

EasternEuropeancountries Russia Ukraine Belarus Moldova

23 29 23 22

48 43 52 54

3 3 4 3

16 14 17 14

79 76 70 75

13

20 22

Notes: SRE: Self-responsibility;SOL: Solidarity; TRU: Trust in others;WET: Work ethic; ETO: Ethic tolerance. Cell entriesare percentpositive support.

42

THE ENLARGED EUROPEAN UNION

TABLE 6b CITIZEN SUPPORTFOR DIFFERENT TYPES OF DEMOCRATIC COMMUNITY AT STRUCTURAL AND PROCESSLEVELS

Countries

PRO %

Structure

MAN %

PMO %

Process

CIV %

Anglo-Americancountries USA Australia New Zealand

74 62 52

55 51

52 45 41

52 45 35

WesternEuropeancountries Norway Sweden Finland West Germany Spain

46 48 59 61 34

34 36 35 30 37

43 41

25 24 12 25

37 31 38 23

29 15 42 21 24 22 34

47 27 27 28 24 14 24

16 0 7 6 9 8

40

37 38

26 25 25

3 5 2

South-EasternEuropeancountries(mainly Orthodox) Yugoslavia 42 25 Romania 55 37 40 Bulgaria 27

21 21 23

4 9 2

South-EasternEuropeancountries(mixed-Muslim) Macedonia 58 37 Bosnia-Herzegovina 49 25 48 Albania 78

21 37 19

8 20 7

EasternEuropeancountries Russia Ukraine Belarus Moldova

23 25 38 23

3

Central Europeancountries EastGermany Poland CzechRepublic Slovak Republic Hungary Slovenia Croatia Baltic countries Estonia Latvia Lithuania

40

49 75

33 36 47

14 32 25 20

64

16 23 20 23

17

55

17

13

13

1

1 5

Notes: PRO: Private ownership;MAN: Managementof enterprise;PMO: Political motivation; CIV: Civic engagement. Cell entriesare percentpositive support.

libertariantype of democracy,and the two countriesform the corresponding benchmarkgroup. In contrastto the individualism of the United States,WesternEuropean countries have a pronouncedetatist tradition. This was realised in the

43

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

development of welfare states, whose functions include ensuring the greatestpossibleequality of opportunity for individuals competingin the markets.Thesewelfare statescorrespondto the liberal model of democracy, and a societal community with the relevant attitudes and behavioursis thereforeto be termeda liberal community. The benchmarkcountrieswe have chosento representthis liberal type of community are Swedenand WestGermany.Both areindubitablywelfare states,but they havedeveloped different forms.35 By taking thesetwo countriesinto account,the relevant spectrumof WesternEuropeanwelfare statesand thus of WesternEuropean liberal democracieshasbeencovered. The correlationsof the indicatorsof the discriminantfunction in Table 7 show how strongly the individual characteristicsdistinguish betweenthe benchmarkcountries and the other countries. In the case of libertarian democracy, the highest correlations are for 'self-responsibility' and TABLE 7 DIFFERENTIATION BETWEEN BENCHMARK TYPES OF DEMOCRACIES AND OTHER COUNTRIES

Type of democracy Libertarian democracya Liberal democracyb ~

~

.464 .114 .178 .012

.513 .095 .333 -.226 .722

Structural level Privateownership Managementof enterprise(owners)

.354 .286

.182 -.035

Processlevel Political motivation Civic engagement Eigenvalue Canonicalcorrelation

.232 .786 .294 .476

.318 .291 .096 .296

Group centroids Group to classify Liberal democracies

-.193 1.522

-.075 1.274

Cultural level Self-responsibility Solidarity with the disadvantaged Trust in others Work ethic Ethic tolerance

-.504

Classification results

1 Group to classify 2 Liberal democracies Correctly classified

1 84 30

Group

82

2 16 70

1 76 23

Group

76

2 24 77

Notes: Benchmarkcountries:a) United Statesand Australia; b) Swedenand West Germany. c) Pooled within-group correlations between discriminating variables and canonical discriminantfunctions.

44

THE ENLARGED EUROPEAN UNION

'solidarity with the disadvantaged', as well as 'civic engagement'.The first two characteristicsare also those with which a libertarian democracycan most strongly be identified in accordancewith our theoreticalassumption (see Figures 2 and 3), and 'civic engagement'is typical of republican democracies(seeFigure 3). For liberal democracy,the highestcorrelations are for 'self-responsibility'and 'ethic tolerance'. Thesecharacteristics,too, areto be found in the descriptionof the liberal community in Figure 3. The proportion of correctly classifiedrespondents is much higher for thesetwo types of democraticcommunity than for the democraticcommunityin general.For 'libertariandemocracy'the figure is 82 per cent, and for 'liberal democracy'76 per cent. This indicatesthat the differencebetweenthe referencegroup and the group of other countriesis relatively large. We will be dealing with this in greaterdetail. The socialist community has not been included in the comparative analysis.The reasonis a simple one: there is no Westerncountry that can plausiblyrepresentthis type of community.Thereis alsono Westerncountry that representsthe republican community in a 'pure' form. However, the United States and Australia also exhibit some republican properties. Although the benchmark group composed by these two countries predominantlyrepresentsa libertariancommunity,it hasadditionalattributes. In contrast to the democratic community in general, there are considerabledifferences between countries with regard to the type of democraticcommunity. We will deal first with the libertarian community. Threegapsare identifiable betweengroupsof countries(seeTable 8). The first is betweenthe Anglo-Americanand the WesternEuropeancountries. For the first the meanis .656 and for the second.376. Since the Western Europeancountriesstill havethe highestmeanof the Europeangroups,the difference between Anglo-America and Europe posited by Lipset is impressivelyconfirmed.Within the Europeancountries,however,thereare still substantialdifferences. The next gap in mean ranking is between Western Europeancountries (.376) and Muslim South-EasternEuropean countries(.282). Right at the end of the scalecome the Baltic and Eastern Europeancountries.The meanfor both groups of countriesis lower than .200. The democraticcommunitiesin Europecan thus definitively not be consideredlibertarian but at least liberal (WesternEuropeancountries),if not even socialist. There are some striking deviations within groups of countries. Among WesternEuropeancountries Spain and among Central EuropeancountriesHungary have a markedly lower mean than the other countriesin their groups.And amongthe Muslim South-EasternEuropean countries,Bosnia-Herzegovina has by far the highestmean.This relatively

45

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE TABLE 8 CLOSENESSOF COUNTRIES TO LIBERAL AND LIBERTARIAN TYPES OF DEMOCRACY

Countries

Libertariandemocracya Meanc Sdc ~

Liberal democracyb Meanc Sdc NC

Anglo-American countries USA Australia New Zealand

.656 .752 .621 .580

(.30)

(.27) (.31) (.29)

3,122 1,016 1,528 578

.449 .426 .455 .473

(.26) (.26) (.27) (.25)

3,122 1,016 1,528 578

WesternEuropean countries Norway Sweden Finland West Germany Spain

.376 .470 .431 .334 .360 .251

(.28) (.28) (.28) (.26) (.29) (.25)

3,652 970 662 708 604 708

.524 .494 .682 .424 .657 .406

(.27) (.24) (.21) (.24) (.26) (.27)

3,652 970 662 708 604 708

.240

(.24) (.23) (.24) (.20) (.20) (.25) (.25)

4,317 687 794 834 467 731 804 2,227 761 844 622

.505 .413 .331 .340 .330 .360 .268 .247 .290 .262

380

(.25) (.28) (.23) (.22) (.23) (.24) (.24) (.19) (.18) (.19) (.19)

4,317 687 794 834 467 731 804 2,227 761 844 622

Central European countries EastGermany CzechRepublic Slovakia Hungary Slovenia Croatia Baltic countries Estonia Latvia Lithuania

.224 .263 .199 .184 .277 .274 .191 .200 .192 .179

(.20)

(.20) (.20) (.18)

South-EasternEuropean countries(mainly Orthodox) .225 Yugoslavia .180 Romania .305 Bulgaria .189

(.22) (.19) (.25) (.19)

2,380

1,073 819 488

.289 .252 .296 .358

(.22) (.20) (.22) (.23)

2,380

South-EasternEuropean countries .282 (mixed-Muslim) Macedonia .223 Bosnia-Herzegovina.321 Albania .287

(.26) (.22) (.29) (.29)

2,193 627 917 649

.254 .240 .267 .249

(.19) (.18) (.19) (.17)

2,193 627 917 649

EasternEuropean countries Russia Ukraine Belarus Moldova

.143 .136 .134 .146 .168

(.16) (.16) (.14) (.15) (.20)

4,719 1,294 1,381 1,255 789

.247 .251 .256 .264 .197

(.19) (.25) (.20) (.19) (.17)

4,719 1,294 1,381 1,255 789

Total Eta2

.297 .22

(.23)

22,610

.352 .09

(.22)

22,610

1,073 819 488

Notes: a) Libertarian democracy:benchmarkcountriesUSA and Australia. b) Liberal democracy:benchmarkcountriesSwedenand West Germany. c) Mean = Mean membershipprobability of respondentsbelongingto the group of benchmark democracies,definedby the set of nine characteristics;Sd = Standarddeviation; N = Number of cases.

46

THE ENLARGED EUROPEAN UNION

greaterproximity of Bosnia-Herzegovina to the benchmarkdemocraciesis, however, attributable less to the libertarian characteristicsof the two countriesthat constitutethe group than to the communitarianattribute of moral rigour (seeTable 6a). As the correlationsof the liberal communitycharacteristicswith the discriminant function show (see Table 7), 'self-responsibility' (.513) and especially 'ethic tolerance' (.722) distinguish most clearly between the benchmarkcountries and the others. By the first (self-responsibility), a liberal communitydistinguishesitself aboveall from a socialistcommunity. Thus, the results of the discriminant analysis do not inevitably fit the libertarian-liberal-socialistcontinuum.In the liberal community,too, there arevery cleardifferencesbetweengroupsof countries.Also in keepingwith theoretical expectations, Western European countries most strongly representthe liberal community (mean: .524). The Anglo-American and Central European countries follow after clear intervals, .449 and .380 respectively.The most striking differenceis apparentbetweenthe Central Europeancountries and the other groups. Among these other groups of countries, the Orthodox South-EasternEuropean countries have the relatively highest mean (.289) and the Eastern Europeancountries the relatively lowest (.247). As far as the liberal community is concerned,the major cultural dividing line suggestedby Huntingtondoesexist, separating the Western-Christiancivilisation (including Central Europe) from the Orthodox-Muslimcivilisation in EasternEurope. Sincecharacteristicsthat can relateto othertypeshavebeenincludedin the two discriminantanalyseson libertarianand liberal democracy,we omit characteristicsthat are theoreticallyquite unambiguousfrom the following considerations.In Figure 5, countries are localised in a two-dimensional space mapping the proportion of citizens with a strong sense of selfresponsibilityandthosewith a strongsenseof solidarity. The regressionline shown in the figure representsthe underlying libertarian-liberal-socialist continuum: strong self-responsibility and weak solidarity characterisea libertarian community, and, vice versa, a socialist community is characterisedby strong solidarity and weak self-responsibility, with the liberal communitylocatedbetweenthe two. The varianceof no lessthan45 per cent explained by the regressionshows that the assumptionof this underlying continuumis justified. If we take the 50 per cent thresholdin each case to ensure better orientation in the spatial classification of countries, the only country that simultaneously scores high on selfresponsibilityand low on solidarity is the United States.Accordingly, the United States is by far the most libertarian community, and 'American

47

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE FIGURE 5 LOCATION OF COUNTRIES ON THE LIBERTARIAN-LIBERAL-SOCIALIST DIMENSION .. 90

'2 ~

.EGE •

80

RUS ~~MKD

"0

" !!

70

-g>

60

OJ)

§

en

:a

-S ~

HUN U~ •

• ESP

+ ROM

.SVN

.SVK

50

.WGE

.LTU .BGR

.CZE

.SWE •

40

+NZL

.~

30

~

20

•

"0 CI:l

FIN

•

10 10

20

m

AUS

• USA

NOR

~

Self-responsibility(b)

~

60

70

"

Notes: a) Proportionof respondentswith high solidarity; b) Proportionof respondentswith high self-responsibility.

exceptionalism'36is clearly in evidence. Surprisingly, an above average proportionof Swedeshavea pronouncedsenseof self-responsibility,while evincing much greater solidarity than Americans. This high degree of Swedes'senseof self-responsibilitycan be ascribedto two aspects.First, the measurementof 'self-responsibility'relatesto the respectivecountry's statusquo. Second,Swedesplacea relatively strongemphasison the value of self-responsibilityideologically, thus justifying the welfare statein part with the ability for self-responsibility.37 In the upper left-hand part of the space,which is defined by strong solidarity and weak self-responsibility, thus delimiting a socialist community, we find all the countriesfrom Central and Eastern Europeplus Spain as the only WesternEuropeancountry. Within this cluster of countries,no further differentiationby geographicalregion is possible.For example, two of the countries we have assignedto Central Europe Hungaryand EastGermany- togetherwith the EasternEuropeancountries Russia,Ukraineand Moldova, form the outermostfringe of the cluster,thus representingthe relatively most socialist communities. In contrast, two Central Europeancountries- Sloveniaand the CzechRepublic - together with Romania are gatheredat the opposite fringe of the cluster in the direction of the Westerncountries.The countriesdeviating most from the

48

THE ENLARGED EUROPEAN UNION

regressionline are West Germanyand Norway. They are averageon selfresponsibility,but solidarity is below averagein Norway and aboveaverage in West Germany. The two dimensionsin Figure 6 relateto the constitutivecharacteristics of a republicanor civic community. A fundamental normativeconceptin this type of democratic community is that the individual and not governmentshould bear primary responsibilityfor the individual's affairs (see Figure 2). The sameis demandedby libertarians;but, in contrastto libertarians,republicansdo not assumethat collective goalscan be attained only indirectly through the mechanismsof the market. They stressactive co-operationbetweencitizensto realisecommonprojects.38 The resourceon which such co-operationcan draw is termed social capital. Social capital consists primarily in shared values and norms of reciprocity and cooperation. A consequenceof the mutual assumptionthat such values and normsapply, and of experiencewith relevantaction is trust or confidencein the othermembersof the community.Trust in othersis thereforefrequently used as an indicator of the social capital of a community. Co-operative values and norm orientations induce citizens to participate actively in voluntary associations,and this in its tum stabilises the social capital. Putnam therefore refers to civil or voluntary associationsas 'social FIGURE 6 LOCATION OF COUNTRIES IN A TWO-DIMENSIONAL SPACE OF REPUBLICAN COMMUNITY %

70 •

NOR

60 .SWE 50

3:

~

•

FIN

.NZL

.WGE

40

R' =0.344 •

AUS •

0

.s

~

USA

30 20 10

.MKD

0 0

10

20

30 Civic Engagement(b)

40

50

60 %

Notes: (a) Percentageof respondentswho trust in other people; (b) Percentageof respondents who are active membersin two or more voluntary associations.

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

49

structuresof co-operation'.In Figure 6, active participationby citizens in two or more voluntary associationsis termed'civic engagement'. The link between'civic engagement'and 'trust in others' that Putnam posits is controversial.As the regressionanalysis shows (R2 = .344), this assumptionis confIrmed by our data at least at the aggregatelevel of the countries under study. The classification of countries in the twodimensionalspaceof a republicancommunity revealsa markeddifference betweenAnglo-AmericanandWesternEuropeancountrieson the one hand and the countriesfrom Centraland EasternEuropeon the other. The latter show less trust in others and less civic engagement.The only Western Europeancountry in the group is Spain. Taking the analysisresultsof this sectionfor Centraland EasternEuropeas a whole, we fInd a positive and a negativeaspect:they relatively clearly representa socialistcommunityand just as clearly do not representa republicancommunity. Among the Anglo-Americanand WesternEuropeancountries,there is none that exhibits both strong confidence in others and strong civic engagement.Thus, we cannot identify a 'pure' case of a republican community. Two confIgurationsamong thesecountriesare evident. First, the two Nordic countries NorwayandSwedenwith an averagelevel of civic engagementand a high level of trust in others,and, second,the two AngloAmericancountriesAustraliaandthe United Stateswith an averagelevel of trust in othersand a high level of civic engagement. SUMMARY AND CONCLUSIONS

Developmenttowards a politically integrated and geographically more comprehensiveEuropeappearsto be irreversible.But the generaldynamic of developmentoffers fundamentaloptionsthat haveyet to be decided.One is the extent of political integration through Europeaninstitutions. The central issueis how strongly the competenceto make binding decisionsis to be transferredfrom the nation statesto the supranationalregime of the EU. Another is the matter of the easternborder, the question of which countriesshould belongto the EU. This is the point of referencefor our study. Besideseconomicaspects,the questionof the eastwardenlargement of the EU is of strategicimportancefor the formation of a Europeandemos. Every institutional arrangementof the EU needsto be legitimated,and the more strongly the decisionsof these institutions directly impact the life world of the citizen, the greateris the needfor legitimation. The addressee of this legitimation of a Europeanregime and European politics is a Europeandemos.For legitimation to be successful,a merely formal demos

50

THE ENLARGED EUROPEAN UNION

is presumablyinsufficient. Over and abovelegally defined membership,it should constitutea political community with a collective identity citizens can subjectivelyattributeto themselvesand with which they can identify. We proceedfrom two premises.First, that the collective identity of the Europeandemos is groundedin subjectively perceivedcommonality in political values and behaviours; second, that objectively demonstrable commonalityin both regardsprovidesthe potential for the formation of a collective identity. Against this background,we have attemptedto answer two questions.First, the extentto which political valuesand behavioursare sharedby the citizens of Europeancountries;second,the extent to which there are systematic differences between Western, Central and Eastern Europe,and wherepossiblecultural borderslie. The most importantresults of our analysiscan be summedup as follows. Regardlessof what institutional form the regime of the EU will ultimately take, it will be a democraticform of government.Moreover,one of the key criteria for a country to join the EU is that it has a stable democracy.However, a democracycan function and survive only if the demos as the ultimate sovereign also exhibits appropriate values and behaviours.In a first step, we have thereforeempirically determinedthe extent to which societal community in the countries understudy can be describedas democratic,and what differencesthere are betweencountries and groupsof countries. Differencesare apparentbetweengroups of countries,but - with one exception - they are not very pronounced.They can be mapped on a geographicalwest-eastaxis. The relatively most democraticcommunities are to be found in the Anglo-American and WesternEuropeancountries. The countriesin which the democraticcommunityis leastdevelopedarethe Muslim countries in South-EasternEurope and the Eastern European countries.Leaving asidethe Anglo-Americancountriesand regressingthe scores of individual countries for the democratic community on a geographicalwest-eastaxis, no less than 62 per cent of variancecan be explained.In certain measure,this result is in keeping with Huntington's theory. However,in contrastto Huntington'sassumptions,no thresholdcan be identified betweenWestandEast,only a continuousdeclinein the extent of a democraticcommunity. The exception mentioned above is concernedwith the countries of EasternEurope,and, in our parlance,this meansthe Slavic successorstates to the Soviet Union plus Moldova (Russia, Ukraine, Belarus, Moldova). Albania also belongsto the group. In all thesecountries,'law-abidingness' is clearly below average,and in every casethereare fewer than 25 per cent

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

51

'solid democrats'among the citizenry (see Figure 4). According to our criteria, thereis therefore,at leastcurrently, no solid democraticcommunity in these countries. Besides the longer term factors we have mentioned (religion, empire, Leninist regime and modernity), the party systemsare presumablyresponsiblefor this result. In all these countries, the party system is shaped by parties that support at least the introduction of autocratic elements into the existing governmental system, if not the imposition of autocratic systems as a whole.39 The democratic transformationof the party system,in addition to economicdevelopment,is thereforea structuralprerequisitethat could strengthenthe democraticcommunity in thesecountries. Whilst thereare relatively slight differencesbetweenthe countriesunder studyas regardsthe democraticcommunityin general,this is far from being the case with the types of community. This is particularly clear if one considers the libertarian-liberal-socialistdimension. According to our analysis,the United Statesis indubitably a libertariancommunity.The vast majority of Americancitizensconsiderthat not the statebut the individual is responsible for his own life; at the same time solidarity with the disadvantagedis very weak (seeFigure 5). All the countriesof Centraland EasternEurope offer a contrast to the United States.In these countries strong self-responsibilityis evincedby less than a third of citizens, and in most countriesby evenlessthan 20 per cent. A majority, however,exhibits strong solidarity with the disadvantaged.Thus, on the basis of these two characteristics,the countries of Central and Eastern Europe can be consideredsocialistcommunities. The two other Anglo-Americancountries(Australia and New Zealand),as well as the WesternEuropeancountriesscorebetweenthe United Statesand the Central and Eastern European countries on self-responsibility. On solidarity the figures are at a similarly low level as that of the United States, the only exception being West Germany. Overall, these countries can thereforebe classifiedas liberal communities,which are,however,closerto the libertarian United States than to the socialist Central and Eastern Europeancommunities. Following on from the studies by Putnam and Fukuyama,40we have operationalisedthe republican community by the two dimensions 'civic engagement'and 'trust in others'. The classification of countries in the spacedefined by these two dimensionsagain shows a clear West-East difference. Most republican are the Anglo-American countries, United States,Australia and New Zealand.Decidedly not republican,in contrast, are the countries of Central and EasternEurope. 'Civic engagement'is

52

THE ENLARGED EUROPEAN UNION

weak, 'trust in others'is weak. The strongetatistorientationamongcitizens in Central and EasternEuropeis thus complementedand accordingly still further stabilisedby a lack of civic societyelements. The questionof the eastwardenlargementof the EU can be discussed and answeredfrom a variety of standpoints.For example,economicor geopolitical considerationscan play a role. The perspectivetaken by our analysis is that of the implications of eastward enlargementfor the developmentof a Europeandemos. This, in tum, is the condition for a viable European democracy. The greater the differences are between countries, the lower is the potential for a Europeanidentity on which a Europeandemoscan be based. Our study identifies three substantial dividing lines. The first runs between America and Europe, as already posited by Lipset.41 For our purposes,however, this is of secondaryimportance.The seconddivides WesternEurope from Central and EasternEurope. The countriesin these two partsof Europerepresentdifferent types of democraticcommunity.At this political cultural level, Huntington'sthesis of a cultural dividing line within Europeis confirmedto a certainextent.42 Accordingto the theoretical premisesof our analysis, every eastwardenlargementposes integration problemsandincreasesthe difficulty of constitutinga Europeandemos.The West-Eastdifference we have describedis concernedwith differing types of democraticcommunity. Betweenthe countriesof Europe there is little difference in the political values and behavioursthat are essentialto a democracy.The potential for Europeansin Western,Central and Eastern Europe to consider each other as democrats, and to integrate this understandingin their collective identity is thus considerable. The Slavic successornations to the Soviet Union (Russia, Ukraine, Belarus and Moldova) together with Albania are the exception. They cannot,at least not yet, be considereddemocraticcommunities,and in all the analyseswe haveconducted,they offer a seriouscontrastto the Western Europeancountriesand, to someextent,also to the countriesin Centraland EasternEurope.This is the third dividing line we identify. Taking account only of political cultural points of view, the easternborderof the EU would have to be drawn before thesecountries.However, there is also reasonto believe that democratic institutions may be supportive in creating a democraticcommunity. NOTES We would like to thank SeymourMartin Lipset for his critical readingof the paperandhis helpful comments.For reasonsof space,an appendixincluding full detailsof the surveyitems and codes used in this analysis has not been included. These details are available on requestfrom the authors.

EASTERN ENLARGEMENT AND THE IDENTITY OF EUROPE

53

1. M. Rainer Lepsius, 'Die Europaische Union. Okonornisch-politischeIntegration und kulturelle Pluralitat', in Reinhold Viehoff and Rien T. Segers (eds.), Kultur, Identitiit, Europa. Uber die Schwierigkeitenund Maglichkeiteneiner Konstruktion (Frankfurt a. M.: Suhrkamp1999), pp.201-22. 2. Dieter Grimm, 'Does Europe Need a Constitution?', European Law Journal I (1995), pp.282-302;PeterGraf Kielmansegg,'Integrationund Demokratie',in MarkusJachtenfuchs and BeateKohler-Koch (eds.), Europiiische Integration (Opladen:Leske + Budrich 1996), pp.47-71;Fritz W. Scharpf, 'Demokratieproblemein der europaischenMehrebenenpolitik', in Wolfgang Merkel and AndreasBusch (eds.),Demokratiein Ost und West. Fur Klaus von Beyme(Frankfurt a. M.: Suhrkamp1999), pp.672-94. 3. Lepsius, 'Die EuropaischeUnion'. 4. Dieter Fuchs,Jiirgen Gerhardsand EdeltraudRoller, 'Wir und die anderen.Ethnozentrismus in den zwtilf Landernder europaischenGemeinschaft',Kainer Zeitschriftfor Soziologieund Sozialpsychologie45 (1993), pp.238-53. 5. SamuelP. Huntington, The Clash of Civilizations and the Remakingof World Order (New York: Simon & Schuster1996); SeymourMartin Lipset, 'Conditions for Democracy',in Hans-Dieter Klingemann and Friedheim Neidhardt (eds.), Zur ZukunJt der Demokratie (Berlin: edition sigma 2000); William M. Reisinger, 'ReassessingTheories of Transition away from Authoritarian Regimes: Regional Patterns among PostcommunistCountries' (Paperpresentedat the 1999 Annual Meeting of the Midwest Political ScienceAssociation, Chicago, 15-17 April 1999). 6. Jiirgen Gerhards,'Westeuropaische Integrationund die Schwierigkeitender Entstehungeiner europaischenOffentlichkeit', ZeitschriftforSoziologie22 (1993), pp.96--110. 7. Dieter Fuchs,'The DemocraticCulture of Germany', in PippaNorris (ed.), Critical Citizens. Global Support for Democratic Government(Oxford: Oxford University Press 1999), pp.123-45; and Dieter Fuchs, 'Die demokratischeGemeinschaftin den USA und in Deutschland',in Jiirgen Gerhards(ed.), Die Vermessungkultureller Unterschiede.USA und Deutschlandim Vergleich (Opladen:Westdeutscher Verlag 2000), pp.33-72. 8. ChristopherJ. Berry, The Idea of a DemocraticCommunity(New York: St. Martin's Press 1989); JohnW. Chapmanand Ian Shapiro(eds.),DemocraticCommunity.NomosNo. XXXV (New York: New York University Press1993). 9. Dieter Fuchs and Edeltraud Roller, 'Cultural Conditions of Transition to Liberal Democraciesin Central and EasternEurope',in SamuelH. Barnesand JanosSimon (eds.), The PostcommunistCitizen (Budapest:ErasmusFoundationand Hungarian Academy of Sciences1998), pp.35-77;Dieter Fuchs, 'SozialeIntegrationund politische Institutionenin modernenGesellschaften',in Jiirgen Friedrichs and Wolfgang Jagodzinski(eds.), Soziale Integration. SonderheJt39 der KOiner Zeitschrift for Soziologie und Sozialpsychologie (Opladen:WestdeutscherVerlag 1999), pp.127-78;Dieter Fuchs, 'The DemocraticCulture of Germany'. . 10. Giovanni Sartori, The TheoryofDemocracyRevisited(Chatham,NJ: ChathamHouse1987); Mogens H. Hansen, The Athenian Democracy in the Age of Demosthenes.Structure, Principles and Ideology (Oxford: Blackwell 1991). 11. Dieter Fuchs, 'The DemocraticCulture of Germany'. 12. Hans-DieterK1ingemann,'Mapping Political Supportin the 1990s: A Global Analysis', in Pippa Norris (ed.), Critical Citizens: Global Support for Democratic Government (OxfordlNew York: Oxford University Press1999), pp.31-56. 13. Including Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books 1974); Benjamin R. Barber, Strong Democracy.Participatory Politics For a New Age (Berkeley: University of California Press 1984); Arnitai Etzioni, The Spirit of Community: The Reinventionof American Society(New York: Touchstone,Simon & Schuster1993); John Rawls, Political Liberalism (New York: ColumbiaUniversity Press1993). 14. Chapmanand Shapiro(eds.),DemocraticCommunity. 15. Rawls, Political Liberalism. 16. Robert C. Post, 'BetweenDemocracyand Community: The Legal Constitution of Social Form', in Chapmanand Shapiro(eds.),DemocraticCommunity,pp.163-90.

54

THE ENLARGED EUROPEAN UNION

17. Amitai Etzioni, The New Golden Rule. Communityand Morality in a DemocraticSociety (New York: Basic Books 1996). 18. RobertD. Putnam,with RobertLeonardiand RaffaellaY. Nanetti,Making DemocracyWork: Civic Traditions in ModemItaly (princeton,NJ: PrincetonUniversity Press1993). 19. Ibid., p.88. 20. Huntington,The Clash of Civilizations. 21. Putnam,Making DemocracyWork; Huntington,The ClashofCivilizations; RonaldInglehart, 'Clash of Civilizations of Global Cultural Modernization?Empirical Evidence from 61 Societies' (Paper presented at the 1998 meeting of the International Sociological Association,Montreal, 27-31 Aug. 1998). 22. Huntington, The Clash of Civilizations. 23. Lipset, 'Conditions for Democracy';Reisinger, 'Reassessing Theoriesof Transition away from AuthoritarianRegimes'. 24. Fuchs, The Democratic Culture of Germany; Robert Rohrschneider,Learning Democracy. Democratic and Economic Values in Unified Germany(Oxford: Oxford University Press 1999). 25. Reisinger,'Reassessing Theoriesof Transitionaway from AuthoritarianRegimes'. 26. SeymourMartin Lipset, 'SomeSocialRequisitesof Democracy',AmericanPolitical Science Review 53 (1959), pp.69-105,and his 'The Social Requisitesof DemocracyRevisited', AmericanSociologicalReview59 (1994), pp.l-22, and his 'Conditionsfor Democracy'. 27. Dieter Fuchs and Hans-DieterKlingemann, 'A Comparisonof DemocraticCommunities: American Exceptionalismand EuropeanEtatism' (Paperpresentedat the Conference'Rethinking Democracyin the New Millennium' at the University of Houston, 17-20 Feb. 2000). 28. Huntington,The Clash of Civilizations; Reisinger,'Reassessing Theoriesof Transitionaway from Authoritarian Regimes';Lipset, 'Conditions for Democracy'.Our codeshere are as follows: Religion: I Muslim or Orthodox, 2 Catholic, 3 Protestantor secular; Empire: I Ottoman or Russian,2 Hapsburg,3 British or none; Leninist regime: I yes (duration in years),2 no; Modernity: continuous(the higher the scorethe more favourableto democracy and vice versa). 29. Seymour Martin Lipset, American Exceptionalism.A Double-EdgedSword (New York: w.w. Norton 1996). 30. Huntington,The Clash of Civilizations. 31. Lipset, AmericanExceptionalism. 32. Details of the indicatorsand indices are availablefrom the authors. 33. Klingemann,'Mapping Political Support'. 34. SeeLipset, AmericanExceptionalism,and then Fuchsand Klingemann, 'A Comparisonof DemocraticCommunities'. 35. EdeltraudRoller, 'EndedessozialstaatlichenKonsenses? Zum Aufbrechentraditionellerund zur EntstehungneuerKonfliktstrukturenin Deutschland',in OskarNiedermayerand Bettina Westle (eds.), Demokratie und Partizipation (Opladen: WestdeutscherVerlag 2000), pp.88-1l4. 36. Lipset, AmericanExceptionalism. 37. Bo Rothstein, Just Institutions Matter. The Moral and Political Logic of the Universal Welfare State(Cambridge:CambridgeUniversity Press1998). 38. Putnam,Making DemocracyWork; FrancisFukuyama,The GreatDisruption. HumanNature and the Reconstitutionof Social Order (New York: Free Press1999). 39. Hans-DieterKlingemann,'NegativeParteiorientierungund repriisentativeDemokratie.Eine vergleichendeAnalyse', in Oskar Niedermayerand Bettina Westle (eds.),Demokratieund Partizipation, Festschrift fUr Max Kaase (Opladen: WestdeutscherVerlag 2000), pp.281-312;Hans-DieterKlingemann and Richard I. Hofferbert, 'The Capacity of New Party Systemsto ChannelDiscontent',in Hans-DieterKlingemannandFriedheimNeidhardt (eds.),Zur ZukunJtder Demokratie(Berlin: edition sigma2000), pp.41l-37. 40. Putnam,Making DemocracyWork; Fukuyama,The Great Disruption. 41. Lipset, AmericanExceptionalism. 42. Huntington, The Clash of Civilizations.

Culture and National Identity: 'The East' and European Integration DAVID D. LAITIN

As political andeconomicforcesaredriving the former communiststatesof EasternEuropeinto the web of the EuropeanUnion, severalquestionsarise as to the cultural challengesthat might ensue. Do East and West have different cultural sensibilities that will act as a roadblock to further integration?More particularly,do the Easternapplicantstateshavepolitical culturesthat encouragepeopleto think aboutthe relationshipof religion to the individual, the relationship of nation to the state, or the relationship between minorities (ethnic, religious, racial or those based on sexual orientation)in ways incompatiblewith the political culturesof EU member states?More generally,have the separatepaths of west and eastover the course of history forged a cultural divide, foreshadowingextraordinary difficulties in political and economiccooperationin the future? A 'great schism' that divides the 'Euro-Atlantic Community' from the 'Euro-AsianCommunity' and tracedback to the separationof Christianity into its Romanand Byzantineversionsis commonlycited as a barrierto the real possibilitiesof the integrationof the EasternEuropeanstatesinto the EU. It is hypothesisedthat asymmetriesbetweenEastand Westin regardto modernisationhavedeepened the schism,and,furthermore,sincethe endof World War II in the Westernpart of Europehistorical valuesand traditionscreating the baseof the cultural and moral identity of the continenthavebeen strengthened.In the Easternregions of the continent, however, the strengtheningof thesevalueswas hinderedby the so-called socialist ideology, originating in the Westernpart of Europe, but in practice being connected with the Euro-Asian cultural sphere and being representedby the presenceand practiceof Soviet power.1 Basedon an examinationof cross-countrydata transcendingWest and East in various cultural realms - language,religion and popular culture -

56

THE ENLARGED EUROPEAN UNION

this studyprovidessomepreliminaryanswersto the questionsposedabove.2 The data show first that there exists a pan-Europeancosmopolitanculture that is rapidly infusing the applicant countries of the East. Second, the transcendentcosmopolitanEuropeanculture exists complementarywith nationalcultures,which remainvibrant in the West and in the East, evenin the contextof an overarchingcontinentalculture. Third, the divergencesof national cultures within the memberstatesof the EU are considerable;yet on the cultural dimensions examined here, the national cultures of the applicantstatesfall well within the extremesset by the memberstates.In fact, the data presenta stunning result, which of coursemust be taken as preliminary and still at the level of speCUlation:that the cultural patterns exhibited by respondentsfrom the applicantstatesare somewhatcloser to the patternsshownamongthe original six EEC membersthan is the casefor the post-six entrants.To the degreethat there is a 'catchingup' processin the works, the data suggestit is occurring intergenerationallyamong the populations of the later entrants more so than the applicants, who are already closer to the so-called Western European norm. Fourth, the interpretation provided herein for the stunning result that the cultural practicesof the applicantstatesare more proximateto the cultural practices of the original six EEC membersthan are the cultural practicesof the later entrantsto thoseof the original six is that thereis often a greatermotivation for thoseon the far peripheryto assimilateinto the normsof the centrethan is the case for the popUlations close to the centre. From this point, it is concludedthat the incorporationof EastEuropeanstatesinto the EU, from a cultural point of view, hasgreaterpotentialfor the deepeningof European integrationthan for its erosion. More concretely, this analysis demonstratesthat the citizens of the applicant states from the East into the EU are moving towards full membershipin what canbe calledthe 2±1 cultural configurationof Europe.3 By this is meantthat all Europeanswho wish to participatefully in a wide rangeof mobility opportunitiesneedto be conversantwith an all-European continental culture. They must also be fully integratedinto the national culture of the statein which they are citizensand/orreside,and will thereby maintain the vital differencesin the so-called'mentalites'that differentiate intra-Europeannational cultures.Thus, all socially mobile Europeanswill needto participatein two complementarycultural worlds. ThoseEuropeans whose national culturesare close to the continentalnorm need only be a memberof a single cultural world (2-1); while those Europeansliving in 'foreign' Europeanstatesand thosewho live in regionsof stateswith statepromoted regional cultures may need to be fully acquaintedwith three

'THE EAST' AND EUROPEAN INTEGRATION

57

cultural worlds (2+1). All socially mobile Europeanswill thereforehave 2±1 cultural repertoires. Taking languageas the paradigm,in the emergingEuropeanquasi-state all socially mobile Europeansmust be fluent in what is becoming the continental language, English. They also must be fluent in the state languagein which they live. Thus bilingualism (the '2' of 2±1) is becoming a Europeanstandard.Regional cultural groups within states are getting increasingrecognition by both their central statesand by the EU. To the extentthat their regionalgovernmentscan requirethe languagesassociated with thoseregionsas mediaof instruction,or as necessarytools for regional governmentservice, residentsof those regions will be required to have a third language(2+1) in their repertoires.Thosewho live in the UK, where English is both the Europeanand statelanguage,needonly be equippedin one (2-1) language.Immigrantsfrom outsidethe EU as of now do not get seriouseducationin their home language,and their grandchildren,should their families remain in the EU, are likely to have languagerepertoires consistentwith the 2±1 schemejust outlined, dependingupon where they live. The relationshipof languageto (quasi)-statein this regardis not one of a particular language to a state, but of a particular configuration of languagesparticular to a state.4 The suggestionhere is that acrosscultural domains,complementary2±1 cultural repertoiresare emergingfrom below, and that EastEuropeis becominga part of this cultural configuration. The purposeofthis study is in fact to explorethis 2±1 configurationnot only in language,but in religious belief and in two realms of popular culture.To the extentthat the Easternapplicantsarejoining into this cultural configuration, we can project that the cultural barriers to political incorporation intothe EU havebeenlowered. STANDING AGAINST THE TIDE

There are three intuitions behind the theory of an emergentEuropean2±1 cultural zone that includes both East and West. First, the embeddedment of EasternEuropeanstatesinto someEuropeaninstitutions is inevitable,evenif EU membershipis long delayed. It appearsthat the material benefits for becomingpart of Europeand the opportunitycostsfor governmentsfailing to bring their countries into the framework of Europe are so high that governmentsof virtually all political persuasionswill see the institutional embeddedment within Europeasunavoidable.Politics will concernthe request for short-termexceptionsfrom Europeaninstitutional standards,and these politics will undoubtedlybe intense,with socialistpartiesbeing the strongest

58

THE ENLARGED EUROPEAN UNION

advocatesof statesof exception.Yet inexorably,at leastsomeEastEuropean states willbecomepart of Europe'strans-nationalinstitutional nexus. Second, authoritative institutions set the boundaries for cultural expressionwithin the societiesthat live within thoseboundaries.As Susan Watkins has shown with impressive data, in the nineteenth century demographic patternswithin Europe began to be explained far more adequatelybasedupon the country of residence(where peoplelived under the same political institutions) than by the so-calledcultural community within which a person identifies. Therefore, Spanish Basqueswere far closer to the Spanishmean than they were to a Basquemean, one which combinedthe Basquepopulationsof Franceand Spain.EugenWeber'sand Abram de Swaan'sseparateanalysesof languagepatternsin nineteenth century Europe show the same result. Cultural shift aligns with state institutions. And so the secondelementof my intuition: the more Eastern Europeanstatesareembeddedin Europeaninstitutionalstructures,the more 5 there will be a shift in cultural norms toward the Europeanstandard. Third, the naturalcarriersof nationalculturesoughtnot be thoughtof as the dominantmembersof the core societiesaroundwhich the nationswere historically constructed.In fact, elite membersof the corecultureswill have an interest in altering cultural norms in order to avoid the demeaning consequencesof becoming indistinguishableculturally from upwardly mobile imitators of their culture. Meanwhile, aggressiveand ambitious membersof peripheralsocieties,living under the authority of a dominant culture, will have an interestin mimicking that culture in order to secure positionsof responsibilitywithin it. To an importantdegree,then, it is the EasternEuropeanswho have a stronger interest in a utopian vision of 'Europe' as a well-defined (and easily mimicked) culture than culturally secureEuropeanswho are citizensof the West Europeanstates.6 Despite the apparentcogency of these intuitions, powerful evidence firmly groundedin field and archival researchstands against the thesis propoundedhere.Considerthe perspectiveon Polish Catholicismprovided by Maryjane Osa. She presentsrich historical data to undermine the argumentthat the church,becauseit stoodon the right side of history in its oppositionto communism,will lend supportto the economicand political transformationthat will bring Polandinto the Europeanworld. In fact, she argues,the organisationof the Polish churchmakesit all the more likely to becomea supporterof a 'new authoritarianism'in East Central Europe, where priests - and here she lends supportto Jowitt's imagery - will be aligned with demagoguesand colonels. She gives two reasonsfor her perspective.First, the church will be constrainedorganisationallyin its

'THE EAST' AND EUROPEAN INTEGRATION

59

searchfor social support,and will not easily be able to take political stands in the abstract,and ignorepopulardemandsfor social securitywhateverthe constraints.Second,in a post-communistvoid of social organisations,the hierarchyand ethosof the churchare (like its Leninist predecessor)against the secularindividualism of the West. The church, shefears, will be on the vanguard of reaction rather than in support of integration into West Europeanculture.7 Considernext the argumentof KatherineVerdery, whosefield research is in Romania, another of the applicant states.Verdery has, to be sure, picked up the utopian vision of Europearticulatedin Romania.References to the former hegemonto the eastin post-CeaucescuRomaniandiscourse, she reports, exhibit fears of a renewed 'Slavic imperialism' or getting sucked into 'BolshevistAsiatism'. Meanwhile Europeanutopianistsclaim that proposedsolutionsto the problem of national minorities will be 'oldfashioned'until Romaniansare able to discussthem 'at a Europeanlevel'. This utopian discourseshowsa greaterconfidencein 'Europe' than would be exhibitedby most sectorsin Europe'score, which are far more subjectto 'Euro-scepticism'than is the periphery. But Verdery claims that this utopian vision is an 'urban intellectuals' concept', one that is unconnectedto village life. In the villages, shewrites, a quite different story emerges,with a view of Europethat is infected by Ceauescu's indigenistideology that has a nearfascistnation-discourse.The real electoral imperativein Romania, Verdery argues,is to win political supportamongthe anti-Hungariansliving in Transylvania,who are angered by the Hungarian population's demands for autonomy, and who are uninterestedin merely receiving individual rights. Second,to many rural voters, 'Europe' implies a disappearingsocial safety net, and the potential loss of communist-erapensions.Finally, Verdery emphasisesthat leading politicians in Romania,including PresidentIon Iliescu, were presentingto their publics a vision of Europe as filled with 'nationalised states', something that Romania must accomplish before joining into a wider Europe. Thiswould naturally involve a form of nationalcleansing,Verdery fears. And this explains why, in 1993, Romania sent a delegation to Strasbourg,personallyappointedby the President,for talks on joining the Council of Europe,that was filled with anti-Europeanists.While Europeis moving in a liberal direction, the implication of Verdery'ssensitiveanalysis is that Romania is moving not towards a Europeanutopia, but rather towardsa political culture of anti-liberalismand intolerance.s It would be foolhardy indeed to dismiss these two cogent - and thematicallysimilar9 - treatises.Yet, when comparedto the 'real' Europe,

60

THE ENLARGED EUROPEAN UNION

the 'applicant' Europe does not look like it has been submergedin a half century of anti-liberal Leninism. To be sure, the Polish church and Romanianpolitical parties are examplesof illiberal institutions. But from the level of culture taken here, the populations of the East European applicant states look to be very much part of an emerging continental European culture; and the younger generation living in those states is quickly becomingpart of it. In fact, the very division of Europeinto 'East' and 'West' seemsto be defunct,a productof the cold war.10 Futureresearch will haveto reconcilethe findings of Osa" and Verdery with thosepresented here; but Osa and Verdery might well have idealisedWesternEuropea bit too much, making the illiberal strandsthey saw so clearly in EasternEurope look un-European.They may also have missed some of the broader institutional constraintsimplied in Europeanmembershipin their focus on within-statepolitical processes. EAST EUROPE AND THE EMERGING EUROPEAN LANGUAGE CONFIGURATION

Although it is not publicly acknowledged,a 2±1 languageconfigurationis consolidatingitself in WesternEurope.Businessmen,studentsand Eurocrats - virtually anyone who seesa careerin a Europeancontext - must know English. Although Frenchis the languageof the EuropeanCourt andit is still a preferredlanguagein severalEuropeaninstitutionshousedin Brusselsand Strasbourg,no languageother than English has a claim as an all-European lingua franca. Meanwhile, state bureaucraciesand school systemsoperate through state languages;it is not possible to survive economically or to communicatewith stateofficials in any Europeanstatewithout speakingthe state language.Finally, regionally basedgroups (with the Catalansin the lead, but the Basques,the Welsh and the Oc-speakersfollowing) are making similar demandsupon their residents, as educational texts, government memos and public pronouncementsare increasingly written in regional languages.The resulting 2±1 configuration is an eqUilibrium becauseno party to it (stategovernments,regionalactivists,the EuropeanCommission, socially mobile Europeans)has an interestin deviating from it (though the Frenchgovernmentis a partial exception).It is a self-enforcingbottom-up solution to a linguistically posedco-ordinationproblem. Will the East European states become part of this language configuration?The data from the ISSP surveys,with the sampleincluding three membersof the original EEC (West Germany,Italy and Netherlands), six membersof the expandedEC (Austria, Ireland, UK, Spain,Swedenand

'THE EAST' AND EUROPEAN INTEGRATION

61

East Germany), and seven applicant countries (Poland, Latvia, Czech Republic, Slovakia, Slovenia, Bulgaria and Hungary) suggest that the answeris 'yes'.12 Respondentsin virtually all the countriesoverwhelmingly report that the titular languageof the country (that is, the languageafter which the stateis named)is their homelanguage.In this sense,all member states(with some limited exceptions)and applicantsare 'nation' statesin the sense of having co-ordinated on a single language for home life. Exceptionsinclude Latvia where only 63.8 per cent speakLatvian as their principal home language(the rest mostly speaking Russian) and Spain, where 80.7 per cent claim Spanishas their first languageand only 1.3 per cent more claim to speakSpanishfluently.13 In any case, in none·of the countriesin the surveyis thereany evidenceof a lessthan dominantrole of the statelanguageas the principal languageof home life. Second, the role of English as a lingua franca throughout Europe is becominga fact of life. Concerningfluency in the three contendersfor a Europeanlingua franca among the original EEC members:29.8 per cent overall claim fluency in English; 52.7 per centin German;and 11.3 per cent in French(but note that neitherFrancenor Belgium was part of the sample). But the dataon secondlanguagelearningis moretelling. Among thesesame original EEC members,29.7 per cent speakEnglish as a supplementary language, while only 6.8 per cent speak German as a supplementary language,and 11.2 per cent speak French. This suggests that although Germanhad the most first languagespeakersof the original EEC, English amongstthis set has becomethe preferredsecondlanguageof respondents. In the later generationsof EU members(in which English as supplementary languageis reducedsubstantially,as the UK and Ireland are two members of the sample),7.4 per cent speakEnglish as a supplementarylanguage,1.5 per cent speakGermanand 4.4 per cent speakFrench.Among the applicant countries,German(with 8.6 per cent) outpacesEnglish (with 5.7 per cent), but Frenchhas merely 1.0 per cent. Among thoseunder 35 yearsof age in the applicantcountries,however, 11.7 per cent claim fluency in English as a supplementarylanguage whereasonly 10.6 per cent claim that for German.Two points are clear. First is that French may have ideological appeal to some; in reality, it is not a languageof wider communication outside a few corridors of power in Brussels and Strasbourg.Second, English hasalreadybecomeor is becomingthe widespreadsecondlanguage of choice in all three sets of countries. It is the language of wider communicationin all of Europe. The outlier casesconcerningthe multilingual repertoiresof Europe are not amongthe applicants,but ratheramongthe additionalmembersafter the

62

THE ENLARGED EUROPEAN UNION TABLE 1 LANGUAGE REPERTOIRESBY TYPE OF COUNTRY (ALL COUNTRIES IN SAMPLE)

Language Situation! Country Type

Monolinguals

Fluent Fluent Has an EU language in in other than English Russian English as 2nd

Has an EE language as 2nd

Original EEC

62.6

29.8

0.6

35.5

1.7

Later Member

79.1

51.1

1.0

20.0

0.2

Applicant

76.0

5.7

9.8

13.6

5.6

original six. As can be seenfrom Table 1, the respondentsfrom the later membersare far more likely to report being monolingualthan respondents from the countriesfrom the othertwo groups.This is not just due to the UK and to Ireland, which, given the 2±1 configuration, ought to be monolingual. But consider Spain, where nearly 79.2 per cent of the population reports being monolingual, and over 99 per cent of the multilinguals report speakinganotherlanguageof Spain(Catalan,Galician, Basqueor Castilian) as their secondlanguage.Even taking the UK and Ireland out of the sample,later membershave 74.6 per cent monolinguals, considerablyhigher than in the original entrantsyet slightly lower than the respondentsfrom the applicant states. Therefore, if there is a noncosmopolitanoutlier set for this part of the languageconfiguration,it is the later entrants rather than the applicants who supposedlydo not belong 'culturally' in the all-Europeanconfiguration. EAST EUROPE AND THE RELIGIOUS BELIEFS OF ITS CITIZENS

In 1991,ISSPsponsoredan earlier study, with a somewhatdifferent sample of countries, that focused on religion and religious belief. Among the original six, West Germany,Netherlandsand Italy were included. Among the later entrants,samplesfrom GreatBritain, NorthernIreland, Ireland and Austria are includedin the database.Among the applicantcountries,there was Hungary,Slovenia,Polandand (with a different coding for 1991 than it receivedin 1995) East Germany.J4The data also show what was indicated in the nationalidentity surveyaboutlanguage:that thereis a greaterlevel of commoncosmopolitanism,multilingualism and here secularismamongthe original members and present applicants than there is among the later members.If there is an intergenerationaltrend, it is towards the later

'THE EAST' AND EUROPEAN INTEGRATION

63

memberscatching up to the secularismof the original membersand the presentapplicants. The findings shouldbe no surpriseonceit is recognisedthat the Ireland and Northern Ireland samplesare extremely religious (on most questions more so than the Poles), while the East Germans and Hungarians are extremelysecular.Considerthe question(v26) of whetherthosewho do not believe in God are unfit for public office. Of the country samples,the two highest scoresare among the later entrants,Ireland and Northern Ireland where22.7 per cent and 29.6 per centrespectivelyeitheragreedor strongly agreed.Among the two lowest scoresare Netherlands(3.6 per cent) and EastGermany(3.9 per cent). On the questionof respondents'belief in the Devil (v35), againthe highestscoreswere from Ireland (48.6 per cent) and Northern Ireland (68.1 per cent), and the lowest both from the applicant states,East Germany(6.5 per cent) and Hungary (11.3 per cent). On the questionof respondents'beliefs about heaven(v36), 90.3 per cent of the Northern Ireland respondentsand 87.2 per cent of those from Ireland answeredthat there is definitely or probably a heaven.Comparethis with the five lowest scores: 20.1 per cent in East Germany, 28.2 per cent in Hungary,40 per centin Netherlands,42.3 per centin Slovakiaand 42.7 per cent in West Germany.Meanwhile,all four of the later entrantsare among the six countrieswith the highestpercentages - after the two Irelands,Great Britain as 54.3 per cent and Austria 45.9 per cent. Five questionsexaminedthe degreeto which religious criteria should playarole in public authority. The questionsare: (1) WhetherR agreesthat politicians who do not believe in God are unfit for pubic office (v26); (2) WhetherR agreesthat religious leadersshould have no influence on how peoplevote in elections(v27); (3) WhetherR agreesthat there ought to be more people with religious beliefs in public office (v28); (4) Whether R agreesthat religious leaders ought to have no influence in government decisions(v29); and (5) WhetherR agreesthat religious organisationshave too little power (v30). Eachof the answerswere on a five-point scale,and they were recodedso that a 5 representedviews that governmentought to be highly influencedby religious values and leaders,and a 1 represented views that governmentought not be so influenced. The sum of the five answerswas divided by five, giving an index rangingfrom one to five. The sample was then weighted such that there were the same percentageof respondentsfor eachcountry, basedon country population. Again with the weighted samplea regressionmodel was run with the index for religious influence in governmentalaffairs as the dependent variable. Age was controlled for, as well as whether the mother of the

64

THE ENLARGED EUROPEAN UNION

TABLE 2 REGRESSIONMODEL WITH APPROPRIATE LEVEL OF POWER FOR RELIGION IN GOVERNMENT AS DEPENDENT VARIABLE, COMPARING ORIGINAL EEC MEMBERS, LATER ENTRANTS AND PRESENT APPLICANTS, WITH CONTROLS

Variable Dummy for Later Entrant

.224098 (12.351) .105763 (5.903) 5.26170E-04 (1.149) .006985 (12.351) .080282 (5.139) .105775 (7.524) 1.617763 (46.984) .04901

Dummy for PresentApplicant Education Age Dummy for Mother RomanCatholic Sex Constant R squared Notes: Bold indicatesp 35 years)

Original EEC

2.1438 2.1959

Later Member

2.3309

Applicant

2.2424 2.2660

2.3722

«

Young 35 years)

Change in mean

2.0567

.1392

2.2583

.1139

2.2029

.0531

respondentwere a Roman Catholic, respondent'ssex, level of education, andthendummiesfor eachof the threestagesof membershipin the EU. The model in Table 2 shows the results of an equation that enters both the applicantand later dummies,which in effect compareseachof them with the original members.The result showsthat the averagerespondentfrom a later entrantcountry will have a scoreon the religiouspower index that is twice as far (in the more religious sense)from the averagerespondent from an original member country than the averagerespondentfrom an applicantcountry.

'THE EAST' AND EUROPEAN INTEGRATION

65

Table 3 showsthesedifferencesas comparativemeans.Here we seethe differencesamong the three categoriesof states;and as well for two subpopulations- thoseunder35 yearsold andthose35 yearsor older. The final column showsthat from an intergenerationalpoint of view, it is the young populations of the later entrants who are moving more quickly to the religious culture of the original six than the young popUlations in the applicant states.One might interpret thesedata as showing that the later entrantsadjustedculturally from one generationto the next in light of EU membership;but that such a cultural shift is not as necessaryfor the populationsof the presentapplicantcountries. The list of religions - as the ISSP study differentiated among 29 religious denominations- was recodedto a list of five: (1) Catholic, (2) National ChristianChurch,(3) Protestantsand thosewho called themselves Christians with no denomination,(4) Non-Christian and (5) No religion. Tables4 and 5 presentdataon correlationcoefficientsamongrespondents' reportsof religious affiliations of themselves(themselvesas children) and closefamily members.No cleartrendsemerge,but therearetwo interesting results. First, rather surprisingly on two measures,religious similarity of mother and father, and religious similarity of respondentand spouse,the respondentsin the later entrantcountriesshowa far morecosmopolitanbent than either the respondentsfrom the original six or from the applicant countries. Since on other measuresthe later entrants were the noncosmopolitans,this suggeststhat thereis not a single 'cosmopolitan'factor when it comes to culture. Second, there is a vast difference among respondentsfrom the applicant countries in reporting their religion as a child and their current religious affiliation. Reports on religion as a child suggeststhat under communistrule there was little attention to religious membershipin family life. Reportson the currentreligion of the respondent suggeststhat after the fall of communism,people began to accept their ascribedreligious labels as part of their identity, even if they report being atheists,and marry within their ascribedgroups.In fact, thereis far greater religious endogamy(computedas in Table 5 rather than the low level as computedin Table 4) among the respondentpopulationsof the applicant statesthan the other two sets. It may be arguedthat the samelevels of secularisationindicatedby the datahavevastly different meaningsin the Westandthe East,as the Eastdid not experiencethe history of the Enlightenment,nor was its secularisation the cumulativeimpact of individual agnosticism.Ratherthe secularisation in the East was due to intensereligious delegitimisationby the agentsof Sovietcommunism.Datado not allow a rejectionof this interpretation.But

66

THE ENLARGED EUROPEAN UNION TABLE 4 CORRELATIONS BETWEEN RELIGIOUS IDENTIFICATION AMONG FAMILY MEMBERS (WEIGHTED)

Relationship! Country Type

R (as child) and Mother

R (as child) and Father

R (as child) and Spouse

Mother and Father

Original EEC

.8322

.6885

.6187

.7301

Later Member

.6327

.2159

.1954

.2538

Applicant

.3062 .2636

.4010

.7784

Note: Theseare correlationcoefficientsbasedupon v50-v53 in ISSPreligion survey. TABLE 5 CORRELATIONS BETWEEN RELIGIOUS IDENTIFICATION AMONG FAMILY MEMBERS

Relationship Country Type

Respondent and and Mother

Respondent Father

Original EEC

.6264 .6120

Later Member

.4486

Applicant

.7953 .7802 .8292

.4514

Respndent and and Spouse

Mother

.6244

.7836

.3855

.6780 .2336

Father

.8545

Respondent now and Respondent as a child .6698

.0362

Note: Theseare correlationcoefficientsbasedupon my recodedand compressedvaluesbased upon v50-v53, and vl06.

how could the Soviet rulers have been so successful in achieving secularisationfrom abovewhen theycould not instill socialistvaluesfrom above? East European secularisationcould therefore be accepted as individual and reflective of the sameEnlightenmentprocessesthat pushed citizensin the original six towardssecular,cosmopolitanworld views. Overall, then, the religious surveyspoint to an EasternEuropethat is quite close to the norms of the original EEC membersin regardto beliefs and valuesconcerningthe role of religion in public life. And they arecloser in fact than respondentsfrom the later entrants,and now membersof the EU. It would be difficult, with thesedataon the table, to arguethat thereare religious culturesin EasternEuropethat are reinforcedby the hierarchical valuesof Leninism, and which supportanti-liberal values. The data are consistentwith the cultural configuration notion of the emergentEuropeanquasi-state.There is an emerging secular religious culture throughout Europe, one that seesreligion as inconsequentialfor

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political life. There is, complementarywith this secularreligious culture, a high level of membership in and identification with nationally based churches,within which thereis considerableendogamy.Thus two religious culturesare in simultaneousexistencewithin many Europeanrespondents. There are of course many minorities who develop separatereligious traditionsalongsidethe secularisationof Europeand possibleconnectionto the national churches,making for a 2+ I religious culture: most European citizens will be highly influencedboth by a universalistsecularismas well as by an identity connectedwith the church associatedwith the dominant population(the 2 religion formula). Religiousminorities will be affectedby both thesereligious traditions, but will be free to participatein rituals of their own religion (2+1). Of course,therewill remaina classof true secular cosmopolitans,with no connectionto any nationalchurch(2-1). This (2±1) multiple religious configurationis in equilibrium, not in tension,with itself, and reflective of both West and East. EAST EUROPE AND POPULAR CULTURE

Popularculture (herefilm and music) has two profiles. On the one side, its productsare industrial commoditiespervadingmarketsall over the world, no different from detergents.On the other side, its productshelp reproduce local, national and/ortransnationalcultures.The Frenchgovernmentseeks to compete with 'Titanic' the movie and 'Tide' the detergent for an overlapping set of reasons.One reasonwhy they want to respondto the former (andnot a reasonto respondto the latter) is a fear that a globalised artistic industry would reduce the symbolic space that encompasses 'Frenchness'.In any event, thinking of its cultural profile, the dataon film and music,faux de mieux,show EasternEuropeand membersof the EU to be part of a common global regime, in film dominatedby United States' production and distribution hegemony,and in popular music by a West EuropeanlNorthAmericanduopoly. Film

In the film industry,hegemonyis found in Hollywood. ConsiderTable 6, on the 'top ten' films in four recentyearsreportedfrom four of the original six (Germany,Netherlands,FranceandItaly), two of the later entrants(UK and Spain) and four applicant states(Hungary, Latvia, Poland, and Slovakia). The first remarkablefact is that in noneof theseten countries,andin all four sampleyears,are fewer than half of the 'top ten' US productions.Thereare a few reasonswhy all Europeansare attractedto the sameinternationalist

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TABLE 6 THE 'TOP TEN' FILMS: SELECTED COUNTRIES, SELECTED YEARS [FIGURES REPRESENTTHE PERCENTAGE IN THE COUNTRY, FOR EACH YEAR] [PERCENTAGES: DOMESTIC, OTHER EUROPEAN, AND US FILMS]

Country

1992

1995

1996

1997

Original six EEC members Germany Netherlands France Italy

10,0,90 10,0,90 40,0,60 10,0,90

10,0,90 20,0,80 30,0,70 30,0,70

20,0,80 0,0,100 40,0,60 20,0,80

30,20,50 0,10,90 40,10,50 30,20,50

Later EC entrants Spain United Kingdom

0,0,100 0,0,100 0,0,100 0,0,100

0,0,100 10,0,90

10,20,70 20, 0,80

Applicantstates Hungary Latvia Poland Slovakia

0,0,100 0,0,100 NA NA 0,10,90 NA 0,0,100 0,0,100

NA 0,0,100 0,0,100 0,0,100

20,20,60 10,10,80 30,10,60 0,30,70

Sources:DerekElley, Variety Movie Guide '97 (London: Hamlyn 1996); EuropeanCommission, Panorama of EU Industry 95/96 (Brussels: Office for Official Publicationsof the European Communities 1995), pp.27.1-27.22;International Motion Picture Almanac for years, 1991, 1992, 1995, 1996, 1997, 1998 (Chicago: Quigley Publishing Co.); Screen International Euroguide(London: British Film Institute 1996); and Variety International Film Guidefor 1994 [for dataon 1992] and 1998 [for dataon 1996] (Los Angeles,Silman-James).

movie culture. First, big-budget US films are better produced and technically superior, for example with respect to special effects and animation, and thereby attract wide audiences throughout the world. Second,the Europeanfilm industriesare poorly funded,savefor UK, Spain, Italy and France. In the Eastern Europeancountries, the political and economicturmoil in the pastdecadevastly reducedthe productionof films. Thus there has beenno serious 'European'alternative,though the figures for 1997 suggesta counter-trend.Third, someof the bestEuropeandirectors are beingattractedto Hollywood, andhelp produceAmericanfilms. Fourth, successat the box office requirescontrol over distributionalnetworks,from producersto theatres,and this systemis now fully dominatedby a handful of massivedistribution chains,all with close ties to the Hollywood majors. In Spain, for example,96 domesticfeature films were producedin 1996, and film attendanceis rising. Yet only 38 of the 96 domesticfilms, due to lack of a local distributor, received at least one public showing. The enormousnew growth of multiplex theatresin Europe(with 120 in Spain, 40 in Germany,25 in Netherlands,and 98 in the UK in 1997) plays into the

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handsof the distributional giants. Despitethe enormousgrowth of screens, by putting the best screensunder control of the giants, the result may actually lower the chancesfor a screeningof domesticfilms. A secondfact illustratedby Table 6, perhapsevenmore astonishingthan the first, is that in noneof the countriesdoesany film producedoutsidethe US or Europe make it into the 'top ten'. This means that Russian, Australian, Hong Kong and Indian films (the latter two having extraordinarilylarge film industries)did not penetrateinto the upperlevels of box office successamong the membercountriesof the original six, the later entrants,or the applicantstates.The cultural influence of films from these countries has been negligible in the realm of European popular culture. A third importantfact that comesout of Table 6 is the relative weakness of Europeanfilms outsidetheir homecountries.In the datafrom 1992, 1995 and 1996, not one Europeanfilm made it to the 'top ten' in another European country. The data from 1997 suggest that a pan-European audiencefor Europeanfilms is perhapsemerging.The leadingfilm for 1997 in all countriesof the samplewas 'Mr Bean',basedon a BBC TV seriesthat is in the genreof comedicpantomime.This film did not makeit into the US 'top ten', suggestingat leastsomeautonomyof Europeanmovie tastesfrom Hollywood blockbusters.Overall, the WestEuropeanfilm industry, notably in the Netherlandsand Germany,has achievedsomewhatof a renaissance in the late 1990s, as young film directors, often working through film divisions of state-ownedTV networks,havemademore films on issuesthat affect young people. Europeanjoint ventures is a related route towards competitionwith America. From 1993 to 1996,for example,Latvia had not produced a feature film, and its market was heavily dominated by US productions.The first new film in 1996 was a co-productionwith a West Europeanconsortium.IS Joint ventureswith the US industry offer another route to quasi-autonomy.One of the Europeanproductionsin 1997 that madeit to three 'top tens' outsideFrance,where it was produced,was 'La Femme Nikita'. This was a joint French/US production in reality (distributedin the US underthe name'The Fifth Element')andit starredthe American actor Bruce Willis. It was not amongthe US 'top ten' for 1997. Another (albeit small) spark to the European film industry is 'Euroimages',formed under the aegis of the Council of Europe in 1988. Sinceits creation,with a meansupportfigure of about12 per centof budget, Euroimageshas co-producedsome 460 feature films and documentaries. Presently,all six of the original EEC membersare membersof Euroimages, as are eight later members(Austria, Finland, Denmark, Greece,Ireland,

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Portugal, Spain and Sweden, with the UK recently leaving), and six applicantcountries(Bulgaria, CzechRepublic, Hungary, Poland,Romania andSlovakia).16Itseemsclearthat to the extentthat thereis competitionvisa-vis the American film industry in both West and East Europe,it will be films from Europeitself (and virtually nowhereelse) that will move into a secondposition in domesticmarkets. A fourth fact that comesout of analysisof Table 6 is that the applicant states share with the rest of Europe a common movie culture. The dominanceof Americanfilms has beenclear. Until 1997, in fact, there was only one film that was not American in the four applicantstates.This was 'Priest', producedin the UK, which Variety describedas 'an absolutely riveting, made-for-BBC slice-of-life drama that's a controversiallook at incest, gay-life and the Catholic Church'. The movie was seen by approximately430,000Polesand generatedjust undera million US dollars in revenue. As with the rest of Europe, the applicant states had only fledgling domesticproducts.Also, as with the rest of Europe,the popularity of films madein otherEuropeancountries(apartfrom 'Priest')appearsonly in 1997. Most interesting,given the so-calledlegacy of the socialist past, among applicant statesno non-Americanor non-Europeanfilms made it onto any 'top ten' list. Thus, one might say thereis a European2±1 film regimein early stages of development:American films dominatethroughoutEurope; some state film industries are either strong (as in France and Italy) or re-emerging (Germany, UK, Poland) which will representan alternativefilm culture. Finally (and this componentis different from the languageregime), transstateEuropeanfilms are developingtheir own marketswithin the EU and outsidetheir nationalborders.OutsideAmericanfilms, only Europeanfilms seem to have the power to capture a limited share of trans-European markets. All other national film industries (and film industries from the regions within Europeanstates)will play only to boutiquemarkets.In this sense,both West and EastEuropeare part of the samefilm culture. Popular Music

In the world of popularmusic, the applicantstatesto the EU are part of a global music regime that is commensuratewith the film industry. An English-languageinternationalistpopularmusic is the dominantseller.Each country has its own national version of international pop that sells well domestically.Finally, Europeancountriessell their top recordsto consumers in other Europeancountries.The data show that the applicantstatesto the EU are very much part of this configuration.

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The internationalmusic businesstoday is onein which the United States and five EU countriessharea duopoly. Threemajor EU companies(Thorn EMI in the United Kingdom; PolyGram in Netherlands;and BMG in Germany)accountfor about40 per centof the world marketin sales,on par with sales from US companies.In many respects,West Europeanyouth culture hasbegunto surpassthe Americansin settingstandardsfor musical trends. The result is a powerful global pop music culture that pervades WesternEurope. In EasternEurope especially,but in WesternEurope as well, therearethreemusicalcultures:first, the global pop music culturethat arrivesin the EasternEuropeanstateswith a markedtime delay; second,the remnantsof national pop music culturesthat have not beenentirely erased by the global market; and, finally, a healthy market of Europeanpop that sellsquite well throughoutthe EU andEasternEurope.Therefore,onecould call the Europeanpop culture configuration a 2±1 outcome(as the UK's English languagepop is both titular and pan-European). Popular music has become so global in the past generationthat the national origin of popular music and the artists who produceit are blurred and difficult to code. In the early post-World War II generation, Americanisationwas clear.'7 Radio Luxembourg(as well as the US Armed ForcesRadio Network) brought American rock and roll to Europe in the 1950s. The 1960s-70s saw the supposed 'Americanisation of youth culture'. In fact, the so-called 'British Invasion of America' was really a momentof recognitionin the UK that their artists' true market was in the US, and contractswith US recordingcompaniesthe criterion of success. But a European disco culture grew from semi-obscurity to world dominancefrom the 1970sto the 1990s.In the early 1970s,a genreof 'Euro Pop' -a combinationof Eurovisionsongcontestentriesandthe disco-dance sound from holiday danceclubs in Ibiza - beganto develop on its own, outside American direct influence. ABBA, a Swedish disco act, went beyondthe confinesof Europe,and broughtthis chirpy singalongmusic to internationalaudiences.As the genredeveloped,it hit the gay disco scene, and influencedthe German/ltaliandisco soundcalled 'Eurobeat'in which high quality technologygavethe music a sheenthat assuredclub and radio play. With the Americandisco scenefading away, British companiesbegan producing not for the Americans, but for Europeans,as Europe's sales growth was far more robust. The marriage of Britain to Europe made Europea genuinechallengerto the US for the definition of an international youth music. The 'internationalpop' that constitutesthe first part of the 2±1 formula is largely English in language(as would be expectedfrom the data on

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languageuse)but multicultural in form. A significantproportionof EU hits originatein the UK and Ireland, but even thoseoriginating from Germany, the Netherlands,Sweden,Austria and Denmark(and sometimesSpain as well) feature English titles and texts. While most of the lyrics for these songs areso primitive that it seemsgenerousto call them 'language',the words tend to be English ones. In Table 7, we see that in ten selected countriesfor 1999, only in France(and of coursethe UK) do a majority of titles in the 'top twenty' appearin the titular language.For 1999,taking the mean percentageof original six countries(Germany,Netherlands,France and Italy - where only the 'top ten', not 'top twenty', are recorded),later members(only Spain,as in the UK the titular languageand English are the same),and applicants(Hungary,Latvia, Polandand Slovakia- whereonly 1998dataareavailable)revealsan alreadyfamiliar pattern.The meanfigure is 73.8 per centof Englishlanguagetitles for the original six and70 per cent for the later member (here only Spain). Thus the mean figure for the applicantstates(at 75 per cent) showscloserconnectionto the original six than doesthe figure for the later member.As a rule, foreign languagetitles, other than English, rarely make it into individual country charts,the figure never going over ten per cent. In a data base going back to 1992 (not shown), occasionallya Germanlanguagetitle hits the Dutch charts, or a Portuguesesong the Spanish, or a French and/or Italian song receives generalEuropeaninterest.For example,in 1998, a Russiansong appeared successfullyin the Latvian charts. But in general, apart from English, foreign languagetitles do not reachthe top of the popular music chartsin the Europeancultural configuration. The dominanceof the English languageis attenuatedby attemptsto cultivate a sexy multicultural image. A good exampleof this is Sash!, a Germandisc jockey (SaschaLappessen)who employsvarious vocaliststo sing in different Europeanlanguages.He has had five 'top five' hits from 1997 to 1998 (,Encore un Fois', 'Ecuador', 'Stay', 'La Primavera' and 'MysteriousTimes') with titles in three languages,none of them German. In the February1999 listing of the 'top ten' or 'top twenty' from the nine countriesfor which we have data,therewere 170 different titles, but of the 22 that appearon the lists of more than one country, only one of thesetitles was not in English. The secondpart of the expression2±1 refersto music that plays mostly, or primarily, to domesticaudiences.For example,the EU Industry Guide of 1995 reports that EU markets typically have 60 per cent of sales for 'international pop'. Domestic artists for domestic audiencescontribute around30 per cent. Classicalrecordingsaccountfor the final ten per cent.

73

'THE EAST' AND EUROPEAN INTEGRATION TABLE 7 LANGUAGE OF SONG TITLES IN THE 'TOP TWENTY' POP MUSIC CHARTS IN 1999 BY COUNTRY

Country

English

Titular

Other

Original six EEC members Germany Netherlands France Italy

80 80 35 100

15 10 55 0

5 10 10 0

Later EC entrants Spain United Kingdom

70 100

30 (100)

0 0

70 85 70 75

30 15 30 15

0 0 0 10

Applicantstates Hungary Latvia Poland Slovakia(1998)

Sources;The 1997 dataare from Variety Film Guide International (London: Faberand Faber 1999), pp.64-74;The 1999 raw music datawere downloadedfrom: Germany=hUp:/Iwww-info6.informatik.uni-wuerzburg.de/-topsi/deu_040299.htrnl. Hungary= http://www.externet.hu/mahasz/slagerkis.htm. Latvia =http://www.lanet.Jv/news/airplay/19991990214Iv.html. Holland = http://www.radio538.nl/charts/top40.html. Poland=http://www.radom.top.pl/radio/listaprz.htm. Spain= http://www.Cadena40.es/scripts/40w3/lst.asp. UK = http://www.dotrnusic.com/charts/top20singlesycprint.asp. Italy = http://www.televisual.netltelemusic/sp.html. France= http://www.ifopJr/actualitltop50/top50.htm.

In Greece, Italy and France, the second category - domestic pop - is somewhatstronger,accountingfor 40-60 per cent of the markets.In regard to language,as shown in Table 7, titular languagesongs have a grip in virtually all the Europeanmarkets, with France, Poland, Spain, Hungary and (of course)the UK being the strongest.On the chartsof 'top twenty' for February 1999, there are ten songs with French titles; but in no other country besidesFranceare thesesongsin the 'top twenty'. Although some of thesesongsare from a FrenchCanadianpopularmusicalthen playing in Paris and from French-singingNorth Africans, it is fair to say that while English languagesongs play internationally, French languagesongs play well only in Francophonecountries. Table 8 paintsa complementarypicture, and one that helpsdraw out the pan-Europeanaspectof the 2±1 configuration.It computesthe percentage of the 'top twenty' for 1999by the country in which the songwas produced.

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THE ENLARGED EUROPEAN UNION TABLE 8 PERCENTAGE OF 'TOP TWENTY' POP SONGS BY NATIONAL ORIGIN BY COUNTRY AND YEAR

Origin/Country

Domestic

EU-other US/Canada

Other

Unknown

Original six EEC members Germany Netherlands France Italy

25 10 35 0

10 15 5 20

25 45 35 40

0 0 5 0

40 30 20 40

Later EC entrants Spain United Kingdom

25 10

30 0

35 55

10 0

0 35

Applicant states Hungary Latvia Poland Slovakia(1998)

35 15 35 20

25 25 30 30

30 45 35 40

0 0 00 0

10 15 10

Sources:SeeTable 7.

Unlike the caseof film, every country in the sample(with Italy the major exception)hasa markednationalpresencein the top sellers.Also unlike film, EU productionssell widely beyond their national boundaries,and compete successfullywith Americanproductions.Taking the meansof the threesetsof countriesin the samples,we seethat for the percentageof 'top twenty' hits that are of domestic(national) origin, of the original six, the meanfigure is 17.5,andfor the later membersit is also 17.5,with the applicantsat 23.8. And showing the greatestpan-Europeansupport, the applicantshave the highest percentageof other EU at 27.5 per cent, with the original six having a mean percentageof 12.5 and the later membersa meanpercentageof 15. It is clear from thesedata that the EasternEuropeanapplicant statesincluded in this sampleare very much part of the 2±1 music configuration that marks the countriesalreadymembersof the EuropeanUnion. IS THIS ALL THERE IS TO CULTURE?

One might object and ask whether languagerepertoires,beliefs about the political relevanceof religion andpopularexposureto moviesandmusic are all thereis to 'culture', or whetherthe datapresentedhereare indicatorsof 'culture' at all. Considerthe discussionconcerninglanguagerepertoires.Two questions about the interpretationof these data speak to the core concernsof this

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study. First, is the 2±1 configurationin any way uniqueto Europe,or is it a function of globalisationthat is affecting all states?The answerto this is that while there are elements of globalisation that are reflected in the Europeanconfiguration(for example,the dominanceof English is a global phenomenon),the specificity of the repertoires is distinctly European. Considerthe following cases.Germansworking in Francewill expecttheir children to have a sound educationin German (as well as English and French),yet Algerians working in Francewill regardArabic as a language of the home, and not a languageof instruction in their schools. This is because German is a language of Europe while Arabic is not. The concessionsgiven to Catalan in the EU quickly get incorporated into political programmesin other minority languageregions,on a premisethat all Europeanregions have equal rights to full cultural expression.It is the casethat 2± I repertoiresmay becomemore commonin otherregionsof the world, and no doubt English will continue to play a larger role; but the elementsof theseconfigurationswill differ acrossregions.In this sensethe Europeanconfigurationwill be unique. Second,to what extentdo languagesusedfor specific domainsrepresent something'cultural' andnot just functional?This questioncanbe addressed by an analogy betweenchangingone's languagerepertoirewith religious conversion. As demonstratedby Nock, religious converts almost never imbibe the cultural ethos of the religion; rather they take advantageof the instrumentalbenefitsthat accrueto 'believers'of their adoptedreligion. It is only in successivegenerations,when for examplethe childrenof converts get educatedat the handsof the religious virtuosi, that a cultural shift takes place.18 This mechanismcould well operatewith languagerepertoires.In the presentgenerationof Languedociansborn after World War II, reliance on English may be thought of as purely functional, and reliance on Occitan may be purely recreational.But their children may well seethis multilingual repertoire as constitutive of their identities (combining the cosmopolitan and the local in a uniqueway), and appealto it with pride. To the extentthat a languagerepertoirebecomesconstitutiveof social identities,it is properly conceived of as cultural. And so the data cannot demonstratethat the emerging2±1 Europeanrepertoireis a fully developedaspectof culture; but intergenerationallyit is likely to becomeone. But even if the three realms analysedhere are cultural, and even if the interpretationof the long term implications of the dataare correct,are there not other, perhaps'deeper',elementsof culture that divide Eastfrom West? Ralf Dahrendorfraisedthis issuein a poignantway when an earlier version of this paper was presentedto the EuropeanCommitteeof Reflection in

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September1998. In particular,he asked,would the audienceof books and newspapers,as opposedto films and music, show the sameglobal culture? He thought not, as readingis far more national than continental.But more important,he insisted,thereis in the heartof Europea commonelementor value, one that respectsthe rule of law, carries with it a desire for social democracyand reflects 'a combinationof a desireto be a successfulpart of the global economy,but to also conductpolicies that favor cohesionand justice'.This value is not (now) sharedin the East,he fears,and he seesthis as ominousfor the EU shouldits core valuesbe diluted by too quick entry of the applicantstatesinto the EU. On Dahrendorf'sfirst point, it might be notedthat what constitutes'real' or 'deep'culture cannotso easily be discerned.Worse, looking ever deeper for culture subvertsany attemptat the systematicanalysisof the effects of culture. This is so becauseif we have an intuition that XS and Y s are different in a deepway, any evidencethat they sharecultural traits will be written off as 'shallow'. Since it is always possibleto dig a bit deeper,the intuition cannotbe scientifically undermined.All that is claimedfor the data presentedhereis that evidenceof a cultural divide betweenmembersof the EU and applicantsfrom the East is lacking in three domains of culture. Thosewho wish to examineotherrealmsare welcometo do so; and if they find a cultural divide between Eastand West, as might havebeenexpected from the researchof Verdery and Osa, the findings here would needto be revised.But as yet thereare no systematicdata, only vagueimpressions. Dahrendorfalso claims that in political culture, those in the East may not havethe samesocial democraticvaluesand concernfor the rule of law as do the populationsof nearly all of the presentmembersof the EU.19 This may well be true, but trivially so. This study has postulateda range of cultural variables as independent,and asked whether different values on these variables for new memberswould negatively impact the common political ventureof the EU, which is the dependentvariable.But if you want to collect data on 'respect for the rule of law' or 'the value of social democracy',you needto observepolitical behaviour,which is more or less the sameinformation that will inform the coding on the dependentvariable. Dahrendorf'sclaim thereforevergeson tautology.His thesisin caricatureis that there would be a clash of political values were the easternapplicant statesadmittedinto the EU becausethey havedifferent political values.My thesis is that if the applicant states fail to integrate into the European political community,it would not be becauseof cultural difference. My suspicionis that the thesisof cultural differenceis a canard,upheld by concernedcitizens and political leaderswho fear, for other reasons,the

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consequencesof joining East to West. It may be the case that for other reasons- economic differentials, non-institutionalisedsystemsof justice, non-consolidationof democraticelections - the attemptedintegration of eastern Europe into the EU would entail heavy costs. But there is no systematicevidencethat for cultural differencesthe costs would be any heavierthan the incorporationof Britain, Ireland, Austria andthe otherlater entries. Some positive evidencehas been presentedhere that those costs might be lighter than the incorporation of the already integrated later entrants. IMPLICATIONS FOR A DEEPENING OF THE EU

This studyhasmadethreeclaims,andprovideddatafrom threecultural realms to give supportfor theseclaims, all of which arein sometensionwith popular understandingof the dynamics of the deepeningof the EU and of the implicationsof EasternEuropeanincorporationinto the EU for that deepening. The first claim is that despitethe still and ever-vibrantnationalcultures that constitutethe memberstates(and associatednationalities)of the EU, there is an emergentcultural configuration in Europe that representsa common cultural (and proto-national)zone. Although there is significant cultural diversity betweennations and betweenstateswithin Europe, that diversity is containedwithin a coherentcultural system, such that most Europeanshave a set of cultural repertoireswhich enablesthem to act appropriately(that is, accordingto local standards)throughoutthe EU. For language,there is an emerging linguafranca, a continuedvibrancy of state languages,and a subsidisedsystem to protect minority languages.The norms for which languagesare to be used in which contexts are well internalised.It is the internalisednormsof the cultural systemthat constitute the common cultural zone. In religion, there is an EU-wide consensusin supportof a secularChristianity, a respectfor nationalchurchesthat do not meddle in political life, and a recognition as well of minority religious groups as long as the religious expressionof these groups is contained within that community. In popular culture, Europe participates in an international popular film and music system (the latter in which it is a duopoly producer)that is dominantin eachrealm, but eachhas a small but viable national production of film and music that is made for domestic audiencesand for other Europeans.Europeanstherefore have a common matrix for the productionand consumptionof popularculture. The secondclaim is that the applicantstatesfrom EasternEuropearefar closerto the Europeancultural systemthanis popularlyunderstood,or even

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recognised,by leading social scientistswho have observedthe cultural life of thesestateswith greatperspicacity.In fact, the preliminarydatashowthat in the cultural realms of languageand religion the applicant states are somewhat closer to the original six in a common cosmopolitanism (multilingualism in language;secularisationin religion) than are the later entering states into the EU. In aspectsof popular culture as well, the applicantstatesappearon somedimensionsto be nearly as internationalas the samplefrom the original six, and more internationalistthan the sample from the later EU entrants.Thesefindings are so counter-intuitivethat they demand future analysis. Of course it cannot be ruled out that in other cultural realms the East/Westdivide might be a deepone. But there is no evidencein the wide-rangingsetsof datathat went into this analysisthat the cultural configurationsof EasternEurope pose a threat to the emerging cultural systemof the currentmemberstates.20 The third claim is more of an interpretationthan a finding. It is that in dynamic nationalprojects(as Europehas become),there is greaterinterest in promoting a national culture in the periphery than in the centre. A particularly good exampleof this is to think of middle classJewishculture in post-emancipation Europe.21 The EasternEuropeanstoday, in significant numbers,seekto become part of a Europeannational culture that is clearer to them than it is to everyday West Europeans.To be sure, it might be argued, along lines suggestedby Bourdieu, that peripheral peoples are 'pretenders'with a negative(even cynical) view of the centre.They could well be emulating the centre purely for instrumental gain, while in fact they are more 22 This would be morein line nationalisticin their apparentcosmopolitanism. with the perspectivepresentedearlier from Verdery and Osa. The fact, however, is that the emulation, in seeking to learn English, in wanting secularrule, in listening to 'top ten' songsand watching 'top ten' films, is not a result of an effete class of social climbers (as was perhapsthe case with GermanJews). Ratherit is a massphenomenon,belying a notion of cynical adaptation. There is yet anotherimportant difference.Unlike the situation of postEnlightenmentJewry, West Europeansare not seeking to escapefrom a Europeanmould to keep a distancefrom those seekingto assimilate.The 'Catch-22'of the EasternEuropeansbecoming'Europeans'while the actual EU membersbecomesomethingelseis not thereforelikely. The morelikely outcome is that the pressuresof peripheralisationwill induce East Europeansself-consciouslyto promotea deepeningof a Europeanculture that West Europeansthemselveshaveless motivation to foster. Ratherthan

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eroding a common EU culture, the data in this study suggestthat East Europeanentry into the EU will contributeto its deepening.

NOTES Researchassistanceby Brett Klopp is gratefully acknowledged.Peter Katzensteinand Gary Herrigel provided useful commentson an earlier draft. Commentsprovided by membersof the Reflection Group on the EU's EastwardEnlargementat a meeting organisedby the European University Institute and the EuropeanCommission'sForwardStudiesUnit in September1998are also acknowledged 1. Here (with italics omitted and other small changesmade in the quoted texts) is Kalman Kulcsar'scharacterisationof a position that he arguesmust be overcometo achievethe goal of building upon what he considers 'the growing awarenessof the common elementsof Europeanculture'. See his 'East Central Europe and the EuropeanIntegration', in Mate Szabo (ed.), The Challenge of Europeanization in the Region: East Central Europe (Budapest:HungarianPolitical ScienceAssociation1996), quotesfrom pp.12-16. 2. The cross-countrydatafor languageand religion are calculatedfrom surveysconductedby the International Social Survey Program (ISSP), and the data are supplied by the Zentralarchiv flir Empirische Sozialforschung,in KOln, Germany, and distributed by the Inter-universityConsortiumfor Political and Social Research,Ann Arbor, Michigan, USA. While samplingproceduresdiffered in eachof the countries,the overall attemptwas to get country-widestratified samples,with total numberof respondentsrangingfrom about 1,000 respondentsin Italy to 2,700 in Russia.Full detailsof the surveysare availablefrom ICPSR at http://www.icpsr.umich.edu. 3. David D. Laitin, 'The Cultural Identitiesof a EuropeanState',Politics & Society25/3 (Sept. 1997),pp.277-302.As I discusslater, the cultural configurationfor popularmusic is 1+1. 4. On languageconfigurations, see Abram de Swaan, 'The Evolving EuropeanLanguage System:A Theory of CommunicationPotential and LanguageCompetition',International Political ScienceReview14/3 (1993), pp.241-55. 5. SusanWatkins, From Provincesinto Nations (Princeton:PrincetonUniversity Press1991); Eugen Weber, Peasantsinto Frenchmen (Stanford: Stanford University Press 1976); and Abram de Swaan,In Care of the State(New York: Oxford University Press1988). 6. This is a central argumentin PeterSahlins,Boundaries(Berkeley: University of California Press1989). I developthis themein Laitin, 'Cultural Identities'. 7. MaryjaneOsa, 'PastoralMobilization andSymbolic Politics: The CatholicChurchin Poland, 1918-1966' (Ph.D. Thesis, Departmentof Sociology, University of Chicago 1992). The speculationsabout the future are on pp.I-5. Her referenceis to Ken Jowitt, New World Disorder: The Leninist Extinction (Berkeley: University of California Press 1992). For a similar analysis, see Wodek Anio et al., 'Returning to Europe: Central Europe between Internationalizationand Institutionalization',in Peter1. Katzenstein(ed.), Taming Power: Germanyin Europe (Ithaca: Cornell University Press 1997), pp.200-204.They make the excellentpoint that in the post-Francoera, the SpanishCatholic Church (unlike the Polish Church after communism) reconciled itself to Spain's 'European vocation'. Thus the challengefor Polandto becomepart of Europewill be more difficult than it was for Spain. 8. Katherine Verdery, 'Civil Society or Nation? "Europe" in the Symbolismof Postsocialist Politics', chapter5 of her WhatwasSocialism,and What ComesNext? (Princeton:Princeton University Press1996). 9. Verdery, as with Osa,relies upon and has beeninfluencedby Jowitt, New World Disorder. 10. For a refusal to put the Visegradstatesin the 'East',yet an unwillingnessof most elites of thosestatesto becomepart of a 'CentralEuropean'alternative,seeAnio et al., 'Returningto Europe',esp.p.195 n.l, and pp.196,250. 11. In an article consistentwith both Osa and the position taken herein, Ewa Morawska, 'The

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Polish RomanCatholicChurchUnbound:Changeof Faceor Changeof Context?'in Stephen E. Hansonand Willfried Spohn(eds.),Can Europe Work? Germanyand the Reconstruction of PostcommunistSocieties (Seattle: University of Washington Press 1995), pp.47-77, arguesthat the Polish Catholic Church is indeeda bastionof reaction.However, she argues that its positionin regardto both public andprivate spheresis one 'that the majority of Polish society perceivestoday as detrimental to the satisfactoryfunctioning of the democratic nation-state'(p.48). She concludesthat when Poles observethe 'nakedrequirementsfor a concrete Christian ethos ... the negative perceptionsof the church as 'meddling' and encroachingupon people'slives are enhanced'(p.68). This is very much in line with West Europeanorientationstoward national churches. 12. As with the religion data, when I report percentagesfor all cases,or for the set of casesof either the original EEC members,the later entrants,or the applicants,I assigna weight to each respondent,the samefor all respondentsin each country, such that there is an equal percentageof respondentsas a function of the populationof the country. 13. My guessis that the 210 respondentswho claimedBasque,Galician or Catalanas their first home languagebut did not report Spanish as a languagethey knew well were giving surveyorspolitical ratherthan linguistic knowledge. 14. The reasoningon Germanyis as follows. It would be too early to considera poll done in 1991 to reflect EastGermanyas anythingbut an applicantto the EU. But by 1995, it is fully part of a country that was an original member. 15. Dataon the film industriesof Europecomefrom the sourcescited at Table 6. 16. Information on Euroimages has been downloaded from the world wide web. See: http://culture.coe.frlEurimages. 17. The following discussionis basedupon the analysisof Simon Frith, 'Euro Pop', Cultural Studies3/2 (1989), pp.166-72. 18. A.D. Nock, Conversion(London: Oxford University Press1933). 19. Seealso Fuchsand Klingemann(this volume). 20. Perhapsthereis a not-so-Eastsetof countriescloseto the EU norm (the Visegradand Baltic states)and a 'real' Eastthat is far from that norm (e.g. Romania,Bulgaria). My datado not allow me to addressthis possibility, but I am scepticalthat new datawould demonstratesuch a cultural boundary. 21. As describedby Zygmunt Bauman, 'Entry Tickets and Exit Visas: Paradoxesof Jewish Identity', Telos 77 (1988), pp.52-5: 'The Jewswho took the Enlightenmenton its word and identified emancipation with refinement of manners and, more generally, with selfcultivation, had becomecultural fanatics. In every Westernnation they were the oneswho treatednationalcultural heritagemost seriously... Trying to excel in the complexand often elusivetask ahead,they sungthe praisesof nationalmonumentsandmasterpieces of national art and literature, only to find that the audience comprised mostly people similar to themselves.They readavidly and voraciously,only to find they could discusswhat they read only with other aspiring Germansor Frenchmenlike themselves.Far from bringing them closer to assimilation, conspicuouscultural enthusiasmand obsessivedisplay of cultural nobility set them aside from the native middle class and, if anything, supplied further evidenceof their ineradicableforeignness... The self-destructivetendencyof assimilation also effected occupations[;] legal or medical careers ... offered particular attractions to assimilatingJews ... The unplannedoutcome... was ... an overrepresentation of Jewsin the professions,and a new set of argumentsto prove the Jews' permanentdistinctiveness.The abandoningof traditional Jewishoccupations,which from the assimilants'viewpoint meant Entjudung(de-judaisationof 'men as such')appearedto the baffled native public more like the processof Verjudung (judaisationof heretoforegentile areas).This was a 'Catch-22' plight [for which] there was no guaranteedescape'. 22. Pierre Bourdieu, Distinction: A Social Critique of the Judgementof Taste [trans. Richard Nice] (Cambridge,MA: HarvardUniversity Press1984), chapter6.

Discomforts of Victory: Democracy, Liberal Values and Nationalism in Post-Communist Europe VLADIMIR TISMANEANU

The purpose of this analysis is to identify the main threats to postcommunist liberal democracies,especially those perils related to the weaknessof pluralist traditions, institutions and values, and the rise of movements and ideologies rooted in cultural and political malaise, ressentimentand disaffection.But despitethis attentionto the perils, listed in the latter half, it must be madeclear that the purposehere is not to put forward apocalyptic scenariosfor post-communistsocieties,but rather a diagnosisof the main vulnerabilities of EasternEurope'spost-communist statesin order to evaluateprospectsfor further democraticconsolidation and risks for the rise and affirmation of ethnocraticpartiesand movements. To be sure, most of the pessimisticforecastsuttered in the aftermathof Leninism'scollapsein East-CentralEuropeand the former USSRhavenot come true. Twelve years after that seriesof world-historical events,more than onepossiblefuture canbe reasonablycanvassed,andthe likelihood for the worst-casescenario, one of a slide into regional ethno-nationalist anarchy, remains somewhatdubious.' Understandingthe post-communist political and cultural situation, including persistent isolationist, antiglobalisation, populist and nationalist trends, is therefore of critical importancefor interpretingthe main directionsthesecountrieswill pursue in their efforts to join the EuropeanUnion institutions. The new European democracieshave avoided the rise to power of staunchlyilliberal forcesand,in spiteof widespreadcynicismandcorruption, thereis a growing consensusregardingthe desirability of markets,free media and pluralist institutions. True, the situationdiffers from country to country, and from region to region. In South-EastEurope (often designatedas the Balkans),the transitionsturnedout to be moredifficult andproblematic:if we think of Romania, the results of the November-December2000 elections have brought back to power a political formation and a personality (Ion Iliescu andhis Partyof SocialDemocracy,afterJune2001 renamedthe Social

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DemocraticParty of Romania) with a long record of opposition to radical reforms. In Bulgaria, former King Simeonhas becomeprime minister after his political formation won the electionsin June2001 on a populist platform promising everything to everybody.2But even in these countries, nobody within the political mainstreamquestionsthe necessity,indeedthe imperative of joining Euro-Atlantic institutions. The magnetismof united Europe (or perhapsthe political myth of unified Europe)has thus playeda decisiverole in preventing anti-democratic forces taking the lead and subverting the democratic institutions. Many of the encouragingtrends in recent years, including the signing of treatiesbetweenHungaryon one handand Slovakia and Romania on the other, as well as the institutionalisation of political guaranteesfor minorities in most of thesecountries,are directly relatedto the pressureexertedby the EuropeanUnion and its affiliated organismson the political elites of the new democracies.WesternEuropeis clearly tired of the long history of strife, exclusivenessand bickering that madethe continent's twentiethcenturyhistory sucha bleakone, and the candidatesfor acceptance into the European Union realise that they have to come to terms with expectations of genuine commitment to human rights as well as a demystification of past experiences,including atrocities related to Fascism and Communism.3 Obviously, theseare challengesthat will take time to deal with, but the importantfact is that the new political elites have acceptedthe inevitability of integrativeprocessesand seemincreasinglyinclined to come to terms with the implicationsof globalisingprocesses,including a reduction of nation-stateprerogatives.The decision of the Serbian governmentto extraditeSlobodanMilosevic for trial in The Hagueunderchargesof crimes against humanity indicates that the democraticZeitgeist has an enormous contaminatingeffect: any Europeangovernmentthat wants to be treatedas part of the emergingunified structuresneedsto go beyondparochial, selfservingnationalistdemagogueryandrecognisethe needto addresslucidly the shamefulmomentsof their countries'past.4 The typology of the post-communisttransitions can be briefly (and somewhatsimplistically) describedas follows: (a) the Central European successful democratic experiments (Poland, Czech Republic, Hungary, Slovenia,Baltic states),where markets,political parties,free media, legalconstitutional structures and dynamic civil societies have developed relatively smoothly and with palpable positive results; (b) the protracted, middle-of-the-road transitions (Bulgaria, Romania, Croatia) where the presenceof former communistsand neo-populists,and the weaknessof pluralist forces have prevented the rapid economic, legal and political reforms; and (c) the quasi-democracies with strong authoritarianpotential,

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continuousattemptsto limit the freedomof the mediaby either political or financial operators,strong neo-Communistformations and a beleaguered judiciary system (Russia, Ukraine, Moldova, to some extent Albania, certainly Belarus, and until recently Serbia).5 In this respect,we have to considerthe importanceof political-cultural traditions in the shapingof the new democraticcommunities:someof thesecountrieshavemoreof a usable liberal-constitutionalpast than others. In understandingthe role played by civil society in the democratictransitions,we have to take into accountthe role of historical legacies,pre-communistand communistas well. Whatever the self-idealisingrhetoric of local cultural elites may claim, thesesocieties havea long recordof illiberal, anti-modem,often xenophobicandexclusive behaviour.6 In otherwords, the appealsto a pre-communistCentralEuropean identity that would presumablybe basedon tolerance,civility and trust, as opposedto the collectivistic-authoritarianmodel imposed by Sovietism, tendsto neglectthe heterogeneous natureof thesepolitical cultures,in which democraticand non-democratic,pro-Westernand anti-Western,modemand traditionalistvaluesanddiscourseshavelong competedwith eachother.7 The important thing, however, is the general liberal trend in Europeanand internationalaffairs, and the disreputeof oppressiveand repressiveforms of political organisation. No less significant, the globalisation of civic networks, including those committed to the defenceof human rights, has beena favourableelementduring the transitions.s While there are many disturbing factors in post-communistpolitics, including a declineof moral standardsand a demobilisationof civil society, thereis no reasonto declarethe failure of the democratictransitions.At the same time, we should avoid the temptation of liberal triumphalism and admit that the situation in the post-CommunistEast-CentralEuropeis still fluid, and while the democratic forces, at least in Central Europe, have prevailed, it is not certain that neW fundamentalisms(militaristic, fascist, ultra-clericalist,and so on) will not try to subvertthe pluralist arrangements. After all, the democratic institutions (especially the party system and widespreadcorruption) haverecentlybeenunderattackin WesternEurope as well, anti-immigrationactions have intensified, and populist politicians such as JOrg Haider or certain membersof Silvio Berlusconi'scoalition have successfullycampaignedusing xenophobicrhetoric.9 Suchforces can capitaliseon political and social anxieties,especially among those strata that experience transitions, acceptanceof European Union norms and regulations,and cultural globalisation,as a traumatic loss of identity and status.Furthermore,as somecountrieswill join the EU earlier than others, popUlist ethnocentrismwill play on feelings of abandonment,rejection and

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humiliation among the 'forgotten' nations. Europeanenlargementshould therefore be a process that ought not to allow for any marginalisation ('essentialisation')of one part of EasternEurope as inherently backward, dominatedby irrational passionsand irretrievably tribalistic. Moreover, even amongthosewho will be the first to 'join the club', the discussion is not closed regarding the nature of political and national community:will PolandandHungaryacceptmulticulturalismas a foundation of their new identity, or will they rather favour an Austrian-stylemodel of ethno-culturalhomogeneityandby implication rejectionof the other?Evenif we think of the CzechRepublic,often seenasoneof the mostsuccessfulcases of democratictransition, there are quite a few alarming trends: for instance, the Zeman minority governmenthas stayedin power with former premier Vaclav Klaus's party support, in exchangefor not looking into the latter's recordof corruption;severalyearsago, when the CzechPhilharmonichired a conductor from Hamburg, he was fired for being German and thus presumablylacking a 'Czech'soul for 'Czech'music; andthe notoriouswalls and violence againstRoma as meansto 'solve the Gypsy problem'. In the samevein, though the Baltic stateshave often beenpresentedas models of non-violent,civic-driven democratictransitions,their 'singingrevolution' has recently gone sour during the feud between Lithuania and Latvia over ownershipof folk songs.As a journalist put it: 'Inter-Baltic cooperationwas meantto be a rehearsalfor EU and NATO membership.But if the Balts can't sing togetherin their own little trio, thenhow they will managewhentheyjoin the big choirs?'10 The debateis going on, and it is much too early to advance any forecastaboutits conclusions.For reasonswhich are both psychological and cultural, many politicians and intellectualsin East-CentralEuropehave reservationsabout the supranational,cosmopolitan,globalisedvision of the EuropeanUnion and shareFrenchPremierLionel Jospin'soppositionto the Germanproposalfor a radical reduction of national sovereignty: 'I want a Europe,but I remainattachedto my nation',saidJospin,who added,'making Europewithout unmakingFrance,or any otherEuropeannation - that is my political choice.'11 The Milosevic-style expansionistchauvinism has not been emulated outsidethe bordersof the former Yugoslavia,althoughsimilar outburstsof hatred and intolerance have accompaniedthe breakdown of the Soviet Union, especiallyin the Caucasus.In much of the post-communistworld, the landscapeis one of disenchantment,uncertainty and cynicism. The initial times of post-communisteuphoria are obviously over, and this applies also to the more advancedstatesin terms of democraticcapitalist reforms. However, the post-revolutionarydiscomfiture is more intensely

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felt in South-EasternEurope,where democratictransitionshavebeenslow and half-hearted, therefore allowing for the rise of new collectivisms, marginalisationof the former heroes and, more recently, return of the former communists.Romania'selections in 2000 offer a clear example: Corneliu Vadim Tudor, the former court-poetof the Ceau~escu regime, and his 'Greater Romania Party' became a major voice of the opposition. Ironically, Ion Iliescu, the former apparatchik who succeededNicolae Ceau~escu in December 1989, appearedto many in the country as the guarantorof democracyand civic rights.'2 Adam Michnik's term for this general trend is 'the velvet restoration'.13 The term 'velvet counterrevolution' is proposed to indicate the direction of this phenomenon, especiallyin the rise of stronganti-intellectualand illiberal trends.'4 The searchfor new political myths is simply more visible in the East, where all social contrastsare exacerbatedand where the individual senses these tragic breakdowns of old identities with more acuity (Katherine Verdery writes aboutan ongoingcosmicre-ordering).'5But the phenomenon is worldwide: the return of myth is part of the universaluneasinesswith the cold, calculated, zweckmiissigrationality of the iron cage: prophets and demagogues(often the samepersons)do have audiencesin the Eastas well as in the West. The latter is, however,betterprotected:institutionsfunction impersonally,proceduresare deeply embeddedin the civic cultures.In the post-communistworld they are only incipient. This study looks into these uncertaintiesand the psycho-ideologicalresponsesto them: they may be consideredfantasiesin that they give a wishful image of reality, rooted in imagination, approximation and magic thinking. Things are of course extremely complex: there is indeed a feeling of exhaustion,of too much rhetoric,a sentimentthat politiciansaretheresimply for cheating.Corruption seemsto be universal,and mostof thesesocietiesarecloserto Latin America (or SouthernEurope)than to any Anglo-Saxonmodel of pluralism. On the otherhand,it is preciselythis exhaustionof traditionalworldviews,this postmodem syndrome of repudiation of grandioseteleological constructsin favour of mini-discourses,that is conducive to ennui and yearning for alternativevisions which would not be scaredof boldnessandinventiveness. This is a secularisedworld, but the profane substitutesfor traditional mythologies still have a future. Fascismas a phenomenonis not simply linked to onepersonalityor the specificconditionsin Italy or Germanyin the 1920s and 1930s: its roots are to be found in the readinessof desperate massesto follow highly self-confidentindividuals. After the extinct period of 'legitimation from the top' (through ideological rituals of simulated participation, mobilisation and

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regimentation),it seems that in most of these countries nascent, legalprocedural legitimation is paralleled (or countered) by something that, echoing Eric Hobsbawm'sinsightful analysis of the new discoursesof hatred,could be called legitimationfrom the past.16 The more inchoateand nebulous this past, the more aggressive, feverish and intolerant the proponentsof the neo-romanticmythologies.The following myths are the ideological foundation, the intellectual cement that tends to become prevalentin thesesocieties:redemptive,vindictive, scapegoatingand neoutopian.17 This study usesthe term 'myth' in the broadestsense,indicating the world of fantasies, illusions, expectationsand yearnings, rooted in anguish, doubt and uncertainty, and often rationalised as political messianismand other radical discourses.The rise of nationalism as a compensationfor perceivedfailure and externally imposedmarginality, as flight from the complexities of modernity into the politics of collective salvation,is linked to this ambiguousLeninist legacyof distortedmodernity and dictated human needs,and to the pre-Leninistethnic-orientedcultural forms in the region. In other words, the discomfiture with democratic challengesandthe prevailingconstitutionalpluralist modelis not only linked to the transitionfrom Leninism,but to the largerproblemof legitimationand the existence of competing visions of common good, as well as the coalescenceof movementsand partiesarounddifferent and frequently rival symbolsof collective identity. To put it simply, the post-communistwave of primordial passionsand the appealsof the new exclusionarydiscourses remindus that neitherthe premisesnor the outcomesof modernityhavebeen universally accepted.This point was raised by S.N. Eisenstadtin a pathbreakinganalysisof the revolutionsof 1989: Theseproblems,however,do not simply arise out of the breakdown of "traditional" empires, the transition from some "pre-modem"to fully modem,democraticsociety, or from a distortedmodernity to a relatively tranquil stagewhich may well signal somekind of "end of history." The explicit and/orlatentcultural tensionsevidentin Eastern Europe today bear witness to some of the problems and tensions inherentin modernity itself, attestingto the potential fragility of the whole project of modernity.18 For this very reason,then, one cannotseethe Easternpart of Europeas the only candidatefor embracingthese ethnocentricfollies. We deal with a resilient, persistentform of barbarismthat, again, is situatedin the very heart of modernity. Radical nationalism is the absolute exacerbationof difference,its reification, the rejection of the claim to a commonhumanity

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andthe proclamationof the ethno-nationaldistinction as the primordial fact of humanexistence.19 The following sectionsintroduce and briefly examine nine threats to fledging democracies.There are, of course,many other threats,including external ones, that have been ignored. The purposeis to show why, in achievingthe overthrowof Sovietism,many (but not all) of the countriesin EasternEurope and the former Soviet Union have not achievedliberal democracy or political stability. While arguments can be made that democratic stability cannot happen without massiveinflows of Western economicaid, a lack of capital is not the determiningfactor in the region's future.2o As Haider'sparty advancesin the Austrian electionsdemonstrate, a nation's wealth is no guarantee of its citizens' liberal-democratic sensibilities.Thereare severalcomplexinternalfactorsthat makethe fall of communismin Eastern Europe an uncomfortablevictory and they will certainlyaffect the emergenceof unitedEuropeas a political, economicand cultural entity. In identifying them, it is not arguedthat they will pre-empt thesecountries'accessinto the Union, but ratherthat they can delay and/or distort this process. NINE THREATS

1. The Leninist Debris or Waiting for Peron

Of all the authorswho acclaimedthe breakdownof communismin Eastern Europe,Ralf Dahrendorfhas turnedout to havebeenthe most prescientin pointing to the many perils marking the road to an open society,especially in the light of the not-so-solid, that is, quite problematic, personalistic, individualistic and democratictraditions in the region.21 After all, it was Karl Marx who so clearly indicatedthat any new society will carry for a long time its birthmarks, in this case the habits, mores, visions and mentalities(forma mentis)associatedwith the Leninist faith. At first glance, democratic institutions have emerged, democratic electionshave beenheld, and the maledictioncalled 'Balkanisation'so far hasplaguedonly ex-Yugoslavia,but looms largein areasof the former Soviet Union. Furthermore,as KarenDawishahasargued,'electocracies'shouldnot be automatically regarded as liberal democratic communities.22 Thus, in reality, constitutionalismremainsmarredby its very universalisticformalism (its coldness,and its often decriedtediousness)and the subsequentfailure to adjust to pressuresresulting from collective efforts aimed at reverting, subvertingand obliteratingthe project of modernity (by which is tentatively understood the substantive construction of politics in anti-absolutist,

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individualistic and contractualway). In many of thesecountries,reasserted presidentialism,indigenism, dirigism and statism are reminiscentof Latin American (Peronista-style)experimentsin corporatism and authoritarian party hegemonism.23Corporatism,after all, has had a long tradition in the region. Mihail Manoilescu, a Romanianeconomist,was among the most influential theorists of revolutionary-nationalistcorporatism. Such ideas seem to come back with vengeancein the discourse of fundamentalist populistsof variousstripes(extremeleft or right). Their appeal,like fascism's in the 1930s,is linked to their ability to 'combineresentfulnationalismwith a plausible theory of economic development that emphasised authoritarianism,massmobilisation of the population, and the retention of supposedlytraditional, pure, non-westernvalues'.24But the 'return of the repressed',real and often disturbing, does not exhaustthe picture. Indeed, with all the predicamentsand setbacks,the spiritual situation in Europe(and in Eastern Europe in particular) remains fundamental for the attempted reinventionofpolitics.25 The point hereis to highlight the uncertaintiesof this political drama,the possiblefractures,delusionsandordeals,but alsothe still untestedfreedomsand new forms of humansolidarity.26 Concurrently,the Leninist declinehasled to a generalbreakdownof the establishedframework of political arrangements,compromises,mutual coveragesand accepted'rules of the game' in the West as well. In this respect,the rise of Jorg Haider'sFreedomParty is a responseto deep-seated discontentwith the corrupt status quo rather than a mere expressionof residualfascist nostalgia.27 Foreseeingthesenew wavesof rage, Gianni De Michelis (Italy's foreign minister until 1992) wrote in 1993 that the Perot phenomenonin the US was like an overall revolt againstconventionalparty politics (in Italy and elsewhere).The current crisis transcendsthe simple 'sweepingaway of the scoundrels'andbearsupona genuinepolitical 'great transformation':'we are witnessingthe explosionof a long-obsoletemodel of liberal democracy that can no longer accommodateour dynamic, complex societieswith their sophisticatedelectoratesof vast diversity and highly differentiatedinterests.'28It is thus temptingto assumethat the major difficulties in the articulation of ideologically differentiated political platforms in Eastern Europeare connectednot only to the absenceand/or weaknessof clear-cut interest groups and lobbies, but also to increasing atrophy of the Western sources of inspiration ('models') for such endeavours.The famouslaw of political synchronisation(of the Eastto the West) may this time play againstthe revival of ideologicalpolitics.z9 The growing political appealsand usesof myths and the omnipresent selective memory (and forgetfulness) have led to the resurrection of

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historical phantoms (for example, Horthy in Hungary, Codreanu and Antonescuin Romania, Mgr. Tiso in Slovakia, Ante Paveli6 in Croatia). Obsessiveself-pity and the absenceof empathy,the inability to mourn with the othersand to understandtheir plight, is indicative of a generalcollective self-centrednessthat erects fences around the in-group and elaborated, manufacturedinhibiting images about the 'Other'. In Michael Ignatieff's terms,this is a latter-dayexpressionof what Freudcalled the 'narcissismof minor differences'. But, once again, is this phenomenonuniquely East European?Are not these new (or not so new) fantasies part of a more widespreadneedto redefineidentity and authority in a post-Leninistworld? Are not the outcomesof the 1994 and 2001 electionsin Italy as disturbing as the populist, potentially fascist revival in the East?Daniel Chirot argues that the absenceof legitimising signals from the West, the presumed reconciliationbetweenWesternintelligentsiaandliberalismwould diminish the chancesfor the Easternneo-fundamentaliststo really enjoy a second life. 3O But this seemsto havebeenutterly revisedby the Austrian, Swissand Norwegian new waves of xenophobic populism. In other words, ethnocentricradicalismstill has a future in Europe(and not only there).31 In the East,the landscapeis, of course,utterly puzzling and evanescent. The achievementscannot be simply dismissed:during the last ten years, East-Central European societies have evolved from authoritarian, ideologically monistic, extremely centralisedand bureaucraticallycorrupt regimes towardsdemocraticforms of political and economicorganisation. To focus exclusively on their difficulties during the transition period is to miss the drama of social and political experimentationin that region. To deny these dangers is on the other hand myopic and in the long run disastrous. Furthermore, what is at stake is the validity and the very possibility of the liberal democraticparadigmin traditionally authoritarian societies.What do Mill and Tocqueville have to say to the denizensof the post-Leninistworld? Second,we have to assessthe meaningof the great transformationsunleashedby the cataclysmiceventsof 1989: are the newly awakened societies propitious to pluralism, or may the upper hand eventually belong to illiberal, anti-modern demagogues?Can the revolutionary promises, that at least during the first stage were predominantlycivic and 'cosmopolitan',be, to useBruce Ackerman'sterm, constitutionalised?32 What are the chancesfor thesecountriesto build up a constitution of liberty, to rid themselvesof their legacies of autarchy, obscurantism, 'tribalism' and resentments,and safeguard the recently acquiredareasof autonomy?33Formulatedin this way, the issuebearsupon the future of the region, of Europeand internationalsecurity.34

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2. The Power ofMagic Thinking

Intellectual stupor, moral disarrayand yearningfor the 'magic saviour' are symptoms of the post-communist culture of disillusionment. The ideologicalextinction of Leninist formationsleft behinda cultural chaosin which syncreticconstructsemergethat draw from the pre-communistand communist authoritarian, often irrational, heritage. We deal with a of political commitmentsand affiliations, or bettersaid with shapelessness the breakdownof a political culture (that LeszekKolakowski and Martin Malia correctly identified as Sovietism)and the painful birth of a new one. The moral identity of the individuals has beenshatteredby the dissolution of all the establishedvaluesand 'icons'.Thereareimmensecontinuity gaps in both socialandpersonalmemory.Thereis very little public trust andonly a vague recognitionof the need for a sharedvision of the public good. Individuals areeagerto abandontheir newly acquired sense of autonomyon behalf of different forms of protective, pseudo-salvationistgroups and movements.Vaclav Havel emphasisedthis peril when he wrote: In a situationwhen one systemhas collapsedand a new one doesnot yet exist, many people feel empty and frustrated. This condition is fertile groundfor radicalismof all kinds, for the hunt for scapegoats, and for the need to hide behind the anonymity of a group, be it socially or ethnically based.35 Assumedresponsibilityfor personalactions, risk taking and questioningof institutions on the base of legitimate claims for improvement are still embryonic.36 Leninist regimeskept their subjectsignorant of the real functioning of the political system. The chasm between the official rhetoric and the everydayreality, the camouflagingof the way decisionswere reached,the anti-elective pseudo-electionsand other rituals of conformity neutralised critical facultiesandgenerateda widespreadscepticismaboutthe validity of politics as such. Add to this that anti-communismtendedto be just another supra-individual,non-differentiatedform of identity. The problem now is that the aggregationof social interestsneedsa clarification of the political choices,including an awarenessof the main values individuals do indeed advocate.Is after all Vaclav Klaus the conservativeeconomisthe pretends to be?As Martin Paloushasnoted: 'The mostimportantand most dynamic factor in post-totalitarianpolitics has to do with the way people in postcommunist societies perceive and conceptualisethe social reality and political processesthey are a part of.'37 The difficulties and ambiguitiesof the left-right polarisation in post-communistregimes are linked to the

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ambiguity andevenobsolescence of the traditional taxonomies:Marxism or Leninism ceasedto be exhilaratingideologicalprojects,and the references to the 'Left' (in its radical version,at least)are ratheropportunisticgestures than expressionsof genuinecommitment.As Adam Michnik once put it: 'The issueis not whetherone is left or right of center,but West of center.'38 Liberal values are thus seenby some as left-oriented simply because they emphasisesecularism, tolerance and individual rights as against different varietiesof radicalism(including 'civic' or 'ethical' clericalismor even theocratic fundamentalism).At the same time, as shown by new radical-authoritariantrends (often disguisedas pro-democratic)in Russia, Ukraine, Bulgaria, Romania, Slovakia, and so on, lingering reflexes and habits inherited from Leninist and pre-Leninistauthoritarianismscontinue to exist: intolerance,exclusiveness,rejection of any compromises,extreme personalisationof the political discourseand the searchfor charismatic leadership.TheseLeninist psychologicalleftovers can be detectedat both endsof the political spectrum(the 'right' andthe 'left') andthis explainsthe rise of the new alliancesbetweentraditionally incompatibleformationsand movements. In Russia, this takes the form of the Stalino-nationalist coalition, with its own tradition of national-Bolshevism. Political corruption,economicfrustrationsandcultural despairarethe ingredientsfor the rise of anomic mass phenomenaof panic, millennial expectations, pseudo-chiliasmsand sectarianmagic - as for instancecould be seenin the pyramid scamsin Albania and Romania. 3. Remembrance of ThingsNot Quite Past or Nonexistent

Less paradoxicallythan at first glance,there is a growing nostalgiafor the old regime and the revival of 'reactionaryrhetoric'.39 One should seriously examinethe fallacy of a discussionin terms of neo-communism:for sucha developmentto take place, ideological zeal and utopian-eschatological motivation are needed.Snegur,Brazauskas,Zyuganov,Iliescu, Meciar and Milosevic are not simply neo-communists. Obviously, there are fundamental distinctions between truly reconstructedex-communists (Alliance of Democratic Left in Poland, Hungarian Socialist Party) and hard-core Leninist nostalgics (Communist Party of Bohemia and Moravia).40 Between recantation and impersonation, the successor formationsto the Leninist partieshaveto copewith a widespreadsentiment of disaffectionwith traditional socialistrhetoric.41 The casesof the Serbian socialists and Comeliu Vadim Tudor's 'Greater Romania party' are emblematicfor the current trend toward the co-operationbetweenradical nationalist forces and nostalgics of bureaucratic collectivism. The

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foundationof this trend is the ideologicalvacuumcreatedby the collapseof statesocialism,with populismbeingthe mostconvenientandfrequentlythe most appealing ersatz ideology. And populism is neither left, nor right. Uprootedness,status loss and identity uncertaintiesare fertile ground for paranoid visions of conspiracy and treason: hence, the nationalist salvationism as a substitute for what Freud described as the 'oceanic sentiment'.Simply marching with Stalin's portrait is not an expressionof Stalinism, but rather one of disaffection with the statusquo, perceivedas chaotic, anarchic, corrupt, politically decadent and morally decrepit. Especially in Russia,where this disaffection (desencanto)is linked to the sentimentof imperial loss, the cultural despaircan lead to dictatorial trends. Exaggeratedas they may be, referencesto 'Weimar Russia' capture the psychology of large human contingents whose traditional set of collectivistic valueshas dissipatedand who cannotrecognisethemselvesin the often contradictory new ones based on individual action, risk and intensecompetition. Similar trends exist in Bulgaria, Polandand Hungary (for example,Istvan Csurka's'HungarianLife and JusticeParty').42 4. Protean Politics: Fluidity of Political Formations With a private sectorand entrepreneurialclassstill in the making, political liberalism and the civic culture associatedwith it are under attack from different directions: nationalist, neo-Leninist, clericalist, anti-modern traditionalistsand authoritarianpro-big businesspopulists.43 Political parties in most of these countries are coalitions of personaland group affinities ratherthan collective efforts basedon the commonawarenessof short-and long-terminterests:hencefragmentation,divisiveness,political convulsions and instability.44 One reason for the rise of populist, potentially fundamentalistmovementsis the presenceof the paternalistictemptation, the needfor protectionagainstthe destabilising effectsof the transition to marketand competition.Anothersignificantfactor is the perceptionthat the civic-romantic stage of the revolution is over and that currently the bureaucracyis intent upon consolidatingits privileges.One also noticesthe transformation of initially self-described liberal formations into conservative,big businessfriendly, often authoritarian-populistones (see the caseof Hungary'sFIDESZ and its leader,Viktor Orban). 5. Tyranny of the Majority Political reform in all thesepost-communistsocietieshasnot gonefar enough in creating and safely protecting the counter-majoritarianinstitutions (independentmedia, marketeconomy,political parties) that would diminish

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the threat of new authoritarianexperimentscatering to the subliminal, but 45 The main dangersarethe formulae powerful egalitarian-populistsentiments. linked to statism, clericalism, religious fundamentalism,ethnocentrismand militaristic fascism.Thesethemesappearclearly in the discourseof the ethnoreligious fundamentalismin countrieslike Romania,Serbiaand Russia.46 The key questionthereforeis linked to the risks for further political fragmentation (,Balkanisation') in the region, with the more developedcases (Poland, Hungary, Baltic states, the Czech Republic) developing a culture of impersonal democratic procedures(a genuine civic culture), whereas the Southern tier becomes increasingly beset by what Jowitt refers to as movementsof rage.47 Herethe role of Euro-Atlanticinstitutionsis paramount: South-EastEuropeancountriesneedto be integratedin various international structuresthat would encouragethe democratictrendsanddeprivethe illiberal forcesof their political andsymbolic ammunition('the Westdespisesus', 'we truly do not belongto the West' and so on). Passiveattitudesandindifference of Western powers to political and economic developmentsin the less successful part of post-communistEurope can result in the failure of precariousbut nonethelessreal pluralist experiments.

6. A Crisis of Values,Authority and Accountability The weaknessof the political partiesis primarily determinedby the general crisis of values and authority and the no less widespread scepticism regardinga culture of deliberation.Thereis a needfor 'socialglue' and the existing formations have failed to imagine such ingredients for the consensusneededin order to generate'constitutionalpatriotism'. Instead, thereis the feeling of a 'betrayalof the politicians' and a questfor 'the new purity'. What is the meaning of the left-right dichotomy when the excommunistsoften carry out programmesas inclementfor their supportersas the execratedfree marketeers?In the words of a disaffectedPolish citizen: 'I votedfor the communists,but they cheatedandlied to us. It's much worse under the former communists than it ever was under the center-right governments. '48 We deal with the sameimpotentfury againstthe failure of the stateto behaveas a 'good father', part of a patrimonial legacy that is characteristic,to different degrees,of all thesesocieties(less so perhapsin Bohemia). Peter Reddaway labelled this a yeaming for the state as a 'nanny'.49 For instance, it is not for Ceau~escu that Romanians are expressingtheir regrets,but rather for the age of predictability and frozen stability, when the party-statewas taking care of everything.For many, the jump into freedom has turned out to be excruciatingly painful. What has disappearedis the certaintyaboutthe limits of the permissible,the petrified

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social ceremonieswhen the individual anticipatedexactly his or her life itinerary. The former prisonersare now free to choosebetweenalternative futures, and this choiceis difficult for many of them. 7. No Peacewithout Justice

The ideological syncretism of 'Stalino-fascism' ('red-brown') has capitalisedon the delays in the exerciseof political justice. In reality, the momentfor suchan approachwas universallymissed,evenat the level of a genuinehistorical debate.50 In Russia,the much ado about the 'trial of the old party' hasnot resultedin anythingsignificant,besidethe initial perverse effect of Vladimir Zhirinovsky's collecting the votes of the banned Leninists and later the rise of Gennady Zyuganov's national Bolshevik Communist Party of the Russian Federation - Zyuganov's national Bolshevism.Demagogy,overblown rhetoric, the continuousindulgencein scapegoating,as well as fictitious boundaries between 'martyrs' and 'criminals' underminethe legitimacy of the existing institutions and allow the rise of ethnocentrism.This repressionof a public discussionis boundto fuel discontentandfrustrations,thusencouragingyet moredemagogues and mafiosi.51 Insteadof lucid analysesof the past,new mythologiesare created to explain the current predicament:foreign conspiracies,the 'endangered national interest', and vindictive referencesto the need for 'purification throughretribution'. 8. The Fragility of the Political Class

Delaysin the coalescence of a political classare linked to the weaknessof a democraticcore-elite:political valuesremain still very vague,programmes tend to overlapandcorruptionis rampant.Think of the shortlife expectancy of most political partiesin the region. In fact, most of the partiesthat were dominantin the first five years after the collapsehave either lost electoral significance(for example,Hungary'sMagyar DemocraticForum, or, after the elections in November 2000, the National PeasantChristian and DemocraticParty,oncethe pillar of Romania'santi-communistcoalition), or significantly altered their orientationsand allegiances(such as FIDESZ). This is particularly dangerousin Russia where there is a conspicuous absenceof political competitionbetweenideologically defined and distinct parties (after all, Vladimir Putin's background says nothing about his preferencesfor one or anotherRussianpolitical party). In Peronista-style politics, Putin (but also otherpost-communistleaders)can migrate fromone to anotherpolitical formation in termsfor electoralneedsratherthanbecause of genuineideologicalaffinities.

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9. The Individualistic versusCommunitarianValuesSplit

The political spaceis still extremely volatile, and the ideological labels conceal at least as much as they reveal. The urgent choice is between personalities, parties and movements that favour individualism, open society, risk-taking, as against those who promise security within the homogenous(and mythological) environment of the ethnic community. Politically, the most important sectorsto be reformedare the legal and the military ones:as long as propertyrights are not fully guaranteed,economic reforms cannotreally succeed.Strategyis as important as tactics, and the will to reform is as important as the articulation of concretegoals. The conflict takes place between the advocates of the homogenising (mythologically institutedand constructed)nation/state,aiming to createan ethnically pure community, and thosewho believein the right to diversity, the right to think and act differently. CONCLUSION

Post-communistdemocratic transitions have ushered in an ambivalent situation:on the onehand,a stateof confusionanduncertainty;on the other, a strong needto be acceptedinto the 'club' and redesignthe contoursof what we call Europe. As noted above, some countries have managedto construct credible liberal institutions and viable markets. Others, and arguably most, have not transcendedtheir historical legacies:democratic forms (institutions, discourses,practices)have emerged,but they are still perfunctory. This is not a cultural deterministic argument, but rather a recognition of the enduring power of symbolic, political and moral traditions, as well as an admissionof the fact that so far the West has not made the great economicefforts that could speedup the growth of local middle classesand with them the consolidationof liberal values (think of the gigantic supportfor Greece,Portugaland Spainin the late 1970s).52 East Europeanpolitical culturesremain thus heavily indebtedto the ideological age: symbols, myths, rationalised miracles, liturgist nationalisms and teleological pretencehave developedafter the short-lived 'post-modern' interludeof the revolutionsof 1989.And with them,the politics of emotion, unreason,hostility, angerand unavowed,unbearableshame.This is indeed the politics of rancorous marginality, 'cultural despair' and convulsive impotencethat the nascentdemocratic(dis)order can barely contain. The fate of Yugoslavia thus tells much about the infinite capacity of elites in thesesocietiesto reinventtheir pastfallaciesandrestorethemto the rank of new national religions in the attemptto maintain and expandtheir hold on

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power. As Slovenesocial philosopherSlavoj Zizek argues,the issueis who and underwhat circumstanceswill be acceptedas part of the 'West': 'what is at stakein contemporarypost-socialiststatesis the strugglefor one'sown place: who will be admitted- integratedinto the developedcapitalistorder - and who will be excludedp3 It is thereforebetterto look into the real pitfalls and avoid them, rather than simply fall back on the comforting notion of an 'ultimate liberal triumph'. Indeed,what we deal with is both the gains,but also the fragility and vulnerabilityof liberalism in the region; the backwardness,delaysand distortions of modernity, and the rise of majoritarian, neo-plebiscitarian 54 Against this background,one can easily imagine parties and movements. the adventof political demagogueswhoseunique loyalty would be to their own luck, glory and power. The versatility and free convertibility of political beliefs can assureindividual fame and power, but it can never constructlegitimateinstitutions and civic virtues. The good newsis that the ongoingtransitionstake placesimultaneously with the reinventionof Europe,and that the ideal of a united Europeis one of the mostcontagiousand magneticmodelsthesecountrieshaveeverdealt with. At the sametime, one does not needto be a Euroscepticin order to agreewith the following realistic assessment: If Europeis to work, if EasternEuropeand Russiaare to be brought

into the modemworld, if Germanyis to remainintegratedasa peaceful and harmoniouspart of Europe,then somethingmore than the mere repetition of a few stock phrases- privatisation,democratisation,let marketswork, abandoninefficient industries- will be required.What will be needed,as Havel wrote recently, is faith in the morality of the original Westernliberal ideal. ... If WesternEuropeas a whole does not join in a great and self-confidenteffort to ensurethe triumph of liberal valuesand policies, then Europewill not work.55 As it entersthe twenty-first century,Europefinds itself at a crossroads:after many decades of division, fragmentation, bloody ethnic, civil and ideological wars, the continent has finally the chanceto overcomethese troubling legaciesand move in the direction of peacefulco-operationand integration. Resurrecting the demons of the past and engaging in the destructivelyvenomouspolitics of ethnic or religious feuds could destroy thesepromisingprospects.More than ever, it is up to the political elites and the civic forces of both the emergingandconsolidateddemocraciesto stand up againstpopulistforcesanddefendthe valuesthat inspiredthe revolutions of 1989: freedom,dignity and a united Europeandestiny.

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NOTES A draft of this paperwas initially presentedat the sessionon 'Nation, Democracy,and the State', of the Reflection Group on 'Diversity and Unity in the Enlarged European Union: What Influences the Processof Transition and Adaptation in Central and EasternEurope', jointly organisedby the Robert SchumanCenter. EuropeanUniversity Institute, Florence, and the ForwardStudiesUnit, EuropeanCommission,Brussels,1-2 March 2001. The authoris grateful to the membersof the Reflection Group for extremely thoughtful and stimulating suggestions. Special thanks to ProfessorJudy Batt, University of Birmingham, UK, for her excellent comments.ProfessorIlya Prizel, University of Pittsburgh,kindly readthe revisedversion of the text and madehelpful suggestions.I completedthe text during my stay as a Public Policy Scholar at the Woodrow Wilson InternationalCenterfor Scholarsin Washington,DC, in the summerof 2001. Specialthanksto my assistantLuke Murry for researchand editorial help. I. SeeJanUrban, 'Europe'sDarkestScenario',WashingtonPost,Outlook Section,II Oct. 1992, pp.I-2; G.M. Tamas 'Post-Fascism',East European Constitutional Review 9/3 (Summer 2(00), pp.48-S6;G.M. Tamas,'Victory Defeated',Journal of Democracy10/1 (Jan. 1999), pp.63-8. For a less pessimisticapproachto the legaciesof 1989, seeVladimir Tismaneanu, 'Reassessing the Revolutionsof 1989',Journal ofDemocracy1011 (Jan. 1999),pp.69-73. 2. SeeJohn Tagliabue, 'On Top in Bulgaria: New Premieris the Old King', New York Times, IS July 2001,p.A4. 3. In the apt wordsof RogerCohen,oneof the bestobserversofthe emergingtrendsin the postCold War Europeanpolitical and cultural landscape,'the journey from Bosnia to Berlin to The Hague is an educationin how tired Europe really is of war, tired of the trampling of peopleand their displacement,perhapstired altogetherafter the havoc of the last 100 years. If this weary continentis now able to musteran aim, an idea, a vision, it is to put an end to conflict, division and ethnic oppressionon its soil'. See Roger Cohen, 'From Bosnia to Berlin to The Hague: On a Road to a Continent'sFuture', New York Times, IS July 2001, 'Week in Review' section,p.7. 4. In this respect,the Polish soul-searchingdiscussionon the Jedwabnemassacrein July 1941, and the readinessof the top political elite to admit responsibilityfor that tragic momentin the history of Polish-Jewishrelations, suggestthat a democraticenvironmentis a premise for a much-neededdemystificationof the past. SeeIan Fisher, 'At Site of Massacre,Polish Leader Asks Jews for Forgiveness',New York Times, 11 July 2001, p.Al and A4. Not everybody in Poland has been so forthcoming as PresidentAleksanderKwasniewski in recognisingcollective responsibility(not collective guilt). High-level figures of the Catholic clergy have spelled out positions reminiscentof the old anti-Semitic 'Judeo-Communist' stereotype.As a whole, however, the Polish political and historical discussionlinked to Jedwabnehasbeenstrikingly matureand free of innuendoand prejudice.SeeIstvan Deak's excellentanalysis,'HeroesandVictims', New York ReviewofBooks,31 May 2001,pp.SI-6. S. SeeJacquesRupnik. 'The Post-CommunistDivide', Journal ofDemocracy10/1 (Jan. 1999), pp.S7-62. 6. For the indulgencein a politics of redemptionand the uses of political hysteria in precommunistEast-CentralEurope,seeIstvan Bibo, 'The Distressof the EastEuropeanSmall States', in Democracy, Revolution, Self-Determination:SelectedWritings (Boulder, CO: Social ScienceMonographs,distributedby ColumbiaUniversity Press1991), pp.13-87. 7. The main proponentsof this vision of Central Europe in the 1970s and 1980swere Milan Kundera(on 'The Tragedyof Central Europe')and Gyorgy Konrad (on Antipolitics); both views are discussedin my The Crisis ofMarxist Ideologyin EasternEurope: The Povertyof Utopia (London: Routledge1988). 8. SeeBenjaminR. Barber, 'GlobalismNightmareor Global Civil Society',in Freedomin the World: The Annual Surveyof Political Rights and Civil Liberties, 2000-2001(New York: Freedom House, and New Brunswick, TransactionPublishers2001), pp.17-2S; for the impact of political and cultural past experienceson the post-communisttransitions, see Beverley Crawford and Arend Lijphart (eds.), Liberalization and Leninist Legacies: ComparativePerspectiveson Democratic Transitions (Berkeley: University of California Press1997); on prospectsfor liberalism in the region, with a specialfocus on Poland, see Jerzy Szacki, Liberalism After Communism(Budapest:Central EuropeanUniversity Press 1997).

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9. See Alexander Stille, 'Making Way for Berlusconi',New York Reviewof Books, 21 June 2001, pp.73-4. 10. See Philip Birzulis, 'Out of Tune: Latvia and Lithuania Feud Over Folk Songs',Business Central Europe (July/Aug. 2001), p.41. 11. SeeSuzanneDaley, 'FrenchPremierOpposesGermanPlanfor Europe',New York Times,29 May 2001. 12. See Vladimir Tismaneanuand Gail Kligman, 'Romania'sFirst Post-CommunistDecade: From Iliescu to Iliescu',EastEuropeanConstitutionalReview1011 (Winter 2001),pp.78-85. 13. SeeAdam Michnik, 'The Velvet Restoration',in Vladimir Tismaneanu(ed.), Revolutionsof 1989(London: Routledge1999), pp.244-51. 14. See Vladimir Tismaneanu,Fantasiesof Salvation: Democracy,Nationalism and Myth in Post-CommunistEurope (Princeton,NJ: PrincetonUniversity Press1998). 15. SeeKatherineVerdery, 'What Was Socialismand Why Did It Fall', in Vladimir Tismaneanu (ed.), The Revolutionsof 1989(London and New York: Routledge1999), pp.63-88. 16. See GiuseppeDe Palma, 'Legitimation from the Top to Civil Society: Politico-Cultural Changein EasternEurope', World Politics 4411 (Oct. 1991), pp.49-80; Eric Hobsbawm, 'The New Threatto History', New York Reviewof Books,16 Dec. 1993, pp.62-4. 17. One might say that the real problemabout East-CentralEuropeis the desperatesearchfor and manufactureof ideology rather than ethics. Ironically, the blatant amorality of the Leninist agewas followed by a widespreaddistrustof ethicalvalues,a flight from individual responsibilityand a repudiationof genuinepolitical commitments.Thus, and paradoxically, thosewho are the beneficiariesof the new freedoms(the successfulbusinesspeople)who are politically apathetic. 18. See S.N. Eisenstadt,'The Breakdownof CommunistRegimes',Daedalus 12112 (Spring 1992), p.35, reprintedin Tismaneanu(ed.), The Revolutionsof 1999,pp.89-107. 19. For an excellent discussionon nationalism see Tzvetan Todorov, On Human Diversity: Nationalism, Racism and Exoticism in French Thought (Cambridge, MA: Harvard University Press1993). 20. External support for democratic developmentshas been crucial in the case of Russia, however, and the West's failure to launch a Marshall Plan initiative hamperedthe muchneeded transition from the plundering of the state resources through nomenklatura privatisationinto what GeorgeSoros calls legitimate capitalism. SeeGeorgeSoros, 'Who Lost Russia?',New York Reviewof Books, 13 April 2000, pp.lO--l8. For faltering (failed) transitions,seethe special sectionedited by Kazimierz Poznanski,East EuropeanPolitics and Society1512 (2001). 21. SeeRalf Dahrendorf,Reflectionson the Revolutionin Europe (New York: RandomHouse 1991) and his After 1989: Morals, Revolutions,and Civil Society(New York: St Martin's Press1997). 22. Seethe specialissueof EastEuropeanPolitics and Societies1312 (Spring 1999),especially piecesby ValereieBunce,Daniel Chirot, GrzegorzEkiert, Gail Kligman, KatherineVerdery; and Sorin Antohi and Vladimir Tismaneanu (eds.), Between Past and Future: The Revolutionsof 1989 and Their Aftermath (Budapest:Central EuropeanUniversity Press 2000). 23. Think of former CroatpresidentFranjoTudjman,Romania'sIon Iliescu, or Ukraine'sLeonid Kuchma. For Latin American disillusionmentwith leftist radicalism, seeJorgeCastaneda, Utopia Unarmed: The Latin AmericanLeft After the Cold War (New York: Knopf 1993). 24. See Daniel Chirot, Modem Tyrants: The Power and Prevalenceof Evil in Our Age (New York: Free Press1994), p.251. 25. Julia Kristeva is thus right to insist: 'The problemof the twentiethcentury was and remains the rehabilitation of the political. An impossible task? A uselesstask? Hitler and Stalin pervertedthe project into a deathly totalitarianism.The collapseof communismin Eastern Europe, which calls into question, beyond socialism, the very basis of the democratic governmentsthat stemmedfrom the FrenchRevolution,demandsthat one rethink that basis so that the twenty-first century not be the reactionarydomain of fundamentalism,religious illusions, and ethnic wars.' See Julia Kristeva, Nations Without Nationalism (New York: ColumbiaUniversity Press1993), pp.68-9. 26. For the conceptof uncertainty,see Valerie Bunce and Maria Csanadi,'Uncertainty in the Transition: Post-Communismin Hungary',EastEuropeanPolitics and Societies7/2 (Spring 1993),pp.240--75.

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27. SeeTony Judt, 'Tale From Vienna Woods',New York Reviewof Books47, Issue5, pp.8-9; also Marc Howard'scontributionto the symposiumon 'Post-ColdWar EuropeanPopulism', East EuropeanPolitics and Societies15/1 (Spring 2001). 28. De Michelis quoted in Nathan Gardels, 'From Machiavelli to Zeffirelli', WashingtonPost (Outlook Section),10 April 1994. 29. This 'synchronisation' was the thrust of inter-war Romanian liberal theorist Eugen Lovinescu'sapproachto the country'smodernisation. 30. See Daniel Chirot, 'Liberty or Prelude to New Disasters?The Prospectsfor PostRevolutionaryCentral and EasternEurope',paperpresentedat the conference'Legaciesof the Collapseof Marxism', organisedby the InternationalInstitute,GeorgeMasonUniversity, Fairfax, Virginia, and Institute for European, Russian and Eurasian Studies, George WashingtonUniversity, WashingtonDC, 22-25 March 1992. 31. SeeRoger Griffin (ed.), International Fascism: Theories, Causesand the New Consensus (London: Arnold 1998); and Sabrina Rarnet (ed.), The Radical Right After Communism (University Park: PennStateUniversity Press1999). 32. See Bruce Ackerman, The Future of the Liberal Revolution(New Haven: Yale University Press1992). 33. About tribalism as the barbaric componentlying at the core of modernity, see Hannah Arendt, especiallyin The Origins of Totalitarianism (New York: Meridian Books 1958), and the whole critique of Enlightenmentby Frankfurt School theoristsTheodorW. Adorno and Max Horkheimer - see Wolf Lepenies, 'The Future of Intellectuals', Partisan Review 1 (Winter 1994), pp.1l1-19. This argument is important in the light of the widespread tendency to posit a distinction between the dark, unpredictable,South-EasternEurope, almost inherently irrational and violent, and Central Europe, presumablymore able to articulateand internalisethe discourseof reason. 34. Here we haveto rememberKen Jowitt's appositewarning: 'Liberal capitalistdemocracyhas arouseda heterogeneous set of opponents:Romantic poets,Persianayatollahs,the Roman Catholic Church, and fascists.For all the real and massivedifferencesthat separatethese oppositions,one can detecta sharedcritique. Liberal capitalistdemocracyis scornedfor an inordinate emphasison individual materialism,technical achievement,and rationality ... [and] for undervaluingthe essentialcollective dimension of human existence[and the] humanneedfor security.'SeeKen Jowitt, 'The New World Disorder',Journal ofDemocracy 2/1 (Winter 1991), pp.I6-17, and his New World Disorder: The Leninist Extinction (Berkeleyand Los Angeles:University of California Press1992). 35. SeeViiclav Havel, 'Post-CommunistNightmare',The New York Reviewof Books,27 May 1993,p.8. 36. SeeJohn Rawls' discussionof criteria for assessingcivic freedom and the idea of a wellordered society in Political Liberalism (New York: Columbia University Press 1993), pp.30-40. 37. Martin Palous, 'Post-Totalitarian Politics and European Philosophy', Public Affairs Quarterly 7/2 (April 1993), pp.162-3. 38. Personalinterview with Adam Michnik, Warsaw,May 2000. 39. See Albert Hirschman's analysis of the 'perversity argument' in his The Rhetoric of Reaction:Perversity, Futility, Jeopardy(Cambridge,MA: HarvardUniversity Press,1991). 40. Focusingon Latin America, Jorge Castanedacaptureswell this post-Cold War dilemma: 'The left found itself in a no-win situation.Either it stuck to its guns- which were not really its own, but werefoisted on it - and defendedthe indefensible;a state-run,closed,subsidised economyin a world in which sucha notion seemedtotally obsolete;or it turnedaroundand supportedthe opposite,apparentlymodem,competitive,free-marketcourse.In that caseit endedup imitating - or being assimilatedby - the right and losing its raison d'etre.' See Castaneda,Utopia Unarmed,p.247. 41. For the former communists,seeAndrew Nagorski,The Birth of Freedom:ShapingLivesand Societiesin the New EasternEurope (New York: Simon and Schuster1993), pp.55-91,and GeorgesMink and Jean-ClaudeSzurek,La grandeconversion:Le destindes communistsen Europede ['Est (Partis: Ed. du SeuiI1999). 42. SeelIya Prizel, 'Nationalismin Post-CommunistRussia: From Resignationto Anger', in Antohi and Tismaneanu(eds.),BetweenPast and Future, pp.332-56. 43. For the latter trend, see the transmogrificationof FIDESZ in recent years. The most important point about this new blending of economic liberalism and political .

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authoritarianismis that it jeopardisesthe still precariouspluralist institutions.For an analysis of party evolutions in the region, see Paul G. Lewis, Political Parties in Post-Communist Europe (London and New York: Routledge2000). 44. For the global impact, in terms of norms definition, seeJamesN. Rosenau,Turbulencein World Politics: A Theory of Changeand Continuity (Princeton:PrincetonUniversity Press 1990). 45. SeeAndrew Arato, 'Revolution,RestorationandLegitimization: IdeologicalProblemsof the Transitionfrom StateSocialism',in Michael D. Kennedy(ed.), EnvisioningEasternEurope: Post-CommunistCultural Studies (Ann Arbor: University of Michigan Press 1994), pp.180-246. 46. For the revival of radical right in Romania, see Vladimir Tismaneanuand Dan Pavel, 'Romania'sMystical Revolutionaries:The Generationof Angst and AdventureRevisited', EastEuropeanPolitics and Societies8/3 (Fall 1994),pp.402-38;for the rehabilitationofthe former Iron Guard doctrinaires,seeVladimir Tismaneanu,'The Ecstasyof Nihilism: E.M. Cioran'sTransfiguration',in Edith Kurzweil (ed.), A Partisan Century: Political Writings from Partisan Review(New York: ColumbiaUniversity Press1996), pp.383-92. 47. Jowitt, New World Disorder. 48. See'Poles HoldMarch Over New Budget',New York Times, 10 Feb. 1994. This was one of the many voicesprotestingthe austeritybudgetin February1994 in what turnedout to be the largestanti-governmentdemonstrationsincethe collapseof communism(about30,000).For the cultural and ideologicalconfrontationsin post-communistPoland,seeMarcin Frybesand Patrick Michel, Apres Ie communisme:Mythes et legendesde la Pologne contemporaine (Paris: BayardEditions 1996). 49. SeePeterReddaway,'Russiaon the Brink', The New York Reviewof Books,28 Jan. 1993, pp.30-35.Reddawaynoticesa multi-layeredfeeling of moral and spiritual injury relatedto loss of empire and damagedidentity: 'Emotional wounds as deep as thesetend to breed anger,hatred,self-disgustand aggressiveness. Suchemotionscan only improve the political prospectsfor the nationalistsand neo-communists,at any rate for a time.' Needlessto add, in the meantime,Reddawayhas becomeeven more pessimistic.See PeterReddawayand Dmitri Glinski, The Tragedy of Russia'sReforms:Market BolshevismAgainst Democracy (Washington,DC: US Institute of Peace2001). 50. See Arpad Goncz, 'Breaking the Vicious Circle', CommonKnowledge2/1 (Spring 1993), pp.1-5; see also 'Cette etrangeepoquepostcommuniste:Adam Michnik s'entretientavec Vaclav Havel', in GeorgesMink and Jean-CharlesSzurek, Cet etrangepost-communisme: Ruptureet transition en Europecentraleet orientale (Paris:Pressesdu CNRSlLadecouverte 1992), pp.17-48. 51. The immensepower of these new mafiosi has becomea challengesecondto none to the establishmentof the rule of law in Russia:seeK.S. Karol, 'Moscou sousla loi des gangs', Le Nouvel Observateur (Paris), 17-23 March 1994, pp.36-7, and Steven Handelman, ComradeCriminal: Russia'sNew Mafiya (New Haven: Yale University Press1997). 52. See,for the currentreservationsregardingthe financial burdenof EU Eastwardenlargement, William Drozdiak, 'Another Wall for East Europeans: Admission to EU Faces New Obstaclesas Members Express Concern About Cost', WashingtonPost, 27 May 2001, p.A24; for the connectionbetweeneconomicsand politics in the Europeanenlargement process,see Laurentiu Stefan-Scalat,'Romania-A Litmus Test for EuropeanEastward Enlargement',paper presentedat the conference'Quo Vadis, Europa? The Vision and Frontiers of Europe', organisedby the Institute for EuropeanStudies,Hebrew University, Jerusalem,22-23 April 2001. 53. SeeSlavoj Zizek, 'Ethnic DanseMacabre',The Guardian, 22 Aug. 1992; for the impact of nationalismand ethnic turmoil on the democratictransitions,seeJ.J.Brown, The Groovesof Change: Eastern Europe at the Tum of the Millenium (Durham: Duke University Press 2001). 54. SeeGeorgesMink's distinctionsbetween'partis consensuelists, tribunitiens et querelleurs', in his 'Les partis politiques de l'Europecentralepost-communiste:etat des lieux et essaide typologie', L'europecentrale et orientale en 1992, Documentationfran~aise, pp.21-3. 55. See Daniel Chirot, 'Introduction', in StephenHanson and Wilfried Spohn, Can Europe Work? Germanyand the Reconstructionof Post-CommunistSocieties(Seattle:University of WashingtonPress1995), pp.ll-12.

Making Institutions in Central and Eastern Europe, and the Impact of Europe DARINA MALOV

A and TIM HAUGHTON

The end of communismin Central and EasternEurope offered a unique opportunity for institutional redesign. At the heart of much of the initial institutional changein the region was a desire to build modemdemocratic states,invariably, thoughnot exclusively,following WestEuropeantemplates. Throughoutthe courseof the 1990s,however,a more influential mechanism emergedstimulatinginstitutionalconvergencein CentralandEasternEurope: the EuropeanUnion (EU). The desire of countriesin Central and Eastern Europe(CEE) to join Europe'sbestand wealthiestclub helpedengenderthe replication of Western Europeaninstitutions in CEE, reminiscent of the process of institutional unification which took place in non-Communist Europe after World War Two. The processof institutional convergencein CEE countries has not been encouragedand undertaken to achieve institutional uniformity, rather the aims have been the establishmentof democraticforms of governmentand democracyas the only gamein town, allowing room for institutional diversity within a democraticframework. Even a cursory examinationof constitutionalchangesin Central and EasternEuroperevealsseveralcommonaltiesin overall institutional design. The prevailing institutional model involves parliamentarydemocracy,a proportionalrepresentationelectoralsystem,multiparty systems,coalition governmentsand constitutional review. During the last decade several applicant countries have shifted towards this pattern, even if their constitutions and electoral laws originally provided for some forms of mixed types of government, such as semi-presidentialismand mixed electoralformulae. The adoptionof the West Europeaninstitutional model has been helpful in the process of democratic consolidation in CEE countries by promoting the necessaryvalues and habits such as selflimitation, bargaining,reciprocity and feedback.! After a brief discussionof the EU's membershipcriteria, this study will chart the processof institutional developmentin CEE in the past decade,

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particularly with regardto the separationof powers.Europehas playedan important role in institutional development,although it is wise to bear in mind Helen Wallace'sdistinction between'Europeanisation'(the adoption of West Europeanmodels) and 'EU-isation' (changesdriven by the desire for EU membership).2 The whole gamut of institutional change (incorporatingthe separationof powers,changesin the forms of executive leadership, parliamentary reform, the introduction and modification of electoral systems,judicial review and the developmentof informal rules), however, has also beendriven by other factors such as domesticpolitical concerns. THE REQUIREMENTS FOR THOSE WHO WISH TO JOIN THE CLUB

Before embarkingon an attemptto chart the progressof institutionalisation in CEE countries, it is worth reviewing briefly the EU's membership requirements.To join any club applicants have to demonstratethey are suitablemembers.The EU is no exception.At the CopenhagenEuropean Council in June1993,the EU outlinedthe political criteria for membership. Applicants were required to demonstratethe 'stability of institutions guaranteeingdemocracy,the rule of law, humanrights and respectfor and protectionof minorities'.3The criteria were broadand did not prescribeany particular institutional model. Indeed, given the variety of institutional forms betweendifferent EU memberstatessuch as France,Germanyand the United Kingdom, it would have beendistinctly odd for the EU to have demandedthat applicantnationsconform to a specific institutional model. The EU's criteria therefore provided ample room for institutional variation, allowing CEE countries to establishdemocraticinstitutions in accordancewith their own political traditions and culture. Initially, a range of different formal institutions and political rules emerged,but a decadeon from the revolutions of 1989 many commonalitiesin the generalpolitical set-up among the applicant countries are discernible. Moreover, the key state institutions have come to resemblethose of Western Europe. This process of institutional convergenceis likely to contribute to overall democratisationand stability on the continent, becauseit increases predictability, that is, political actors in CEE are increasinglyexpectedto behaveat the statelevel accordingto the democraticrules of the game.At the sametime, this convergenceprovides sufficient room for institutional diversity at lower levels. The requirementsfor joining the EU in the current decadediffer from previousenlargements,mostnotablythe SouthernEuropeanenlargementof

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the 1980s, becausemembershipclearly dependsnot just on economic factors, but on political conditions which have become explicit requirementsof entry. In the casesof Greece,Portugaland Spain,European Community membershipwas consideredpart of the processof democratic consolidationratherthan a rewardfor achievingconsolidation. MAPPING THE PROCESSOF INSTITUTIONALISATION IN CENTRAL AND EASTERN EUROPE

Although political actorsformulate policies and makedecisions,they do so through institutional frameworks.Political institutions matterbecausethey provide agencywith formative incentivesand disincentivesthat shapeboth the strategiespursuedand the goals achieved.4 Nonetheless,it should be emphasisedthat institutional frameworks are not conjuredout of thin air, they are createdby political actors and are the product of bargainingand negotiation. A major shift in power relations may therefore lead to modifications, changes or even a drastic overhaul of an institutional framework.ThroughoutCentralandEasternEuropein the pastdecadethere has beena decreasein the occurrenceof major institutional change,which has allowed the constitutionalarrangementsto acquire stability and value. What change there has been has resulted in a trend of institutional frameworkconvergenceacrossthe region. In order for a social arrangementto be called an 'institution', two conditionshave to be met. First, institutions play a socialisingrole in that they prescribe desirable and proscribe undesirablebehaviour. In other words, they restrict modesof actions (negativepart) and reward preferable activities (positive part). Second,institutions not only perform the role of 'congruentsocialisation'Sbut they should also function correctly, that is, they should be able to solve problemsthey were createdto cope with. In short, institutions imposeobligationsupon actorsas well as producepolicy outcomes. The initial constitutionmaking processin CEE yielded a wide variety of constitutionalstructures.This diversity was a productof the inputs into the decision making process. Inherited structures, historical experiences, political actors' preferencesduring the transition, deal sweetenersduring the round-tabletalks, a concernfor historical continuity - in Central and EasternEurope'scase,'the Europeaninheritanceof parliamentarism'6- and the pull of the EuropeanUnion all played their part. The output of each constitution making processwas determinedby the differing mix of these ingredientsin CEE countries.The constitution makerswere not operating

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on a tabula rasa, however: constitutionshad existedbefore 1989, even if, undercommunistrule, they were reducedto little more than extensionsof Communist party programmesdesignedto lend a 'veneer of legality to monocraticrule'.7 In framing the institutional structurepoliticians looked to threemodels:the 'distantpast',the modemWest andthe 'accomplishments of the immediatepastof the statesocialistsystem'.8 The largely formal and empty texts of the communisttimes have been replacedwith democraticconstitutionson the Westernmodel. Conceptsat the heartof all democraciessuchas the division of powersandhumanrights were enshrined in these documents. The constitutions establishedthe guiding principlesregulatingthe rules and proceduresthroughwhich actual policy outcomesare reached.Theserules of the gameare enshrinedin the constitutions and invariably require specific procedures such as constitutional assembliesand extraordinary majorities in order to be changed.Although the desireto constructdemocracieswas at the heart of much constitutionmaking in CEE in the early 1990s,it is worth reiterating that these constitutionswere drawn up not by saints, but by politicians driven in part by their own personalpolitical interests.Framersmay have offered impartial argumentsbasedon conceptssuch as the public good, individual rights or democracy,but the motivation may have had much to do with their own self-interestand 'the position in which politicians find themselvesat the time of design'.9As an outcomeof a bargainingprocess, constitutionstherefore 'resemblebundlesof compromisesrather than acts of legal professionalism'. 10 Nevertheless,despite their human frailties political playershave beenable to solve institutional conflicts under valid rules of the game-a sign of their commitmentto democraticprocedure. The Separationof Powers

Many CEE countries began the process of the institutionalisation of democracywith vaguely drafted constitutions.The provisions specifying the separationof powers in particular tended to be ambiguous.II Such ambiguity, allowing varying interpretation,allied with weak checks and balances,was a recipe for outcomesnot conduciveto the consolidationof democraticpolities. Hence,someconstitutions,insteadof being capableof solving political crises,themselvesbecamethe sourceof political conflicts. The position, role and powers of the presidency,for instance,have led to countlesscontroversies.In part this may be a legacy of the communist tradition of (at least nominal) collective leadership.With the exceptionof Czechoslovakiaand Romaniaa single headof statewas, to someextent,an institutional novelty.

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Poland has witnessed significant shifts in the relative positions of president,governmentand parliamentthroughoutthe 1990s.12 With at least half a nod towardsPoland'sinstitutionalhistory, but also an outcomeof the bargainingprocess,the 1989 round table discussionscreateda strong, but indirectly electedpresident.The headof statewas accordedpowersto veto legislation with a two-thirds override requirement for both houses of parliament,to dissolvethe legislature,and gavethe office holder executive control over defenceand foreign policy ministerial appointments.Because of Lech Walesa's desire to increase his power he pushed for a more powerful presidency. Parliament rejected Walesa's constitutional plans which envisageda shift in power in favour of the headof state.In fact the balanceof power shifted in the other direction. Under first the so-called 'Little Constitution' in 1992 and then more significantly the 1997 Constitutionthe powersof the cabinetand the prime minister increasedat the expenseof the president.The presidentretains veto power, but can be overriddenby a majority of three-fifths of MPs, not two-thirds, as in the previous constitution. The presidentialpower to dissolve parliamentwas also curtailed.Slhecan do so only when parliamentfails to enactthe budget within four monthsand when the governmentis unableto form a cabinet. In addition, presidential power over the nomination of ministers was curtailed. Polish constitutional development,therefore, provides a good example of a shift from a hybrid system towards a more clear-cut parliamentarydemocracy.Although Poland ended up with a balanceof power betweenpresident,prime minister and parliamenttypical of many EU members,the causeappearsmore likely to be found in personalitiesand internal political debatesand argumentsthan in any attempt to adopt a Europeanmodel. Slovakia'shastily drafted constitution of 1992 incorporatedcountless vagueandcontradictoryrules. Although mostof the provisionsweretypical of parliamentarydemocracies,several unclear powers, typical of semipresidentialsystems,were vestedin the presidency.Thanks in part to the lack of constitutionalclarity, but also to an almostvisceral hatredbetween the two office holders, President Michal Kovac and Prime Minister Vladimir Meciar, Slovakia experiencedtense relations between prime minister and president in the mid-1990s. In January 1999, the new parliament passedan amendmentto the Constitution, which not only provided for direct electionsof the president,but also limited the headof state'spower. The president,for instance,lost hislherpowerto presideover cabinetmeetingsand to intervenein the processof forming a government, and may imposea veto only on regular laws, not on constitutionallaws -

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that is, laws passedby a three-fifthsmajority in parliament.As in the Polish caseit is hard to arguethat the motivation for theseconstitutionalchanges was exclusively the EU. The constitutionalamendmentpassedin 1999 had more to do with the outcomeof the coalition formation discussionsin late 1998anda desireto avoid a repeatof the Slovakparliament'sfailure to elect a new presidentafter Kovac's term had expiredin March 1993, leaving the country without a president. A processof constitutionalconvergenceis discernibleacrossthe region. Most CEE constitutionsnow have a weak head of state, even where the president is directly elected, who plays mostly a symbolic role and intervenesin politics only in explicitly defined casesto limit institutional conflicts. A notable exception to this trend is Romania, which retains a semi-presidentialsystem based on the French model. Under the 1991 constitution,for instance,the presidentand not the legislaturenominatesthe prime minister. The lack of clear constitutional rules concerning the dismissalof the prime minister hasled to political disputes.While the 1991 dismissalof PetreRomanby PresidentIlliescu did not raisecontroversy,the 1999 removal of Prime Minister Radu Vasile by PresidentConstantinescu has provoked institutional disagreement,which the Constitutional Court refusedto interpret.Nonetheless,a more typical developmenthasbeenthat witnessedby Romania'ssouthernneighbourBulgaria.Throughinstitutional trials and tribulations in the early 1990s, particularly the severetensions betweenPresident ZhelyuZhelev and Prime Ministers Philip Dimitrov and Ljuben Berov,13Bulgariaappearsto havefound a balanceof powerthrough a processof simultaneouslearning. ExecutiveLeadership

In general,constitutionsin CEE give little guidanceaboutthe organisation of cabinets. Usually constitutions state that decisions are to be taken collectively or they assign a particular role to the prime minister. This situation is not, however,unique to CEE polities. Cabinetdecisionmaking in WesternEuropeis often more a matterof practicesthan of constitutional rules. Parliamentsplay an importantrole in cabinetformation thanksto the fact that in most CEE countriesnewly formed cabinetshave to passsome form of parliamentaryinvestiture.14 Dependentas it is on the constitutionalpositions of the presidentand parliamentand the natureand strengthof parliamentaryparties,the position of prime minister in the matrix of power differs significantly throughout Central and EasternEurope. Most CEE constitutionsprovide for a weak prime ministerial leadership, although both the Hungarian and Polish

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constitutions include provisions strengtheningthe position of the prime minister. Not everything, however, is down to the wording of the constitutions.The relatively strong position of the premier in the Czech Republic seemsto have less to do with the constitutionalarrangementand more to do with the political context,particularlythe relative stability of the party system,the cohesionandparty disciplineof the ruling political parties and inter-party co-operation.Moreover, the former Slovak Prime Minister Vladimir Meciar was not averse to ignoring the provisions of the constitutionto increasehis control over political system. In addition to constitutionallimitations, prime ministersin CEE are also hamperedby political limitations on their power. The cabinetsthey chair are invariably not of their own making. They do not have a free hand to 'hire and fire' ministers. Many CEE prime ministers can be forced to accept parliamentarydecisions on the dismissal and appointmentof individual ministers.More significantly, the selectionof cabinetmembersis often the result of bargainingbetweencoalition partnersrather than a purely prime ministerial decision. In the post-fascistdemocratictransition in Germany and Spain constitution crafters designedthe position of prime minister carefully to help promote stability in the polity, most notably through the introduction of the constructive vote of no-confidence.In contrast, the constitutionalarrangementof the executive,andin particularthe position of the premierin CEE did not receiveas much attentionas in the Germanand Spanishcase.Indeed,the relative neglectof the premier'sposition marks a clear deviation from the WesternEuropeanmodel. The failure to devote adequate attention to the position of the prime minister could have significant implications for the future of CEE countries.Stableexecutives not only assistapplicantcountriesin their quest for EU membership,but they also strengthenthe position of memberstateswithin the EU structures. Although a sweepinggeneralisation,it appearsclear a strong and united governmentcan achievemore within Europeanstructuresthan a weak and divided one. There is a general agreementabout the poor performance of CEE executivesin general.15 Among the reasonsfor this dissatisfyingfunctioningof the executiveis not so muchtheir weakconstitutionalpowersasa generallack of experienceon the part of new ministerial elites. The very structure and organisationof cabinet has been under constantreview. Almost every new government has changed the structure of ministers and ministries, the committeesystems,andsomehavealsoalteredproceduresof decisionmaking. Such tinkering is not unique to CEE. WesternEurope has also indulged in similar amendments,but not to the sameextentor with the samefrequency.

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The nature of coalition government has also complicated cabinet formation and operation. Fragmentedand unstable party systems,often accompaniedby high polarisation,havehamperedthe rule of the executive. Moreover, lack of trust amongcoalition partnershas necessitated detailed coalition and policy agreements.Such documentsoften include not just a description of the spoils of office - which party gets control of which ministry - but also outline policy. Detailed agreementscan form the basis of stable government,but as the current (1998-) Slovak governmenthas demonstrated,both differing interpretationsof thesetexts and problemsnot explicitly dealt with in the documentscan causetensionsand difficulties between the coalition partners. In order to resolve difficulties between coalition partners,pre-cabinetbodiessuch as coalition councils have been instituted. Even the existence of such institutions, however, does not precludecabinetmeetingsfrom degeneratinginto opportunitiesfor parties to criticise the policies of their partnersin government.The CzechRepublic has employedan unusualmechanismfor promoting stability, the so-called oppositionagreement,betweenthe Social Democrats(CSSD) and the Civic DemocraticParty (ODS). After the 1998 electionsCSSD fell short of an overall parliamentary majority. Rather than form a regular minority government, CSSD leader Milos Zeman signed a pact with his sworn enemy,ODS leaderVaclav Klaus, allowing CSSD to govern in return for policy guaranteesand control of importantparliamentarybodies.Although the agreementprovokedstronghostility amongthe smallerpartiesexcluded from evena sniff of power, and has at times beenawkward for both sides, it has achieved its overriding aim of providing Czechs with a stable government. In most CEE countries cabinet meetingstend to be lengthy and time consuming procedures, with the exception of Hungary, where a sophisticatedhierarchical and multi-level system of government was established,and it is evidentthat the complicatedproceduresand relations amongcoalition partiescan work to underminethe administrativecapacity of the executive.It may well be that the CEE countriescould benefit from assistanceor advice from the EU in this regard, particularly in that the political context and the party system cannot be subject to institutional engineering Executivesare dependenton bureaucraciesto implement policy. The conceptof a 'neutral' state bureaucracywas not prevalentin CEE in the early 1990s. The boundaries between political and administrative appointmentshave beenestablishedonly gradually. In the first half of the 1990s,the generalpattern of the ruling political parties was to replaceas

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much staff as possiblein the state administration,which underminedthe overall performance of the government. In response to the constant chopping and changing of bureaucrats,one of the top priorities of the National Accession PartnershipProgrammeswas to pass civil servicerelated legislation to limit the high turnover of personnelin the state administrationand to stabilisethe positions and competenciesof officials. The aim of such legislation is to foster political independenceand reduce the scopefor political interventionin the appointmentof officials. The ED deservespraisein this regard.Without the ED's pressureit is not clear,most notably in the Czechand Slovakcases,whetherpolitical partieswould have been willing to pass such legislation. Reform of the state administration aimed at achieving a politically impartial and rationalisedbureaucracyis hamperedby two factors,however.Firstly, the existingtermsandconditions of thoseofficials currently in place; and, secondly,the comparativelylow levels of salariesin the public administrationcomparedto the private sector are not attractive for well-educated young people. Low salaries also reinforcethe incentivesfor increasedcorruptionin the statesector. In contrastto WesternEurope,someCEE countriesincorporatedNGOs in the process of the government, taking over public administration functionsnormally performedby the government.In Bulgaria,for example, the training of governmentalstaff was organisedby NGOs and not by the stateinstitutions.In Slovakia,somebills were draftedwith the assistanceof NGOs. The fact that some institution building was undertakenby NGOs suggeststhat when the state is weak, civil society may take over its functions and act as a democraticconsolidator. The Place of Parliaments

The new constitutions in Central and Eastern Europe tend to accord a greater role for legislaturesthan most of the recent Western European constitutions, such as the 1949 German Constitution, the 1958 French Constitutionor the 1978SpanishConstitution.16 The moreelevatedstatusof parliamentsis in part a product of the legacy of communistrule, when, theoreticallyat least,the constitutionsinvestedall powerin parliament,but part of the explanationis also to be found in the processof democratic transition. In the initial stages of transition parliaments served a dual purpose, not just as an ordinary legislature, but also as a constituent assembly. Thanks to their 'institutional self-interest' the constituent assemblies crafted institutions with a more powerful role for the legislature.17 At the beginning of institutional crafting, for example, the Polish and Romanianparliamentswere given the power to override the

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rulings of the constitutionalcourts.Whetherthe relatively exaltedstatusof CEE parliamentscomparedto their legislativecousinsin WesternEuropeis desirableor a portent of troubles aheadin an enlargedEU is an open question.Thereare so many variablefactors, not leastthe personalitiesand party programmesof future parliamentarydeputies,that it would be unwise to predict an outcome.The EU would, however,be well advisedto think through possible scenariosand either preparecontingencyplans and nip possiblefuture problemsin the bud. The choice betweena unicameraland bicameralparliamentwas rather contingent.In so far as a patterncan be observed,it follows that which has been noted in the rest of Europe, with unicamerallegislaturesexisting in countries with small populations. Two of the region's largest countries, Polandand Romania,optedfor bicamerallegislatures.The decisionof the Czechsto institute a Senatehad less to do with concernsof size than with historical traditions, institutional self-interest and political bargaining. Slovenia'supper chamber,with its advisory function and recruitmentby appointment,appearsto be more the legacyof the self-governingregimein the former Yugoslaviathan the outcomeof consideredinstitutional choice. Whether bicameralor unicameral,parliamentsare powerful actors in the political processin CEE, although the extent of their power varies from country to country. Parliamentsin CEE countries tend to enjoy many powers over the establishment,replacementand suspensionof the executive,judicial bodiesand their incumbents.Although the institutional framework createsthe parametersof the parliaments'power, the extentto which parliamentscan use this power is dependenton non-institutional factors such as the compositionof parliament,the party systemand party discipline and cohesion. Thanks to fractious parliamentsand unstablecoalitions, the legislative processcan be long and drawn-out.One might expectunicameralsystems to have speedy legislative processes.According to the European Commission'sannual reports, the legislative process in most applicant countrieshasbeenratherslow, evenin thosewith onechamberparliaments. The reasonsvary from country to country. One of the most importantis the existenceof parliamentaryrules andprocedures.In mostCEE countries,for example,standingordersusually require threereadingsto adopt any piece of legislation.Eachreadingtakestime. Absorption of the EU's body of laws, the acquis communautaire,is a prerequisitefor entry into the club. Incorporatingthe EU's laws, which run to around80,000pagesandhavebeenbuilt up over decades,could be a long and laborious processif normal procedureswere used. Not only would it

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demandenormousamountsof legislative time, depriving the countriesof CEE of the time neededto deal with domestic laws, it would also put a brake on fulfilling accessionaspirations.CEE countrieshave resolvedthis problemby instituting shortenedproceduresfor acquis-relatedlaws. In Bulgaria, for example,the National Assemblyset up a Council on EuropeanIntegration, chaired by the Speakerto consider all draft laws relatedto the adoptionof the acquis. It is madeup of three membersfrom eachof the five parliamentarygroups, which are representedon an equal and non-proportionalbasis. Where the Council membersagree there is consensuson a draft law, the Council can replacethe committeesand send a draft law straight to the plenary for a vote, thus speedingup procedures. However, should one parliamentarygroup object, the draft law must go through the normal procedures.Such a procedureappearswise and well thought-out, enabling rapid incorporation of acquis-related laws where generalconsensusexists,but whereinitial agreementis absentconsensusis valuedhigher than raw speed.In a similar vein, the CzechRepublic'slower chamber has amendedits rules of procedure to introduce a fast-track possibility for EU-relatedlaws. Prior to the submissionof legislativedrafts by the governmentto the parliament,ministersdiscussthe matter with the Committeefor EuropeanIntegration. Slovenia'sparliamentalso treatsEU-relatedlaws as a legislativepriority and has used extraordinary sessionsto speed up their adoption. The EuropeanCommissionremainedcritical, complaining that 'the legislative processis still slow and no progresshas been made in streamlining the parliamentaryprocess', 18 becauseevery law still requiresthreereadingsand acquis-relatedlaws are not allowed to jump the legislative queue.All laws are dealt with in the orderthey are submittedto parliament.Criticism of the slow pace of legislation has stimulated the Slovenes to introduce an acceleratedprocedurefor adopting EU-relatedlaws, where three readings were held within a few days. To legitimise these proceduresthe ruling political partiespushedfor the adoptionof a new parliamentstandingorder, which would shorten the current three-readingprocedure,and limit the speakingtime of parliamentarians.Due to difficulties in obtaining a twothirds majority in parliament,this attempt to changethe current standing orderhas so far beenunsuccessful. More drastic tactics have been adoptedin Romania,where the fragile ruling coalition in the highly fragmentedparliamentwas able to passonly 59 of the 453 bills in 1999. The governmenthas tried to circumvent a parliamentwith more than its fair shareof un-cooperativeMPs by issuing extraordinarydecrees,which immediately enter into force and need only

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retrospectiveapproval by parliament. However, the frequent use of this governmentalprocedure, although backed up by the constitution, may distort the institutionalisationof democraticlegislatureandweakenthe state administrativecapacity. Fast-trackingfor EU-relatedlaws also has important consequences for the institutionalisationof democraticnorms.Attractedby the lure of joining the club that flows with milk andhoney,applicantnationshavecastasidethe norms typical of democraticlegislatures.Regularparliamentaryprocedure, which provides for several steps in making legislation, ensuresthat all political forces in the parliament can provide input into the legislative drafting process,but slows down the process.The speedyproceduresfor the acquis-relatedlegislation run the risk of reducingparliamentsto little more than rubber stampsand may underminethe overall institutionalisationof parliamentsand weakentheir legitimacy. In particular,the consolidationof the committee system may suffer, in that fast-tracking tends to bypass committees. Committees play an important role in fostering habits of political bargaining and cross-party co-operation. Fast-tracking will thereforehamperthe emergenceof sucha proceduralculture. The institutional effectivenessof parliamentdependsin part on the men and women who sit in the chambers.Many of the new parliamentariansin the early 1990swere, by and large, inexperiencedin parliamentaryaffairs. Although the situationhasin generalimprovedover the pastdecade,as the recentLithuaniaexampleshowed,the numberof inexperiencednewcomers can still be high. In the early post-communistdays deputies were also hamperedby the lack of support staff and generalresources,a situation much improved in the past ten years or so. The performanceof the parliamentsis also dependenton the political context. Parliamentaryparty discipline and cohesion, or their absence,have complicatedmatters by sometimesblurring the distinction between governmentand opposition. Fluid party systemsand weak party loyalty amongst deputies result in shifting coalitions and changesin government,a patternwhich appearsto be particularly prevalentin smaller polities such as the Baltic Statesand Slovenia. Parliaments throughout Central and Eastern Europe have begun increasingly to resemble their sister institutions in Western Europe. Legislative effectiveness,organisational articulation and rule abiding patterns of behaviour have been or are being acquired. In terms of organisation, membershipand procedures,the institutional capacity of parliaments has been gradually increasing, and this has helped the institutionalisationof democracyin the region.

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Electoral Systems

The choice of electoral systemis important becauseit helps to shapea country'sparty system'9 and consequentlyalso its institutional framework, that is, the compositionof the parliament,the form of executive,and the overall profile of executive-legislativerelations. The chosen electoral systemplays a significant role in explainingthe degreeof fragmentationof parliamentsand thus influencesthe creationand durability of governments which dependon the enduring confidenceof a parliamentarymajority. In creating the electoral systema number of choices need to be made. The most obvious choice is that betweenmajoritarian, proportional or mixed formulas,but otherissuessuchas openversusclosedparty lists, preference voting, thresholds, assembly size, district magnitude and different mechanismsemployed to count the votes (Hagenbach-Bischoff/Droop, D'Hondt, STY, Imperiali and so on) are important and can be of significance.2o In accordancewith the prevailing norms in Western Europe, CEE countries have tended to opt for proportional representationelectoral systemsratherthan using the plurality formula. HungaryandLithuaniawith their mixed PRlplurality systemsare exceptionsto this generaltrend. Even within PR, however,thereare variations.Justas WesternEuropeansystems differ as to the numberand magnitudeof constituencies,the existenceand type of party list and the methodsfor countingvotes and remainders,so the PR systems instituted in CEE differ from each other. As the Polish experienceshows,the introduction of thresholds,for example,can have a 'reductive effect'21 on the number of parties in parliamentand therefore increasegovernability, but it can also nullify the votes of a significant portion of the electorate.Indeed,in electionsin the early 1990saround a quarterof Czechs,Slovaksand Bulgariansvoted for partieswhich failed to cross the respectivethresholds.This fact highlights an important broader point. Whateverthe constrainingeffects of the electoralsystemsmight be, thesemay be mitigated by the degreeof institutionalisationof the party system.22 The initial decisionto opt for PR was in part a desireto emulateWestern Europeandemocracies,but it was also the productof political traditions,the political bargainingprocess,an aversionto the ideaof one-partyrule andthe desire to foster political pluralism.23 With the exceptionsof Poland and Bulgaria (which will be discussedbelow), none of the applicantcountries seriously considereda plurality electoral system as a possible solution, although conventional political science wisdom asserts that this

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arrangementis more likely to enhancepolitical stability in the form of governmentdurability than proportionalelectoralformulas. Despitethe fact that Poland's1989electorallaw providedfor a plurality systemit was soon abandoned.Thanks to the fracture of both major party groupingsa new roundof electoralsystemnegotiationbegan.Given the fact that in a fragmentedparty systemno individual actor could hopeto benefit from plurality voting rules, most Polish legislatorsfavouredand adopteda party list PR system. The upshot of this new arrangementwas a proliferation of parties in parliament and the inability to create a stable government.In response,most legislators backed the introduction of a thresholdrequirementtypical of WesternEuropeandemocracies.Oneof the unexpectedoutcomesof this attemptat 'institutional engineering'was the elimination of several post-Solidarity parties who had backed the threshold'sintroductionfrom the parliament. Initially Bulgaria opted for a mixed electoral systemcombining multimemberdistrict proportionalrepresentationwith a four per cent threshold and single-memberdistrict majoritarianrepresentation.After the Bulgarian Socialist Party (BSP) began losing support, however, the BSP led a successfulreform of the processresulting in a closed list, multi-member district proportionalrepresentationsystemwhich favouredlarger partiesto the detrimentof the smallersplinterparliamentaryparties.In both the Polish and Bulgarianexamplesthe decisionto move towardsproportionalsystems was largely due to the powerbalanceconcernsof domesticpolitics. Judicial Review

CEE polities have copied WesternEuropeanmodelsby instituting judicial review, but they have accordedit a strongerposition in their polities. Both constitutional courts and the very concept of constitutional review are almostcompletelynew phenomenain CEE. Only a few of the countriesin the region, such as inter-war Czechoslovakia, had pre-communist experiencewith constitutional courts. Even in the Czechoslovakcase, however,it did not playa major role in the political system. In WesternEuropejudicial review is a rathercontestedinstitution, as it makes non-elected judges politically influential, although there is no mechanism for holding those judges accountable.Why did the CEE political elite and legal expertsallocateso much power to small groups of lawyers without instituting any mechanismof accountability?The answer probablylies in the communistexperienceandthe desirefor an independent and neutral arbiter. Czechoslovakia'sCharter 77 provides an illustrative example. That particular dissident movement was founded explicitly

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(althoughotherulterior motives were also present)to highlight the fact that the communistgovernmentwas not obeyingits own laws on humanrights. More broadly, emergingfrom 40 yearsof communismand into a fluid and uncertain political environment, CEE countries were keen to see the emergenceof a body which could solveconflicts aboutthe interpretationof the rules of the gameand at the sametime protecthumanrights, including minority rights, which had beenneglectedand violated in the past. Although all applicant countries have furnished their polities with a constitutional court, there are some variations. Constitution drafters in severalcountriesperceivedthe conceptof judicial review as contraryto the main idea of popularand parliamentarysovereignty.Polandand Romania, for example,somewhatreluctantlyincludedthe constitutionalcourtsin their constitutionaldesigns,andlimited their actualpowersby allowing a special parliamentarymajority the right to overturnthe courts' decision. The stronger version of constitutional courts in CEE has played a prominent role in the consolidationof democracy,as many political and legal disputesbetweenruling parties and opposition have been settledby constitutional jurisdiction. Their binding decisions have establisheda minimum but necessarycertainty of the rules of the game. Political elites throughout the region have not always agreed on the interpretation of constitutionalprovisions and have at times tried to use the constitutional courts to resolve arguably non-constitutional political disputes, but throughoutCentral and EasternEuropea generalacceptanceof the courts' rulings hasprevailed. Informal Rulesand Unwritten Agreementsin the Institutional Framework

The importanceof informal rules in the institutional framework has been alludedto earlier,but beforeconcludingit is worth reiterating.Thanksto the multi-party systems and fragmented parliaments in CEE countries, problems are resolved by means of coalition bargaining, including the establishmentof informal coalition bodiesandformal coalition agreements, cabinetreshufflesand, if all else fails, early elections.Prior to 1989 these processeswere mostly unknown in the region and have neededto be learned. However good an institutional structure,informal rules between political actorsare essentialfor the successfulfunctioning of a democratic polity, becausenot all conflicts can be managedthrough formal structures. Successful democratic institutionalisation requires an unwritten understandingthat the change-overfrom one governmentto anotherwill not harm the stability of the democracyand that the new governmentwill continuealong the samedemocraticpath.

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TowardsEven Greater Convergence?

Adoption of the acquis is not just significant in terms of its procedural effect. The incorporationof the EU's body of law into the domesticlaws of the applicant statesis also having a substantiveeffect on the social and economicpolicies implementedin CEE. Beyond the elementsof what we could dub the first-level institutional design (the meta-rules of the constitution),we may seemore convergenceon a secondlevel in order to address socialand economic problems in accordancewith EU law and procedure.Other factors may also play their part here, of course,not least the motive force of 'Europeanisation'(rather than 'EU-isation') to adopt Wallace'sterminology again. We would be wise, however, to add a note of caution on the speedof institutional convergencein CEE. The West Europeanmodel, for instance, is built on the idea of strong political parties representingthe interestsof voters and acting as bridgesbetweenstate and society. In CEE, however, there has been a greater prevalencefor parties to articulate an agenda dominated by entry into Western and West European clubs (and the necessarymembershiprequirements)rather than pursue any ideological agendaand/or representclearly defined sectionalinterests.More broadly, adopting the West Europeaninstitutional model involves an adaptationto the values necessaryfor such a framework to function properly and effectively. Such value adaptation takes time and may require the introductionof unusualshort-termsolutions. CONCLUSIONS

Central and EasternEurope has witnessedsignificant institutional change since the end of communism.Both WesternEuropeanmodelsand the EU have played an important role in the processof institutional development, but domesticpolitical factors and the institutional historiesof the countries in the regionhavealsobeensignificant.The prevalentinstitutionalmodelin CEE consists of parliamentarydemocracy,a proportional representation electoral system, multi-party politics, coalition governments and constitutionalreview. All applicant stateswith the exceptionof Romania have opted for someform of parliamentarysystemof government,evenif their presidentsare directly elected.This framework, as Linz and others predicted,has lessenedstakesin politics, minimised zero-sumoutcomes, andcontributedto the consolidationof democracy.24Moreover,the adoption of proportionalvoting systemshas limited the chancesof majority rule and

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the emergenceof a more adversarialtype of politics. It has helped to promoteconsensusand has taughtpolitical leadersof the needto craft and maintain coalitions, even if they have to be embeddedin formalised coalition contracts.The reality of the last decadein Central and Eastern Europehas shownthat in spite of a plethoraof problemsthe main political actors have, with a few exceptions, demonstratedtheir respect for democracyand the rule of law, making their countriesreliable partnersfor EU accession.A paradox at the heart of the EU enlargementprocess, however,is that someinstitutionsestablishedto hastenthe adoptionof EUrelatedlaws may harm the institutionalisationof parliamentarydemocracy and also the national interests of candidate countries. The Bulgarian solution to this problem (as outlined above)appearsto be a good solution, combining as it does a desire to fulfil the aspirationof EU membership, whilst ensuring the desire to follow the proceduresof a consensual democracyare not thrown into the institutional rubbishbin. The impactof fast-trackingis a symptomof a deeperproblem.Effective governancerequires some degreeof flexibility and institutional diversity. Pressuretowardsuniformity can, if takentoo far, be inimical to efficacious governance.Just as golfers are allowed to pick which 14 clubs they play with, so the statesof the enlargedEU should have the right to choose whether to pick the institutional equivalentof the sandwedge or another driver to suit their circumstances,traditionsand needs.Thereis, as Wallace argues, 'in the more mechanicalprocessof EU enlargement'the need to 25 recognisethe value of indigenouspracticeand preference. The emergingCEE institutionalpatternhassignificantconsequences for their respectivepolities. As Lijphart suggested,institutional frameworks which promoteconsensustendto yield parliamentsand governmentswhere sometimesfractious coalitions are more likely to predominateand where musteringthe requisitemajorities to passlegislationcan be difficult. 26 The institutional framework in CEE has helped to hinder effective cabinet government,particularlyin thosecountrieswhereformer communistor new nationalist forces do not sufficiently support democratic values. The obstaclesin the way of effective executive decision making, although theoretically beneficial to the fostering of a pluralist democracy, may thereforeunderminethe institutional and organisationalability of the state to implementthe social, economicand administrativereforms necessaryto build a moderndemocraticstateon the WesternEuropeanmodel. Enlargementis a challengenot just for the applicantstatesof Centraland EasternEurope,but also for the institutions of the EU itself. At the Nice EuropeanCouncil, EU leadershammeredout a deal aimedat reforming the

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EU's decision making proceduresto enable effective governancein an enlargedUnion encompassingup to 28 states.The provisions of the Nice Treaty, should it be finally accepted,and particularly the extension of qualified majority voting, might help to ensure more effective decision making, but effective governancemay also require further reform. Coping with diversity by centralisation may not be the answer. Effective governancein the enlargedEU thereforerequires a balanceto be struck betweena workableinstitutionalframeworkfor the EU and a recognitionof diversity and complexity acrossthe Europeancontinent. Despite what the Euroscepticstell us, particularly in Britain, the most important decision making bodies in the EU remain those which are constitutedof memberstates'executives:the Council of Ministers and the EuropeanCouncil. Given the relatively weak position of CEE executives and their greaterdependenceon fragmentedparliaments,it may be wise, therefore,for CEE countriesto considerstrengtheningtheir executivesin order to ensure better representationand articulation of their national interestswithin the EU decisionmakingframeworkandhenceincreasetheir bargaining power. The relatively weak executive leadershipin CEE has beenpartly replacedby EU conditionality and otherexternalpressures.The reliance on the desire to pleaseexternal actors, particularly the EU, may thereforelead to a decreasein the legitimacy of the stateand its institutions. One meansof restoringor enhancingthe legitimacy of the statemay lie in strengtheningthe position of the executive,and the proceduresadoptedby CEE legislatures to pass EU-related laws highlight the benefits and drawbacksof suchsystems.But while the national aspiration to join the EU can be pursuedmore easily and effective governancecan be increased,this could neverthelesshinderthe emergenceof the necessarydemocraticvalues including consensus.In politics, where good argumentsexist on both sides of the debate,balanceshaveto be struck. It may be wise for CEE countries to place all the argumentsback on the scales,weigh up the options and strike a new balance.

NOTES 1. The terms are thoseof Schopflin: seeG. Schopflin Politics in Eastern Europe 1945-1992 (Oxford and Cambridge:Blackwell 1993), pp.256-300. 2. H. Wallace, 'The Domesticationof Europeand the Limits to Globalisation', paperdelivered to IPSA Congress,Quebec,Aug. 2000.

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3. Council of the EuropeanUnion, PresidencyConclusions:CopenhagenEuropean Council (Brussels:EuropeanUnion 1993); J. Gower, 'EU Policy to Central and EasternEurope',in Karen Henderson(ed.), Back to Europe: Central and Eastern Europe and the European Union (London: UCL Press1993), pp.3-22,particularly pp.7-8. 4. S. Haggardand M.D. McCubbins (eds.),Presidents,Parliaments,and Policy (Cambridge: Cambridge University Press 2001); S. Steinmo, K. Thelen and F. Longstreth (eds.), Structuring Politics: Historical Institutionalism in Comparative Analysis (Cambridge: CambridgeUniversity Press1992); A. Przeworski,'Democracyas a ContingentOutcomeof Conflicts', in J. ElsterandR. Siagstad(eds.),ConstitutionalismandDemocracy(Cambridge: CambridgeUniversity Press 1988), pp.59-80; J.G. March and J.P. Olsen, Rediscovering Institutions: The OrganizationalBasisofPolitics (New York: FreePress1989);J. March and J. Olsen, 'The New Institutionalism: OrganizationalFactors in Political Life', American Political ScienceReview78/3 (Sept. 1984),pp.734-49. 5. C.Offe, 'DesigningInstitutionsin EastEuropeanTransitions',in J. Elster,C. Offe and U.K. Preuss, Institutional Design in Post-communistSocieties: Rebuilding the Ship at Sea (Cambridge:CambridgeUniversity Press1996), pp.199-226. 6. M.S. Shugart,'The InverseRelationshipbetweenParty Strengthand ExecutiveStrength:A Theory of ConstitutionalChoices',British Journal of Political Science28 (1998), pp.I-29 at p.28. 7. K. Williams, 'ConstitutionalChoices and Separationof Powers in East Central Europe' (unpublishedlecture,Schoolof Slavonicand EastEuropeanStudies,UCL, 29 Nov. 2000). 8. Elster et al., Institutional Design,p.15. 9. Shugart,'The InverseRelationship',p.2. 10. S. Holmes, 'Conceptionsof Democracy in the Draft Constitutions of Post-Communist Countries',in B. Crawford(ed.),Markets, StatesandDemocracy(Boulder: Westview 1995), pp.71-81 at p.73. 11. 1. Zielonka, 'New Institutions in the Old East Block', Journal of Democracy512 (1994), pp.87-104;S. Holmes, 'Back to the Drawing Board',EastEuropeanConstitutionalReview 2/1 (1993), pp.21-5. 12. G. Sanford, 'ParliamentaryControl and the Constitutional Definition of Foreign Policy Making in DemocraticPoland',Europe-AsiaStudies51/5 (1999), pp.769-97. 13. V.1. Ganev, 'Bulgaria', in Robert Elgie (ed.), Semi-Presidentialismin Europe (Oxford and New York: Oxford University Press1999),pp.l24-49. 14. J. Blondel and F. Muller-Rommel(eds.),Cabinetsin EasternEurope(Houndsmills:Palgrave 2001); J. Blondel and F. Muller-Rommel (eds.),Cabinetsin WesternEurope (Houndsmills: Palgrave1997). 15. Zielonka, 'New Institutions'; R. Taras 'The Politics of Leadership',in S. White, 1. Batt and P.G. Lewis (eds.), Developmentsin Central and East European Politics 2 (London: Macmillan 1998),pp.103-25. 16. J.-E. Lane and S. Ersson, The New Institutional Politics: Performanceand Outcomes (London and New York: Routledge2000). 17. Elsteret at., Institutional Design. 18. European Commission 'Regular Report' 2000 on Slovenia posted at europa.eu.int/comm.lenlargement/slovenia. 19. M. Duverger,Political Parties: Their Organizationand Activity in the Modem State(New York: Wiley 1954); R. Taagerperaand M.S. Shugart, Seats and Votes: The Effects and Determinantsof Electoral Systems(New Havenand London: Yale University Press1989). 20. Elster et al., Institutional Design; M. Gallagher, 'ComparingProportionalRepresentation Electoral Systems: Quotas, Thresholds, Paradoxesand Majorities', British Journal of Political Science22 (1992), pp.469-96. 21. G. Sartori, ComparativeConstitutionalEngineering:An Inquiry into Structures,Incentives and Outcomes(Houndsmills,Basingstoke:MacMillan 1997),p.32. 22. R.G. Moser, 'Electoral Systemand the Number of Partiesin PostcommunistStates',World Politics 51 (April 1999),pp.359-84at p.360;T. Haughton,'The Institutional Frameworkof Slovak Politics' (unpublishedpaper,School of Slavonic and East EuropeanStudies,UCL, London University, 2001).

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23. B. Geddes,'Initiation of New DemocraticInstitutionsin EasternEuropeandLatin America', in A. Lijphart and C.H. Waisman(eds.),Institutional Design in New Democracies(Boulder: WestviewPress1996), pp.15-42. 24. J.J.Linz, 'The Perils of Presidentialism' , Journal ofDemocracy,1 (Winter 1990),pp.51-69; J.J. Linz, 'The Virtues of Parliamentarism',Journal of Democracy1 (Fall 1990), pp.84-91. 25. Wallace, 'The Domesticationof Europe'. 26. A. Lijphart, Democracies(New Haven: Yale University Press1984).

Making Markets and Eastern Enlargement: Diverging Convergence? LASZLO BRUSZT

MARKET MAKING AND EUROPEANISATION

The 1990swas the decadeof market making in both parts of Europe.This was the decadeof the radical extensionof the internal market and the creationof the conditionsfor the EuropeanMonetaryUnion in the Western part of Europe. This was also the decadein which the former communist countries undertook to transform their economies,to create functioning marketeconomies,and, as of the secondhalf of the decade,to build up the conditions for entry into the EU internal market. Market making in the former communistcountrieswas influenced in severalways by the other part of Europe. In undertakingto transform their economies,the political elite in thesecountriesusedthe ideology of 'Europeanisation'extensively, and the promise of potential EU accessionplayed a considerablerole in shapingpolitical cleavagesand the political agendawithin thesecountries. As of the early 1990s,the EU also playeda considerablerole in settingthe criteria for Europeanisationin the economic transformation for these countries,and actively participatedin building up capacitiesto meet these criteria. This study discussesthe broad question of the extent and content of 'Europeanisation'of Central and EasternEuropean(CEE) countriesat the level of market making. It argues that, for the most successfulCEE countries, Europeanisationat the level of market making meant the emergenceand the strengtheningof a state with strong capacities to preserveand regulate markets, while having at the same time increased administrativeand transformedplanning capabilities. By the end of the 1990s,thoseCEE countriesthat had suchstateshad comecloseto meeting the EU's demandingconvergencecriteria. Countriesthat did not havesuch states diverged both from the successfulCEE countries and the EU. However,eventhe most successfulCEE countries'converged'on a moving

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target.While undertakingto meetthe Copenhagencriteria of national-level market making they were 'converging' on EU member countries that themselveswere busy diverging from these criteria in order to meet the Maastrichtcriteria of supranationalmarket making. The contentof these criteria diverged,and so did the consequences of meetingthem. The Copenhagencriteria of national-level marketmaking that were the official compass for the CEE countries coupled neo-liberal policy prescriptions aiming at the rapid exposure of these countries to supranational markets with considerable demands on establishing domesticmarket order by way of building the institutional capabilitiesof nationalstates.The Maastrichtcriteria of transnationalmarketmaking, on the other hand, coupleddomesticlevel policy demands withthe transfer of basic domestic state capacitiesto the supranationallevel. The most successfulCEE countriesmet the criteria of Europeanisationat the level of market making with relatively strong regulative statesthat were busy (re)creating, transforming and further strengthening their planning capacities.Within the EU, at the sametime, national stateswere losing a large part of their capabilities to manipulate economic processes. Substantialparts of the economic powers of the national states were transferredto the supranationallevel and the placing of the domestic governmentswithin a Europe-widecompetitiveregime further decreased their scopeof action. On the other hand, and largely as an unintended side-effect of supranationalmarketmaking,organisationsof non-stateactorsandtheir cooperative institutions becameconsiderablystrongerin severalof the EU member countries. This developmentled in several EU countries to the partial mitigation of the social consequencesof supranationalmarket making being undertakenin the absenceof supranationalwelfare state making. During the 1990s, however, non-state actors and various cooperative institutions in the CEE countries remainedweak or were even further weakened.I As a result, thoseCEE countriesthat are achievingmost progress in Europeanisationat the level of market making diverge considerablyfrom the newly emerging EU 'model' of capitalism itself, consistingas it does of different sub-typesof 'embedding'markets.This emerging EU model of capitalism mixes elements of supranationally regulatedmarketswith weakenednationalstatesand,in mostof the member countries,relatively strongernon-stateactorswith co-operativeinstitutions that seek to maintain competitivenessand to alleviate the social consequences of increasedcompetition.While severalof the CEE countries havewell functioning marketeconomies,most of the institutionsthat could

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make markets more inclusive, and/or support the process of catch-up growth of theseeconomies,are weak or absent. The emerging capitalism in CEE countrieslooks like an institutional desert,at least in comparisonto the form(s) of capitalismevolving within the EuropeanUnion. Institutions that would improve the market power of the different categoriesof economicactorsand allow for the emergenceof 'win-win' forms of co-operationamong them are lacking. All in all, the good news from Central Europe is that the countries most developedin marketmakinghaverelatively strongstates.The badnewsis that in mostof these countries only the state is strong, while all other major economic actors, such as domestic business,labour or the local and regional selfgovernments,are weak. The configurationof strongstatesand weak social and economicactors might have afforded the leading CEE countriesa relatively calm arrival at the gatesof the EU. Yet this configurationmight also becomethe biggest liability for thesesamecountriesduring the next stageof Europeanisation, that is, once they are within the EU and approachingthe semi-peripheryof Europe.The major argumentof this study is thereforethat while progressin statemaking was the sine qua non of Europeanisationat the level of market making, the constellationof forces noted above might becomethe major obstaclefacing thesecountriesin their efforts to cope with the social and economic problems of participation in the next stage of supranational marketmaking. The next sectiongives a sketchygeneraloverview of the processesof convergenceand divergenceamongthe CEE countries,as well as between thesecountriesand the existing EU memberstatesat the level of market making. The following sectionthen discussesthe specificsof national-level market making in the CEE countries,focusing on the factors that explain divergencein Europeanisationat this level. The final part discussesthe 'divergingconvergence'betweenthe CEE and EU membercountriesat the level of the organisation of economic actors and their co-operative institutions. CONVERGENCEAND DIVERGENCE

In assessingdevelopmentsduring the last decadeat the level of market making from the viewpoint of the highly demandingEU performance criteria, we can see considerableconvergencebetweenthe two parts of Europe.According to the regularreportson the progress towards accession, the five leadingreform countriesof the region basicallymeetthe so-called

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Copenhagencriteria, that is, they havea 'functioning marketeconomywith the capacityto copewith the competitivepressureand marketforces within the Union'.2 According to the samereports,severalother countriesare also on their way to meeting thesecriteria in the medium term. The degreeof economic integration that these countries have achievedwith the Union even prior to accession,as measuredby the volume and rangeof products tradedwith EU memberstates(the evidenceusedby the EU of the ability to take on the obligations of membership)is also impressive.The CEE countrieshave doubledtheir exports sincethe beginningof the 1990s,and by the end of the decadealmost 80 per cent of theseexports went to the Westerncountries.In terms of the structureof the regulationstaken over from the EU, and in terms of the structure of their trade, finances, organisationand ownership, the leading reform countries have already 3 integratedinto the EU economyevenbeforethe actual accession. Behind theseindicators of convergencethere are severalprocessesof considerabledivergence,which, althoughnot challengingthe processesof convergencenoted above, might still impose important constraintson the longer term Europeanintegrationof the economiesin the region. The first of these is the serious divergencein economic developmentswithin the region itself. Following nearly a decadeof experimentationwith economic reforms, we find signs of the consolidation of the market order and competitiononly in the leading reformist countriesin the region. In many of the post-communist countries that have rapidly undertaken the liberalisationof prices and trade and the privatisationof property, we find anythingbut signsof the emergenceof a functioning marketorder.The most important difference betweenthe two groups of countriesis perhapsthat while the latter have stateswith the capacityto uphold economicfreedoms, to maintain the rule of law, to resist statecaptureand to regulaterelations among economic actors, the former do not have such states. The constitution of a market making state in several of these countries was blocked by the dominanceof a nationalistic political agenda and/or the presenceof strongeconomicgroupsthat capturedthe state.'The creationof states with the capacity to constitute and preservethe market order is thereforea task that still lies aheadfor severalcountriesin the region. In accountingfor this type of divergence,as will be discussedlater, legacies of the past, the characteristicsof constitution making and bad economicpolicies played the major role. The EU itself could play only a partial, albeit non-negligible role in re-making statesin the region. The criteria of Europeanisationof the CEE economies, the so-called Copenhagencriteria, include severalelementsof statemaking as conditions

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of creatingfunctioning markets,and through various programmes,the EU directly participatedin the upgradingof the administrativeand institutional capacitiesof severalof thesestates.The EU alsoplayeda role in influencing the formation of national political agendain severalof the South-Eastern Europeancountries throughvarious incentives.However,in addressingthe problem of state capture, the anti-corruption measuresand policies suggestedby the EU provedinadequate.Unlike corruptionitself, which is a generalproblem in both parts of Europe, statecapturecan be linked to a specific power structure within the state, and cannot be cured without 5 considerablychangingthe structureof representation. The secondprocessof divergencecan be observedbetweenthe EU membercountries and the leading eEE reform countries at the level of building institutionsof economicdevelopment.Market makingin both parts of Europewas strongly anddirectly linkedto the (re)makingof the stateand to the strengtheningof the institutional capacitiesof the (supra)national stateto preserveand regulatemarkets.Within the EU the strengtheningof the regulativecapacitiesof the supranationalquasi-statewent handin hand with preserving and, in several cases, with strengtheningvarious nonmarket institutions of economicgovernanceat the national, regional, local and workplace levels. Linking diverse groups of non-state actors with diverse metrics of successin economic development,these co-operative institutions facilitated combining the creationof the conditionsto improve competitivenesswith a wider rangeof developmentalgoals,and so allowed diverse actors to frame markets in a socially and economically less exclusiveway.6 Examplesinclude the renewalof nationallevel socialpacts, the extensionof social dialogueat national, subnationaland supranational levels, the (re)emergenceof various institutions of developmental partnershipsat sectoral and regional levels, or the new forms of crossborder collective bargaining.7 In the other part of Europe, institutionbuilding efforts were concentratedon strengtheningsolely the capacitiesof central state agencies.The different organisationsof labour, businessor local self-governmentsare weak, and the diversity of co-operative institutions characteristicof the EU, albeit sometimesformally presentin the region, do not play any significant role in framing marketsin a more inclusive way. This type of divergencefrom the 'Europeanmodel' can largely be explained by domestic conditions, including the weaknessof diversenon-stateorganisations,their problemsof legitimacy, or the largely 8 exclusionarypolicies of nationalgovernments. In the emergenceof this type of divergence,however,problemsof the 'self-definition' of the EU as a distinctive model of economicdevelopment

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also playeda considerablerole. Putting it briefly, while the strengtheningof regulative state capacitiesis part of the evolving neo-liberal 'European model', the diverse co-operativeforms of economic governancelargely form the 'optional' part of the model, and as somethingthat is mainly seen as a matterof the domesticbusinessof the memberstates.9 To be sure, the struggle within the EU to 'Europeanise'such institutions, that is, to make thempart of the 'model',hasachievedsomesuccess,but, perhapsreflecting the ongoingfight for the redefinition of the model, EU pressureon the new applicantsto take over suchinstitutions has beenweak.1OWhile the EU put strong pressureon the applicantcountriesto modernisethe administrative, regulativeand developmentalplanningcapacitiesof their statesboth at the nationalandlocal level, its pressureon the applicantsto extendthe scopeof co-operativeinstitutions that could frame marketsin a more inclusive way provedratherlukewarm.II Largely relatedto this institutional void, the third processof divergence could be observedinside the non-EU member countries in the form of growing disparities acrossregions, sectorsand social groups, as well as between the 'internationalisedlEuropeanised' parts and the rest of the economy.As arguedbelow, the co-operativeinstitutions might well playa central role in the reductionof such disparities.Finally, at leastin the first decade of economic transformation, there was not much evidence of convergenceat the level of aggregateindicatorsof economicdevelopment andquality of humanlife conditionsbetweeneventhe bestperformingCEE countries and the EU member countries.12 While the EU did include a country such as Portugal, with relatively poorer economic and social indicators,the persistencein the relativebackwardness of the CEE countries might be seen as an indirect proof of the weaknessof a developmental strategy based solely on the market enhancing capacities of state 13 bureaucracies. To summarise, the Europeanisationof the economies of the CEE countries in the first decadeof transformationwas primarily about state making and less aboutnon-stateinstitution building. As is discussedin the next part, those countriesthat have a functioning market economyin the region havea marketpreservingstateand a regulativestate.While someof the countriesof the region havestatesthat, accordingto surveys,are weaker then statesin Sub-SaharanAfrica, othershave considerablyhigher market preservingand regulativecapacities.14 One of the lessonsof the last decade of reformshasbeenthat neitherprivatisation, northe introductionof all the regulationsof the developedworld, as happenedin many of the countriesof the region, will createa marketeconomyif the stateis too weakto resistthe

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pressure of redistributive groups. Such state capacities might be strengthenedif power is less centralisedwithin the state and if the 'nonhierarchicalelementsof the state' are correspondinglystronger. MARKET MAKING AND STATE MAKING: DIVERGENCE AMONG THE CEE COUNTRIES

Diversity in economic developmentis not a new feature of economic changein EasternEurope.Evenbeforethe political regimechangein 1989, countries in the region had widely diverged in their patterns of industrialisation, and, as a consequence,in their patterns of industrial distortions.They have also differed in terms of their structureand patterns of foreign trade. Some were closer to autarchic patterns of economic development;othershad graduallyopenedup their economiesto the world market. They had different levels and forms of economicimbalances,and had experienceswith different types of economicreforms. While the share of the private sectorwas generallylow, in someof the countriesthe share of the so-called 'secondeconomy' was higher. While in most of these countriesthe role played by market institutions was also limited, in some countries in the region it was possible to find an extensiveuse of such institutions. What was commonto all the countriesof the region was the unstoppabledeteriorationof their positionsin the world marketthroughout the 1980sand the slowing down of their economicdevelopment. This divergencein economicdevelopmentremaineda constantfeature of the region evenafter the political regimechange.In the 1990s,however, it has appearedin a much more dramatic and historically unprecedented form. In someof the countriesof the region, after a relatively shorterperiod of transformationalrecession,economicrecovery beganearly, and by the secondhalf of the decadethese countries were approachingthe level of economicdevelopmentthey held in 1989 as measuredby GDP.15 In these countries,economicrestructuringhasbeenconsiderable,and most are now on the pathto what canbe calledsustainableeconomicgrowth. The number of suchcountriesis still very small, however.The majority of the citizensin the region still live in countrieswhere after the loss of 40-60 per cent of GDP, it is only the inequalities that have grown, and their economies continueto stagnateor decay.16 Washingtonvs. Brussels

Economicreformersthroughoutthe region were pushedand pulled in two diverging directions at the beginning of the economictransformation.On

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the one hand,the recipescoming from acrossthe Atlantic and forming part of what was calledthe Washingtonconsensus,havestressedthe importance of de-statisationand de-regulationin the processof marketmaking. While it has never been formulated in the framework of an encompassing blueprint, the messagecoming from Brusselswas at least as clear: market making is about the re-makingof the state,aboutre-regulationof relations among economic actors, and about the re-institutionalisation of the economy.The proponentsof the Washingtonconsensusmeasuredprogress in economicreforms in terms of the level of freedom from the state.The criteria of successformulatedby the EU, on the otherhand,besidesthe level of liberation, consistedof measuressuch as progressin the regulation and development of state capaCItIes, including administrative and developmental planning capacities. According to the experts of the international financial institutions in Washington, market making was primarily aboutmaking economicactivity a privatebusiness.The Eurocrats visiting the region, however, have left no doubt about their seeing the market as one of the state-madesocial institutions, and as a specific structure of state-maderights and obligations continually policed and monitoredby the regulatorystate.The moreconcreteprescriptionsbasedon the Washington consensuswere formulated as measures liberating economicactivity from the state: liberalisation of prices, liberalisation of tradeand privatisation.Thesemeasureswere supposedto 'get pricesright', thus allowing the price mechanismto effect co-ordinationamongeconomic actors undisturbedby the state, and so leading economic development towardsthe radiantfuture. While measuresof economicliberalisationalsoformedpartof the policy proposalscoming from Brussels,the EU prescriptionswere mainly about 'getting institutions right' as a condition of getting pricesright, and also as a condition of being considered for accession to the EU. 'Getting institutions right' was mainly about strengtheningstatecapacitiesto create and preservethe market order, to police and monitor competition, and to enablenon-stateactors to improve their market positions by creating and monitoringdiversenon-stateinstitutionsof economicgovernance.As of the second half of the 1990s, this also includes increasing developmental planningcapacitiesat the variouslevels of the stateapparatus. In the first few years of economic reforms, it was basically the Washington consensusthat shaped policies in the region. Extensive regulationof the economybeganonly in the middle of the decadeand the building up of regulative state capacities also began long after the introduction of liberalising measuresin most of the CEE countries.Within

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the region, however,progressin this field is highly uneven,and, as will be seenbelow, it is still divergencethat is the major defining characteristicsof the situation. The most important lessonsof the first decadeof reforms from this viewpoint could be summarisedas follows. First, liberalisationof pricesand trade brought about beneficial economiceffects in those countries where stateshad the capacityto re-regulaterelations amongeconomicactors and prevent their misuse in asymmetries in economic power.17 Second, privatisation has improved the functioning of the economy in those countries where stateshad a strong capacity to uphold property rights, to maintainthe rule of law, to createa predictablepolicy environment,and to regulate relations among economic actors.IS Third, liberalisation and privatisation have led to economic restructuringand economicgrowth in those countriesthat had stateswith a strong capacityto uphold rights and preservecompetition, but only those countriesthat had stateswith robust defences against state capture had market preserving and regulative capacities.19 Finally, the introductionof eventhe most extensiveregulations did not improve the quality of the marketsif the legal effectivenessof the state was low; the use of legal transplantsand even the introduction of extensivelegal reforms were not sufficient in countrieswith statesthat had a weak capacityto maintainthe rule of law and to enforcetheir own laws.20 TABLE 1 REGIONAL AVERAGES OF THE CREDIBILITY INDICATOR AND ITS COMPONENTS

Componentsof the credibility indicator Region All countries High-incomeindustrial countries Southand SoutheastAsia Middle Eastand North Africa Central and EasternEurope Latin America and the Caribbean Sub-SaharaAfrica Commonwealthof IndependentStates

Credibility Predictindicator ability

Political stability

Violence Reliability Lack of of judiciary corruption

3.23

3.21

3.25

2.80

3.04 3.86

4.14 3.69 3.28 3.22

3.85 3.55 3.36 2.93

3.64 3.98 5.04 4.27 3.94 4.12 3.56 3.28 4.01 2.86 3.57 2.61 2.72 3.14 3.82 3.51

3.12 3.17 2.91 3.06

3.60 2.57

2.43 2.63 2.59 2.76

3.79 3.55

2.87

2.91

2.16 2.35

3.16

2.69

Source: Aymo Brunetti, Gregory Kisunko and Beatrice Weder, 'Credibility of Rules and EconomicGrowth: Evidencefrom a Worldwide Survey of the Private Sector',The World Bank EconomicReview1213 (1998), pp.353-84.

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Table 1 offers measuresfor the regional averagesof the credibility indicatorandits components.Thesemeasurethe perceptionby privatefirms of the extent of credible state commitmentto preservethe market order. Basedon this survey, we can speakabout progressin market making if statesare in place with the capacityto build up amongeconomicactors a stableexpectationthat their propertyrights are safe,that they can count on the stateto enforcetheir contractsin caseof disputes,and that they do not haveto fear losing their gainsas the result of suddenchangesin policies by unpredictableor corrupt governments.As can be seenfrom the table, the expectationsof private economic actors about state capacity to enforce contracts or produce predictable policies without being corrupted are actually lower in the former Soviet Republicsthan evenin the Sub-Sahara African countriesor in Latin America. On the other hand, the subjective evaluationof statecapacitiesto preservethe marketorder are significantly higher in the Centraland EasternEuropeancountries. Networksand StateCapture

In 1989, the year when the political and economicchangesbeganin the region, the neighbouring ED member countries had states with robust capacities to preserve market order, enforce competition and regulate relationsamongeconomicactorsled by somecommonlyacceptablenotion of public good. More specifically, these states had a well-developed capacity to uphold economic rights, enforce obligations, maintain predictable policy environmentsfor economic actors, and prevent the misuseof asymmetriesin economicand informational power. Thesestate capacities were sustained by intra-state mechanismsthat reduced the dangersof arbitrary policies and hencealso reducedthe risks of a general regulatorycaptureby powerful economicgroups.Most of the Central and EastEuropeannationsdid not havesuchstatesat that time. The rapid devolutionof the economicpowerof statesin micro-decisions to private actorsin many of thesecountriesdid not result in the emergence of market order, competition and the re-emergenceof economic development.Instead,in the countriesof the region where the statesand democratic institutions were weak, market reforms resulted in the economiesthat were dominatedby predatorygroupsand of statesthat were dominated by the same groups. Contrary to the expectationsof the reformers,the post-privatisationproperty regimes in the region were not basedon forms in which managementand ownershipwere separatedand in which corporate governance was conducted by banks or through transactionson the stock exchange.Rather, the dominant role in the new

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property regimes, at least in the first half of the decade,was played by different forms of under-regulatedcross-ownershipof firms and financial institutions,with, in severalcases,stateagenciesco-owningthesefirms and banks.21 The formation of these networks was closely linked to the enormous growth in the uncertaintiescausedby rapid liberalisation, and, in many countries,to the insecurity of property rights. The evolution of the balance of power between these networks and the state was the major factor determining the path of economic development in these countries throughoutthe 1990s.The relative powersof the financial-industrialgroups and stateswerelargely shapedby the level of economicdistortionsinherited from the past regimes, the speed of the liberalising policies, and the 22 In countrieswhere the inherited characteristicsof the statesthemselves. economic distortions were high, market reforms meant a dramatic redistributionof economicopportunitiesand powersfor a large numberof firms and regionsthat lackedthe capacityto adjustto the exigenciesof the market. The more rapid the liberalising measures,the more firms were pushedto form networks- first, in orderto survive, and later for 'going for the state'as a strategyof survival.23 Countriesthat inheritedeconomieswith highly distorted economic structures, that introduced liberalisation too rapidly, and that had newly formed statesin which power was strongly centralised,representedthe worsecases.In thesecountries,mainly the postSoviet republics, stateslacked the capacity to resist these networks and hence were easy prey.24 In the Central Europeancountries, on the other hand, the inherited levels of economic distortions were much lower, the speedof reforms was slower than in the post-Sovietrepublics, and states had strongercapacitiesto resist capture.It was in thesecountriesthat the regulativestatecould emergeby the secondhalf of the 1990s.25 StateCapacity

To date, there are three elementsof state functions that remain in short supply in the region. The first is the state'scapacityto uphold the general rights of economicactorsand to createa predictablepolicy environmentfor them. According to the World Bank survey summarisedin Table 1, such statecapacitiesare at their weakestin the world within the countriesof the former SovietUnion, beingweakereventhanin the countriesof Sub-Sahara Africa or Latin America. In the CentralEuropeancountriesthe capacityof statesto uphold rights and maintain a predictablepolicy environmentis stronger, yet still weaker than what can be found in the most advanced capitalistsocieties.26 The secondtype of statecapacityin short supply is the

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capacityto preventthe use of stateinstitutions by powerful private groups to redistribute wealth and opportunities to themselves.According to a recently published survey, in many of the Eastern European countries economic actors can reasonably expect that competitors can literally purchasepolicies and regulations at the different branchesand levels of government.27 Perceptionof suchstatecaptureby private groupsis low only in a smallergroupof post-communistcountries.Finally, the third type is the capacityto regulaterelationsamongeconomicactorsin a balancedway and prevent the misuse of asymmetriesin economic and information power within the market. Again, accordingto recentsurveys,most of the statesof the region could not introduceextensiveandeffectiveregulationsenforcing competition and/or market orientation even in such decisive areasas the financial markets.28 These are exactly those state characteristicsthat shape the overall capacityof statesto constituteand preservethe marketorder, and to enforce competition and market orientation. In the absenceof thesecapacitiesin severalof the countriesof the region, economicactorsare hesitantto invest in the formal sector of the economy and prefer to enter into only very elementaryforms of economic transactions,such as barter. In severalof thesecountriespredatorygroupsdominate'markets'and statesarecaptured by thosevery samegroups.29Problemsof socialand economicdevelopment in these countries are different than in those that have more or less functioning marketeconomies.While the questionthe latter countriesface is how to correctthe economicand socialproblemsof otherwisefunctioning market orders, in the former countrieseconomicand social problems are relatedto the non-existenceof functioning markets,or moreprecisely,to the corruptionof statesand marketsby self-seekinggroups. DecisionMaking

The capacity of statesin democratic countries to constitute functioning marketsis largely the result of the way decision making about social and economic issues is structured within the state. While in countries with corrupted markets and captured states decision making is excessively centralisedand limitations on executivepowers are weak, in the leading 30 In the latter countries, reform countriesstatepower is more decentralised. when state executivesmake their policies they have to take into account diverse representationsof the public good - representedby coalition partners,parties in different housesof the legislature,different levels and branches of the government, autonomous state agencies, and the organisationsof civil society and economic society. In such a state, the

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horizontal accountabilityof executivesby other autonomousstateagencies reducesthe risk of misusingstatepowerand the encroachmenton the rights of non-stateactors. Independentjudiciaries with the powers of judicial supervision,and rules that makeany changeto basicrights an arduoustask, prevent executivesfrom taking arbitrary decisionsand henceforce them, and the non-stateactors, to honour the law. The existenceof autonomous stateagenciesthat can force incumbentsto respectspecific rules in the use of public resources,and of stateagenciesthat representspecificrights or the rights of specific minority groups, further extend the accountability of executives.It is through the institution of distributed authority and the permanentpressureon executivesto take diverserepresentationsof public good into accountthat the likelihood of state captureis reduced.On the otherhand,the stateis up for grabsin countrieswherepoweris concentrated and where mechanismsthat would tie the handsof executivesand prevent them from arbitrarily interveningin the economyare lacking.31 After nearly a decadeof struggleto liberate economicactivity from the state,many of the countriesin the region now face the problem of how to liberate a statethat has beencapturedby economicgroups.If they want to createa functioning market order, they will needa statethat is capableof regulatingthe highly unevendistribution of economicpower in a balanced way. But, in order to re-balancetheir economies,they first need states liberated from the hold of powerful economic groups. The task of (re)making stateswith the capacityto constituteand preservemarketorder still lies aheadin many of the countriesof the region.

FunctioningRegulativeStates Based on these various features, it is possible to conclude that Poland, Hungary, the CzechRepublic, Sloveniaand Estoniahave well functioning regulative states,with Lithuania, Latvia, Bulgaria, Slovakia and Romania lagging behind. The task of market making and, correspondingly,state making, still lies ahead in the remaining 14 countries in the region, including nearly all the former Soviet Republics as well as some of the South Eastern Europeancountries.This rank orderbasicallycorrespondsto the 'success'indicatorsusedin comparativetransitionstudiesandto the EU reportson accessioncountries.32 The countriesbelongingto the first group undertooka considerablerestructuringof their economies,their economic growth startedin the secondhalf of the 1990s,and someare now amongthe fastestgrowing economiesin Europe. The emergenceof a functioning market-preservingand regulative state in thesecountrieswas largely the result of domesticpolitical and economic

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processes,although theEU also played a considerablerole in helping to consolidateand upgradetheir regulative and administrativecapacities.In addition, the promise of participation in the EU social and economic cohesion programmesplayed a considerablerole in renewing and remaking the developmentalplanning capacitiesof thesestates.The EU role in this field was partly direct, by settingmandatorygoalsin the form of the acquisand by giving financial and technicalhelp for the implementationof these requirements.The EU also played a considerableindirect role by placing thesecountriesin a regulativecompetitionframework through the more or less forced opening up of their economies. That said, the Europeanisationof statesin thesecountriesis still highly uneven,and state building has affectedmainly central governmentsthat are hesitantto share their powers with other branchesand levels of government.Moreover, the autonomy of the newly created regulatory agencies is questionablein several of these countries (for example, the Czech Securities Exchange Commission,or the Hungarian Banking and Capital Market Supervisory Authority), while the cohesionand autonomyof the statebureaucraciesin some of these countries is weakenedby the remaining elementsof the 'spoils system',andby the possibility that the staff or the organisationof the statebureaucracycould be changedaccordingto political criteria. Finally, local developmentis under the control of central governmentsin most of these countries and hence financial and political autonomy at the local levels is weak.33 DIVERGING CONVERGENCE?

The economicdevelopmentalproblemsof thoseCEE countrieswith a more or less functioning market economydiffer almost on a country-by-country basis within the region. Nevertheless,they all face the challenge of 'inventing' institutions of economic developmentthat could increasethe competitivenessof their economies, make development socially more inclusive, and support the process of their catch-up growth. While the specific countrieswithin the current EU belong to different 'sub-types'of capitalism,nearly all of the institutionsthat arecited as providing themwith a competitiveadvantageare weak or absentevenwithin the leadingreform countriesof Central Europe.34 The often cited institutions of 'co-operation for competitiveness'of the continental European forms of capitalism, including co-operative industrial relations and established long-term relations amongbanks,firms, regional and local governments,labour and businessassociations, arebasically lacking in the region. And while a

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considerablerole has beenplayedby the old and the newly inventedforms of developmentalassociationsof diverse non-stateactors in transnational market making within the EU, in the CEE countriesit was the regulative statethat was basically the prime mover of economicdevelopmentduring the first decadeof reforms. Industrial Relations

Both trade unions and businessassociationsare weak and fragmentedin most of the CEE countries. Althoughinstitutionsof tripartite concentration are present,they areunder-utilisedin mostof thesecountries.Nevertheless, during the early 1990s, several national-level tripartite pacts did help to encouragegovernmentsto initiate large scale reforms. Once these were introducedin most of the countriesof the region, governmentsturned to labour-exclusivepolicies, further weakeningorganisedlabour and, in some 35 The numberof firmof thesecountries,also organiseddomesticbusiness. level collective agreementsis low, thereare very few sector-levelcollective agreements,and the coverageof labour through collective agreements, ranging between20 and 50 per cent, is much below the EU level. The growing competitivepressureon governments,sectorsandfirms in manyof the continental EU countries led to the re-making of collaborative institutionsat firm and sectorlevel, andin many countriesthe movementto EMU led to the rebirth of social pactsat the national level. In the Central Europeancountries,by contrast,managersand statebureaucratsdominate economic restructuring without any significant concertation.While the Copenhagencriteria include elementsof strengthenedsocial dialogue at various levels, theseprescriptionsform the 'soft' part of the acquisand are not enforcedby the EU. One cannot expect any automatic convergencein industrial relations once the first group of CEE countries is inside the transnationalmarket making regime. The organisationand the fragmentation of labour and businessdiffers from one countryto anotherwithin the region, and change in this field will dependon the existing conditionsand the strategiesof the non-state(trans)nationalorganisationsin both parts of Europe.In someof the CEE countries,the desireto join the EMU andmeetits economiccriteria might well encouragepolitical elites to considerablyupgradethe systemof industrialrelations- as was the casein Irelandor Italy in the 1990s.In other countries,the persistentfragmentationof labour and businessmight induce national governmentsto weaken labour further and push the system of industrial relations more in the direction of the Anglo-Saxon model of 'disorganisedcapitalism'. Finally, the inclusion of labour and business

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representatives in the national, sectoraland regional developmentplanning processes- another unenforced chapter in the 'official guidelines of Europeanisation'- might alter the balanceof forces betweengovernments and organisedeconomicactors.36 DevelopmentalPlanning Oneof the uniquefeaturesof Europeanisationat the level of marketmaking hasbeenthe introductionof developmentalplanningin thoseCEE countries that are busy leaving behind their dysfunctionalplannedeconomies.To be sure, this 'European' developmentalplanning differs dramatically in its principles from the centralplanning of the statesocialistregimes.Labelled as the 'dictatorshipover needs',the later provided the central party state with exclusive and uncontrolled prerogatives to define the goals of economicdevelopment.Linked intimately to the Europeannew left's 'Third Way' ideology, the recent European developmentalplanning embodies diametrically opposing principles. These include the empowermentof diversesocial and economicactorsto participatein the frameworkof local and national partnershipstogetherwith the organsof the statein designing and implementing developmentalprogrammesunder the conditions of extendedand multi-level accountability.37 The social and economiccohesionpolicy of the EU that funds national, regional and sectoraldevelopmentalprogrammesmight considerablyalter relations between central governments, local and regional selfgovernments,and various organisedsocial actors. At the moment,in most of the CEE countries,the economic and political autonomy of local and regional actors is weak, and restructuring is moving in many countries towardsdecentralisedadministrativeself-empowermentof the state.Except in Poland,and as a result of recentchanges,in the CzechRepublic,political decentralisationthat would increaseregionalautonomyis almostabsent,the political organisation of local self-governmentsis fragmented, and the regional organisationof labour and businessis weak. Weak local financial autonomy, as well as the centralisationand centralisedredistribution of locally generatedincomes,further weakenthe potentialdevelopmentalrole of localities. The CEE countries fIrst joining the EU might gain access to EU developmentfunds in the range of 1.5 to 2.5 per cent of their GDP, an amountthat equalsor in somecountriesevensurpassesthe presentvolume of FDI they recently receive.The terms of conditionality regardingaccess to thesefunds might considerablyalter the developmentalpossibilities of non-state actors in these countries. They might further strengthen the

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prerogativesof centralgovernments,or they might empowerlocal, regional and national-levelnon-stateactors.As things standright now, in the 'first planning period', between 2004 and 2007, the EU Commission might decideto go for the funding of a single National DevelopmentPlan in each country only, changingits previouspracticeof funding a centralisedsectoral and severaldecentralisedregionalprogrammes.But althoughthis changein policies might prove convenientfor the Commission,it might also directly effect the developmentof relationshipsbetweencentral governmentsand other social and economic actors. Central governmentsin the accession countrieshave beendoing their best to preservetheir prerogativesand the changein the policies of the EU could give them further encouragement. The institution of developmentplanningwas introducedin the late 1980sas a mechanismto empowernon-stateactorsto frame marketsfrom below in a more inclusive way, and as a prime mover in decentraliseddemocratic experimentation.Ironically, it could well tum out that the sameinstitution in the CEE countrieswill insteadbecomethe mechanismby which central statesbecome(re)empowered. In conclusion,the constellationof strong states,weak non-stateactors and forms of social and economicgovernancehas played a considerable role in shapingthe social and economiccharacteristicsof marketmaking in the region in the first decade of Europeanisation.This study was not intendedto speculateaboutthe probablesocial and economicconsequences of joining the next stage of transnational market making under the conditions of the general weaknessof forms of social and economic governancethat could frame markets in a more inclusive way. The persistentweaknessof the organisationsof non-stateactors and forms of governance,togetherwith the expectedrapid transferof the accumulated powers of domestic governmentsto supranationallevels, might have dramaticconsequences from the viewpoint of the citisensof thesecountries. Adjustment to the new conditions will almost certainly prove path dependent,and will be shapedby the already existing conditions within thesecountries.But it will also be largely influencedby the characteristics of EU policies vis-a-vis thesecountries. NOTES 1. See, for example, B. Greskovits and D. Bohle, 'DevelopmentPathways on Europe's Periphery: Poland and Hungary Compared'(ms, Central EuropeanUniversity, Budapest, 2000). 2. These are, the Czech Republic, Estonia, Hungary, Poland and Slovenia (European Commission,RegularReportFrom the Commissionon ProgressTowardsAccession,2000).

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3. On the issue of the integration of CEE countries to the EU economy see the insightful analysisof Laszlo Csaba,'Az Union keleti politikaja es a kibovioos', Europai Szemle12/1 (2001), pp.95-103. 4. LaszloBruszt, 'Heterarchiesand DevelopmentalTraps',in K.K. Hinrichs andH. Wiesenthal (eds.),Kontingenzund Krise, Institutionenpolitikin Kapitalistischenund Postsozialistischen Gesellschaften(Frankfurt, New York: Campus Verlag 2000); B. Greskovits, 'Hungary's Post-CommunistDevelopmentin ComparativePerspective',in WernerBaer and JosephL. Love (eds.), Liberalization and its Consequences.A Comparative Perspectiveon Latin Americaand EasternEurope (Cheltenham:EdwardElgar 2000). 5. Laszlo Bruszt, 'Market Making as StateMaking: Constitutionsand EconomicDevelopment in Post-CommunistEasternEurope',ConstitutionalPolitical Economy(forthcoming). 6. On the social and economicimpact of such co-operativeinstitutions see A. Hicks and L. Kenworthy, 'Cooperationand Political Economic Performancein Affluent Democratic Capitalism', AmericanJournal of Sociology103/6 (1998), pp.1631-72. 7. Seeamongothers MarinoRegini, 'BetweenDeregulationand Social Pacts:The Responses of European Economies to Globalization', Politics and Society 28/1 (2000), pp.5-33; Michael J. Gorges,Euro-Corporatism?InterestIntermediationin the EuropeanCommunity (Lanham,MD: University Pressof America 1996);Michael F. Kluth, The Political Economy of Social Europe: Understanding Labour Market Integration in the European Union (London: Palgrave1998); Michel Freyssenetet al. (eds.),One Best Way? Trajectories and Industrial Models of the World's AutomobileProducers(Oxford: Oxford University Press 1998); Giuseppe Fajertag and Philippe Pochet (eds.), Social Pacts in Europe - New Dynamics (Brussels: OSE - EuropeanTrade Union Institute 2000); Robert Boyer et al. (eds.), BetweenImitation and Innovation: The Transfer and Hybridization of Productive Models in the International AutomobileIndustry (Oxford: Oxford University Press1999); KathleenThelenand Ikuo Kume, 'The Effectsof Globalizationon Labor Revisited:Lessons from Germanyand Japan',Politics and Society2714 (1999), pp.477-505;Philippe Pochet (ed.), Monetary Union and Collective Bargaining in Europe (Brussels:PeterLang 1999). 8. SeeGreskovitsand Bohle, 'DevelopmentPathways';David Stark and Laszlo Bruszt, PostSocialist Pathways: Transforming Politics and Property in Eastern Europe (New York: CambridgeUniversity Press1998). 9. Martin Rhodes, 'Capital Unbound? The Transformation of European Corporate Governance',Journal of EuropeanPublic Policy 5/3 (1998), pp.406-27. 10. On the ongoing fight to redefinethe 'Europeanmodel' see,for example,Jon Erik Dolvik, 'RedrawingBoundariesof Solidarity?The ETUC, Social Dialogueand the Europeanisation of TradeUnions in the 1990s',in Emilio Gabaglioand ReinerHoffman (eds.),The ETUC in the Mirror of Industrial Relations Research(Brussels: EuropeanTrade Union Institute 1998), pp.295-347.For a different perspective,see Wolfgang Streeck, 'EuropeanSocial Policy after Maastricht: The Social Dialogue and Subsidiarity', Economicand Industrial Democracy 1512 (1994); and Wolfgang Streeck, 'The Internationalizationof Industrial Relationsin Europe,Prospectsand Problems',Politics and Society2014 (1997), pp.429-51. 11. Elena Iankova, 'Converging with Europe? Central and Eastern Europe's Return to Capitalism' (Cornell University, Institute for EuropeanStudiesWorking Paper99/1, 1999). 12. Greskovitsand Bohle, 'DevelopmentPathways'. 13. Portugaljoinedthe EU in 1986with a percapitaGNP that was 27 percentof the EU average, much lower then the contemporaryfigures for the leading reform countries of CEE. See 'More Membersfor the EU? A Reporton EU Enlargement',Helsinki: EVA Centerfor Finish Businessand Policy Studies,1997, cited by 'Convergingwith Europe?'. 14. Aymo Brunetti, Gregory Kisunko and BeatriceWeder, 'Credibility of Rules and Economic Growth: Evidence from a Worldwide Survey of the Private Sector', The World Bank EconomicReview12/3 (1998), pp.353-84. 15. The concept of 'transformationalrecession' stems from Janos Komai, 'Transformational Recession:The Main Causes', Journal ofComparativeEconomics19/1 (1994),pp.36-63).For reliable dataon post-communistdivergence,seethe Transition Reportsof the EuropeanBank for Reconstructionand Development(EBRD) from 1997, 1999and 2000(London, EBRD). 16. For an excellentoverview of economicconditions in the region see the EBRD Transition

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Report1998. 17. J.E. Stiglitz, 'Whither Reform?' World Bank Annual Bank Conferenceon Development Economics,Washington,DC, 1999; Bruszt, 'Heterarchies';J. Hellman, 'WinnersTake All: The Politics of Partial Reformsin PostcommunistTransitions',World Politics 50/2 (1998), pp.203-34. 18. K. Pistor, Martina Raiserand StanislawGelfer, 'Law and Financein TransitionEconomies', Economicsof Transition 8/2 (2000), pp.325-68;Andrei Schleifer and Robert Vishny, The GrabbingHand: GovernmentPathologiesand Their Cures(Cambridge:HarvardUniversity Press1998); Stiglitz, 'Whither Reform?' 19. Bruszt, 'Market Making'; Hellman, 'Winners Take All'; Stiglitz, 'Whither Reform?'; D. Weimer (ed.), The Political Economy of Property Rights: Institutional Change and Credibility in the Reform of Centrally Planned Economies (New York: Cambridge University Press1997). 20. Pistoret al., 'Law and Finance'. 21. J. Johnson,'Russia'sEmergingFinancialIndustrialGroups',Post-SovietAffairs 13/4 (1971), pp.333-65;Y. Kuznetsov, 'Learning in Networks', in J.M. Nelson, C. Tilly and L. Walker (eds.),The Post-CommunistPolitical Economies(WashingtonDC: National AcademyPress 1997), pp.156-77;G. McDermott, The CommunistAftermath: Industrial Networksand the Politics ofInstitution Building in the CzechRepublic(Cambridge:Massachusetts Instituteof Technology1998); Stark and Bruszt, Post-SocialistPathways. 22. On the role of the legaciesof the past, economic distortions and statecharacteristicssee Bruszt, 'Heterarchies';Greskovits and Bohle, 'Development Pathways'; Greskovits, 'Hungary'sPost-CommunistDevelopment';V. Popov, 'Output ChangeDuring Transition: The Role of Initial Conditions and Economic Policy', Voprosy Ekonomiky 7 (1998), pp.l021-47 (in Russian);V. Popov, 'Internationalizationof the RussianEconomy: What Went Wrong', Emergo: Journal of Transforming Economiesand Societies 5/2 (1999), pp.53-85. 23. Bruszt, 'Heterarchies'. 24. Ibid.; Hellman, 'WinnersTakeAll'; J. Hellmanand G. Kaufmann,'How Profitableis Buying StateOfficials in Transition Economies?',Transition 11/2 (2000), pp.8-11 25. On the differences in the speed of reforms see Greskovits and Bohle, 'Development Pathways'. 26. Brunetti et aI., 'Credibility of Rules'. 27. Hellman and Kaufmann, 'How Profitable'. 28. For an extensivesurveyon the divergencein the level of effectivenessand extensiveness of stateregulationsof financial marketsin the region seethe EBRD Transition Report1999. 29. Hellman, 'Winners Take All'; Stiglitz, 'Whither Reform?'; Bruszt, 'Heterarchies';L. Polishchuk, 'Misssed Markets: Implications for Economic Behavior and Institutional Change',in Nelson et al. (eds.), Transforming Post-CommunistPolitical Economies;D. Woodruff, Money Unmade: Barter and the Fate of Russian Capitalism (Ithaca: Cornell University Press1999). 30. Bruszt, 'Market Making'; Hellman, 'Winners Take All'; Stark and Bruszt, Post-Socialist Pathways;EBRD Transition Report2000. 31. Bruszt, 'Market Making'. 32. See,for example,EBRD Transition Report2000. 33. An examplefrom Hungary from an EU expertdealing with regional developmentalissues: 'Accordingto someestimationsmore thanhalf of the Hungarianmunicipalitieswould not be able to apply for the StructuralFundsunderthe presentsystembecausethey do not possess sufficient financial resources.This meansthat a large part of the Hungarianterritory and popUlation would be excluded from direct contributions from the European Union to improve their economic and social situation': see Luis MadeureiraPires, 'Study on the PresentInstitutional Structureof RegionalDevelopmentin Hungary and its preparationfor the EU StructuralFunds' (Budapest:Phare2001). 34. On the literature on comparativecapitalismin general,seeStark and Bruszt, Post-Socialist Pathways;on capitalistdivergencewithin the EU seeRhodes,'Capital Unbound'.Seealso J. Hollingsworth, Philippe C. Schmitterand Wolfgang Streeck(eds.),Governing Capitalist

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THE ENLARGED EUROPEAN UNION

Economies(Oxford: Oxford University Press 1994); Philippe C. Schmitter, 'Sectors in Modern Capitalism: Modes of Governanceand Variations in Performance',in Renato Brunetta and Carlo Dell'Aringa (eds.), Labour Relations and Economic Performance (London: Macmillan 1990); and Wolfgang Streeckand Philippe C. Schmitter(eds.),Private InterestGovernment:BeyondMarket and State(London: Sage1985). 35. A. T6th, 'Attemptsto Reform a Workers' Movementwithout MassParticipation',in Jeremy Waddingtonand Reiner Hoffmann (eds.), Trade Unions in Europe Facing Challengesand Searching for Solutions (Brussels: European Trade Union Institute 2000); A. T6th, 'Diverging Convergence:OrganisedLabour as a Factor in the Hybridisation of Production and the Consequencesfor Convergenceof Subsystemsof National Industrial Relations Systems'(ms, Budapest,Institute of Political Sciences,2001); A. T6th andR. Langewische, 'Introduction: Challengesof Transformationand Preparationsfor EU Accession',Transfer 6/3 (2000), pp.370-85. 36. In Hungary, for example,a 1999 Act excludedrepresentativesof both labour and business from participationin developmentalplanning at all levels. 37. For an insightful analysisof the origins of EU developmentalplanningseeLiesbetHooghe, 'EU CohesionPolicy and CompetingModels of EuropeanCapitalism',Journal of Common Market Studies36/4 (1998), pp.457-77.

Health not Wealth: Enlarging the EMU DANIEL GROS

The aim of this brief contribution is to provide a basis for a focused discussionabout the economicperspectivesof the candidatecountriesand how they would fit into the EU (andEMU). At presentthe startingpoint for most discussionsabout enlargementis that the candidatecountries from Central and EasternEurope (CEE) are much poorer than the EU average and that their institutional framework is also somewhatweaker.Therefore, it is often argued,the candidatesshould not rush into EMU until they have converged. The relevant convergence,so the argument goes, is 'real' convergence,not merely the convergenceto the Maastrichtcriteria (often referred to as 'nominal' convergence).'Real' convergenceis never well defined,but is usuallytakento meanconvergencein per capitaincome.The main thesis of this study is that this position is wrong. Health (potential growth) rather than wealth (income) is the decisive criterion. The key question is thus whether Euro area membershipfosters growth and thus helps to achieveconvergencein income. A finding that Euro area membershipacceleratesconvergenceto the EU-1S incomelevel doesnot imply that there will be no problems.On the contrary, quick convergencein income levels implies for some time divergence(or at least sustaineddifferences)in growth rates.This type of divergenceshouldbe manageable,as it posesonly the problemsof success. A brief contribution to the debatelike the presentone cannotcover all aspectof the story. It concentrateson two specific aspects:section two discussesto what extent this enlargementis 'specific' in terms of its size, the economic structures of the applicants and their past as socialist economies.Sectionthreethen providesan attemptto estimate theeconomic benefitsof EU andEuro areamembership.The conclusionsthen summarise and point out an unavoidableconvergence-divergence issue.

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THE ENLARGED EUROPEAN UNION

SIZE AND SPECIFICITY OF THE COMING ENLARGEMENT

It is often arguedthat this coming enlargementis unprecedented in termsof the increasein populationand othermeasures.However,this is not the case if one considers the size of the countries that joined during previous enlargements,relative to the size of the EC they thenjoined (seeTable 1). In fact, this enlargementis thus significant in terms of populationbecause all ten Central andEasternEuropeancandidatecountries(CEE-lO) would increasethe population of the EU by over one-quarter(the increaseis equivalent to the increasein the German population due to unification). However,by most economicmeasuresthe weight of candidatecountriesis negligible, evenif one assumesthat their economieswill grow rapidly. Table 2 showsthat in termsof GDP, evaluatedat currentexchangerates, the tenaccessioncountriescombinedwould be aboutone-fifteenth(six per cent) of the Euro area. This correspondsroughly to the weight of Netherlandsalone. Most of this, more than two-thirds, is accountedfor by the Luxembourg group (Czech Republic, Hungary, Estonia, Slovenia, Poland). In terms of monetaryindicators the story is not much different. Given that the candidatecountrieshave rather small financial sectorstheir combinedmonetarysupply amountsto generally slightly more than eight per cent of the corresponding Euro area aggregate. This implies immediately that even serious problems with the banking sectorsin the CEE-lO could never materially affect monetary conditions in Euroland. Moreover, in the financial area most of the weight within the CEE-IO is accountedfor by the relatively more advancedLuxembourg group of applicants.

TABLE 1 SIZE OF THE COMING ENLARGEMENT COMPARED WITH PREVIOUS ENLARGEMENTS

UK+Denmark+Irelandas % of EC-6 Spain+Portugalas % of EC-IO CEE-lO* as % of EU-15 Turkey as % of EU-15 Turkey as % of EU-25

Population

GDP in euro

Trade

33.5

27.9 8.3 4.1 2.4 2.3

13.1 4.7 10.9

17.5 28.0 17.0 13.2

7.0 6.0

* Czech Republic, Estonia, Hungary, Poland, Slovenia, Latvia, Lithuania, Slovakia, Bulgaria, Romania. Source: Own calculations of EuropeanUnion and EuropeanBank for Reconstructionand Development(EBRD) data.

Notes:

143

HEALTH NOT WEALTH: ENLARGING THE EMU TABLE 2 ACCESSION COUNTRIES: INDICATORS OF RELATIVE SIZE (1998 DATA)

Money Deposits Time Population GDPat GDPin MO: Cash Ml(% M2(% Demand of euro of euro- deposits savings,(% in min. current PPS(% (%of areaGDPI) (% of euro of euro area annual exchange of euro euro area area GDP) total) area) total) average! rates CzechRepublic Estonia Hungary Poland Slovenia Latvia Lithuania Slovakia CEE-8 (sum) CEE-3 [Hu, Cz, Pol] (sum) Bulgaria Romania Turkey 1990191data Portugal Spain Italy Greece Club Med (sum)

10.3 1.5 10.1 38.7 2.0 2.4 3.7 5.4

0.9 0.1 0.7 2.4 0.3 0.1 0.2 0.4 0.3 0.8

74.1 59.1

5.0 4.0

8.3 22.5 63.5 9.9 38.9 56.8 10.2 116.0

2.1 0.2 1.7 4.7 0.5 0.2

1.75 0.82 0.12 0.06 0.04 1.24 0.55 3.11 1.35 0.11 0.21 0.22 0.07 0.25 0.09 0.57 0.27

0.69 1.38 0.05 0.03 0.90 0.08 0.83 1.90 0.96 2.36 0.27 0.09 0.39 0.05 0.04 0.03 0.06 0.06 0.04 0.22 0.40 0.50

7.47 6.10

4.75 3.93

2.19 1.73

5.56 4.57

0.2 0.6 2.1 0.6

0.11 0.11 0.38 0.38 0.16 0.31

0.05 0.09

0.11 0.25

2.5

7.0

1.18

0.51

0.35

1.6

1.3 2.2 11.0 9.8 21.0 21.4 1.7 2.3

1.94 21.31 27.20 2.91

2.20 11.64

2.51 8.53 17.68 1.29 1.77

2.5 9.4 29.2 0.8

34.0 37.0

53.36

15.30 30.49

41.9

10.6 8.5

3.32 2.72

1.13

1.95

3.9 14.0 9.6 2.2 29.7

Source: ECB, Monthly Report, February 2000, IMF, International Finance Statistics, April 1999. The dataon money and depositsfor the Club-Med countriesis for 1998.

SPECIFICITY OF THIS ENLARGEMENT

The Candidatesare muchPoorer and 'Different' It is widely known that the candidatesare much poorer. The most widely

used indicator of living standardis GDP per capita at purchasingpower standards.On this accountthe Luxembourggroup is on averageat about50 per cent of the EU-lS average_This is somewhatlower than the valuesfor Portugaland Greeceat the beginningof the 1990s(severalyearsafter their accessionto the then EC and eight years before their participation in the Euro area). In terms of broadindicatorsof economicstructuresit is difficult to find strong systematic differences between the candidates and the poorer membercountries_The shareof agriculturein GDP is alreadyratherlow in the Luxembourggroup, around five per cent, and in most of the Helsinki group countries(Latvia, Lithuania, Slovakia, Bulgaria, Romania) as well.

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THE ENLARGED EUROPEAN UNION

The shareof industryin GDP is also not notablydifferent from somecurrent membercountries.The fundamentalreasonwhy it is so difficult to make any firm judgementabout systematicdifferencesin economicstructureis that there are large differenceseven amongthe presentEU members.For example,in terms of the shareof industry in GDP the rangeis large even only amongthe so-called'Club Med'i countries.In both Portugaland Italy the share of industry is rather high, at around 30 per cent of GDP. This cannot be considereda sign of high (or low) level of developmentsince Italy's GDP per capitais slightly abovethe EU averageand Portugal'sis the poorest member country. By contrast, industry is relatively much less importantin Spainand Greece,providing only around 15 per cent of GDP. As all thesefour countriesare alreadysuccessfulmembersof the Euro area there is apparently a very large range of economic structures that is compatiblewith membershipin EMU. On the basisof the limited datathat is availableit appearsthat the candidatesdo not fall outsidethis range. In terms of employmentthe differencesin economic structureswould appearto be larger, particularly with respectto Romania, Bulgaria and Poland, where a huge part of the labour force is officially employed in agriculture.However, while this will undoubtedlycreatesocial problemsin thesecountriesand problemsfor the CommonAgricultural Policy, it is less relevantfor the issueof EMU membershipsincevalue addedin this sector is sucha small part of GDP. Moreover,onecannotavoid questioningthe reliability of the dataandof the definitions usedfor identifying farmers,particularly concerningPoland and Romania.In the former communistcountriesmany that areclassifiedas farmers exercisethis activity only on a part time basis and it appearsthat their averageage is close to 60, so that their numbers will anyway be shrinking rapidly over the next few years.A comparisonwith the Club Med is again instructive. The average here is actually the same as for the Luxembourggroup as most Club Med countriessharethe characteristicsof many applicantsthat relative productivity is particularly low in agriculture (the sharein GDP is only a fraction of the sharein employment).The 1991 datafor Portugalshownin Table 3 are actually almostthe sameas the 1998 data for Poland, both for industry and agriculture. Thus the concerns regardingthe large sharesof employmentin agriculturefor the candidates are likely to be overstated. The Candidatesare still in Transition

Is this enlargementdifferent becausethe CEE-I0 are 'transition' countries, that is, countries that do not yet have an establishedinstitutional

145

HEALTH NOT WEALTH: ENLARGING THE EMU TABLE 3 ACCESSION COUNTRIES: STRUCTURAL INDICATORS (1998)

Percapita GOP in euro(% of euroarea per capita GOP) CzechRepublic Hungary Poland Estonia Slovenia Latvia Lithuania Slovakia CEE-8 (average) CEE-3 [Bu, Cz, Pol] (average) Bulgaria Romania Turkey

1991 data Portugal Spain Italy Greece ClubMed (average)

Percapita Shareof Shareof Employment Employment Oegreeof Exportsto GOP in industry agriculture in agriculture in industry openness EU(as% PPS(% in GOP in GOP (% of total (% of total (exports of total (%) (%) exports) of euro civilian civilian plus employment) employment) imports, areaper capita as %of GOP) GOP)

24 21 18 16 44 12 13 17 21 21

48 36 36 68 27 31 46 44 48

32 25 24 18 28 21 21 27 25 27

4 5 4 6 3 4 9 4 5 5

7 8 14

23 27 40

22 32 22 31 17 31 15 24

37.1 68.8

60

61.0 76.5 101.1 101.9 43.3 59.4 63.0 75.0

32.0 28.0 25.0 26.0 34.0 21.0 21.0 30.0 27.0 28.0

61 46 26 85 54 53 69 56 43

62 71 64 79 63 86 43 56 65 66

19 16 16

26.0 26.0 40.0 25.0 42.3 16.8

46 30 26

58 70 59

5 4 4 14 7

18

34 18 19 22 23

80 65 53 62 65

6.0 8.0 19.0 9.0 12.0 19.0 21.0 8.0 13.0 11.0

11

9 21 15

34 33 32 24 31

Source: ECB Monthly Report, February2000; EuropeanCommission,1999 RegularReports, StatisticalAnnex of EuropeanEconomyand 'The Agricultural Situationin the EU 1994 Report'. The data on employmentfor Estoniais for 1997. For Greecethe data is for 1993 (exceptfor the shareof agriculturein GDP which is for 1992).

infrastructurefor a marketeconomy?We would agreethat the institutional infrastructurein the accessioncandidatesis weakerthan in mostpresentED of low members.However,it seemsthat this weaknessis just a consequence level of income (per capita). Gros and Suhrckefind that the more advancedcandidatecountriesin Central Europe have institutional frameworks that are judged by foreign investors,and in surveys,as being 'normal' for their level of development (or even slightly better than one would expect).2There is little reasonto believe that progress will not continue as the overall catch-up process continues.Gros and Suhrckealso show that the more advancedcandidates have actually financial sectors that are appropriatefor their level of

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THE ENLARGED EUROPEAN UNION

development.In this areait appearsthat the transitionis over. This doesnot meanthat therecannotbe problemsin this area.The problemsthat erupted in the Czech banking sector over the last years serve as a reminder that seriouscorporategovernanceproblemsmight persisteven in systemsthat were regardedas rather strong. But a numberof EU countriesfaced rather similar problemsnot so long ago. Moreover, given the rapid paceof bank privatisation and take-oversby institutions from the EU (although this is sometimesstill politically controversial),most of theseproblemsshouldbe overcome soon. At any rate the screeningprocess should uncover any remaininginstitutional deficiencies.This will guaranteethat at the time of accessionthe candidatecountry shouldhavean institutionalframeworkthat is compatiblewith the smoothfunctioning of the EU. BENEFITS OF ENLARGEMENT

The public discussionin the EU-15 aboutthe budgetarycostof enlargement sometimes obscures the fact that enlargementshould bring economic benefits. Among the candidates,EU membershipis often just taken as an economicimperativeand detailedcalculationsof the economicbenefitsare not undertaken.However,if one wants to gaugethe long term perspectives of Central and EasternEuropeone has to have an idea of their likely size. How large will they be? This question is difficult to answer because everythingdependson the alternative.For example,if one were to assume that the CzechRepubliccould becomea sort of Switzerlandif it did not join the EU one would concludethat membershipdoes not bring this country any appreciableeconomicbenefits.For its neighbour,the Slovak Republic, one might assumeinsteadthat the country would go back into the orbit of Russiaand stop its reforms if it did not have the alternativeof becominga memberof the EU. Theseare admittedly extremeexamples,but they are usefulto highlight the generalproblemunderlyingall attemptsat measuring the welfare benefitsof enlargement. A further reasonwhy it is difficult to quantify the economiceffects of enlargementis that it affects all aspects of the economy. One cannot thereforejust look at the impact of a numberof separatemarketsand sum the results.This is why Baldwin et al. use a so-called'computablegeneral equilibrium' model taking into account the interactions between trade, labour marketsand investmentvia the capital marketsto mention only the most important elementsof this type of model.3 They assumein a first 'conservativescenario'that the main effect of EU membershipis to reduce the cost of trading betweenthe ten associatedstatesand the EU by ten per

HEALTH NOT WEALTH: ENLARGING THE EMU

147

cent and to eliminate trade barriers for agricultural products.4 The first elementis the key to their results.The ten per centreductionin tradingcosts reducestotal costsby 2.5 per cent sincein their model the startinglevel of the cost of trading acrossbordersis 25 per cent of the transactionvalue. With membershipthis is supposedto go down to 22.5 per cent. They find that under this scenarioreal income in the candidatestateswould increase by about 1.5 per cent and by only 0.2 per cent in the EU. The small impact on the EU is understandableif one takes into accountthat exports to the associatedstatesaccountfor about two per cent of the GDP of the EU-15. However, one would expectthe impact on the CEE countriesto be much larger becausetheir trade with the EU-15 accountsfor up to 25 per cent of their GDP.5 Moreover, the ten per cent reduction in trading costs is completelyarbitrary. Suchan ad hoc assumptionis actually not necessary, since, as we will show below, it is straightforwardto use existing detailed estimates. A gain of 1.5 per cent for the candidate states seems thus very conservative,given the estimatesthat havebeenmadeof the benefitsfrom integrationwithin the presentgroup of memberstates.Enlargementimplies essentiallyan extensionof the internal market and monetaryunion.6 The benefitsof thesetwo integrationprojectsfor the presentmembershiphave been estimatedand could be used as a guide. Recent estimatesof the transactionscost savings from the introduction of the Euro are in the neighbourhoodof one per cent of GDP.7 It is more difficult to estimatethe gain from participation in the internal market. Emersonfound that this shouldyield welfare benefitsof between2.5 and 4.5 per cent of EU GDP.8 Could one use this estimatefor the candidatesas well? Severalarguments would indicate that the benefits for the CEE countries should be at the higherendof this range,or evenlarger. The key considerationis that all the CEE countriesare very small economies,which should thus benefit more from the additional competition fostered by the internal market than the larger and more diversified EU economies.Moreover, integration and marketopeningin the EU hasproceededwell beyondthe sectorsconsidered in the initial '1992' programme. Even if one does not take into accounttheseelements,any estimateof the welfare gainsfor the CEE is boundto be higherthan that for the EC-15 since intra-EU-tradeaccountsfor about 15 per cent of EU GDP, whereas tradewith the EU accountson averagefor well over 20 per centof the GDP of the CEE countries.The benefitsfor the new membersshouldthus be at least one-third higher - 4.4-6.0 per cent of GDP for participation in the internal market and 1.3 per cent for using the common currency. Table 4

148

THE ENLARGED EUROPEAN UNION

TABLE 4 MEASURABLE BENEFITS TO THE CEE-JO FROM EU MEMBERSHIP (AS % OF GOP)

Commoncurrency Internal market Total

1.0 - 1.3 4.4- 6.0 5.4 -7.3

Source: Own calculationsbased on estimatesfor the EU-IS of the gains from a common currencyand an internal market.

providesthe detailsfor theseback-of-the-envelope calculations,which lead to the result that EU membershipshould yield a measurablebenefit of between5.4 and 7.3 per cent of GDP for the CEE countries.9 These measurablegains are already sizeable, but much larger gains can be obtained if one assumesthat membershiptransforms conditions under which the associatedcountries have accessto the world capital market.At presentinterestratesin the associatedcountriesare much above those in the EU, even for countries that have strong reputation for price stability like the Czech Republic, or a currency board, like Estonia. For other countries, such as Poland, the domestic real interest rate is even higher. Wheredoesthis risk premiumcomefrom? Baldwin et al. arguethat the risk premiumthat one currently observeson interestratesin the associated statesis not due to monetaryfactors, but to uncertaintyaboutthe future of reforms.1O The crucial assumption is then that only membership can dissipatethe doubtsin the minds of investorsand reducethis risk. Countries that are not allowed to become members would not be able to assure investorsabout the durability of their reform programmes.The size of the reductionin the risk premiumthat would comewith enlargementis difficult to pinpoint. Baldwin et at. use Portugal as an example and argue that accessionto the EU would imply a reductionin the risk premiumof about 15 per cent (that is, the real interestrate would drop from, for example,9.0 to 7.65 per cent). The result under this scenariois that real income in the associatedstates might increase by 30 per cent! This at first sight astonishingresult is actually not too surprising given that the models of capital accumulationusedby economistsimply that the long term capital stock is extremelysensitiveto changesin the real interestrate.II What should one think about these very large potential gains from membershiparising from a reductionin the risk premium?A first point to note is that this approachassumesthat investorswill only upgradethe new membersand not downgradethe existing ones.While this is possible,one could also argue that the new eqUilibrium of political forces within the

HEALTH NOT WEALTH: ENLARGING THE EMU

149

enlargedUnion will makeeconomicallysoundpolicies less likely. The loss to the EU from a slight increasein its risk-premiumcould easily exceedthe gains of new memberson account of a lower risk premium for them. Moreover, the quantification of the gain in the risk premium is totally arbitrary. The assumedalternative(continuinguncertaintyaboutreforms)is not likely for those countries that will actually be able to join first. The countriesthat will not be able to join becausethey cannotimplementthe acquiswould actuallybe thosewith the highestrisk premiumand thus those that would benefit most from becomingmembers.For thosethat have the choice,a reductionin the risk premiummight thus not be the first sourceof advantagesfrom membership. However, these illustrative calculations of the potential gains from membershipare useful becausethey highlight one importantaspect.There are certain gains from joining the internal market and EMU that can be quantified. Thesegains shouldbe in the neighbourhoodof five per cent of GOP for the associatedstates that are very open economies.But the potentially more importantgains are not quantifiable,and these comefrom joining an area that embodies through the internal market rules the principles of open competitionin the largestmarket of the world and that guaranteessoundmacroeconomicpolicies within the contextof EMU. This framework for sound ,policies should favour growth through a lot of channelsand might ultimately raiseincomeby evenmore than 30 per cent. But one has to admit that this is not a judgementthat can be proven with scientific methods. Another useful lessonfrom theseestimatesis that the welfare gains for the EU are also real, although much smaller in terms of the EU-15 GOP. Expansionto the eastwould increasetrading opportunitiesfor the EU-15. The CEE countriesaccountfor less than five per cent of the EU GOP and about 10-15 per cent of the EU's external trade. As the gain from the internal market is about 4-5 per cent of EU GOP, the gain to presentEU membersfrom the inclusion of the ten CEE countriesin the internal market and the Euro zone should thus be about0.4-0.5 per cent of GOP, or about 25 billion Euro per annum. This alone would be more than the total budgetarycost. Moreoverthe gains for the EU can only grow over time as the economiesof the associatedstatesgrow along with their trade. Their sharein the overall externaltradeof the EU hasalreadydoubledsince 1990 andon currenttrendsit could well doubleagainby 2005/6.At that point the estimatedbenefitwould be twice as large as it appearsfrom today'spoint of view. However, the budgetarycostswould not increaseproportionally. By the time the formal decisionon enlargementhasto be takenit is thus likely

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THE ENLARGED EUROPEAN UNION

that the economic benefits of enlargementto the EU-15 will even more clearly outweighthe coststhan theyalreadydo today. CONCLUSIONS

The main findings of this study are that the structureof the economiesof most of the candidates(the CEE-8 - that is, the CEE-lO less Bulgaria and Romania)are not so different from thoseof the currentEU-15 membersthat they would not fit into the EU, or the Euro area.Their legal andinstitutional frameworksaregenerallyof lower quality thanthe EU average,but they are also clearly better than one would expect given their low income level. Moreover, the candidatesare likely to benefit considerablyfrom EU and EMU membership.This suggeststhat the long term economicprospectsof the candidatesare rather good. They start from a low level of income, but they are likely to have healthy, growing economies,which might be better able to absorb shocks than the more establishedones of the richer EU membercountries. The position takenby many policy makerstoday is rathersimilar to the prevailing opinion during the early 1990swhen it was generallyassumed that only the strong core countries would be able to enter EMU and withstandthe rigours of price stability (andthat the poor countrieshadto be bribed by the Cohesion Fund). Reality turned out to be different. The 'peripheral'countriesare more dynamic than the core. A similar outcome shouldresult from enlargement.Indeed,a numberof studiesby investment banks, international financial institutions and independenteconomists suggestthat the combinationoflow income(andwages),marketaccessand a stable institutional framework for a market economy should lead to growth rates of around 4-5 per cent over the next decade. This is considerablymore than the 2-3 per cent growth usually expectedfor the (core) EU countries. While this would not lead to a quick catch-up, it suggeststhat the new membersare unlikely to have problems within an enlargedEuro area. A two speedEMU might thus emerge,but it will be quite different from what many expect,as the old 'core' economieswould be relatively stagnantcomparedto the CEE countries.There might thus be permanentconflict betweenthe core,whoseperformancewould call for low interest rates, and the CEE countries, whose higher growth (and higher inflation rates due to the Balassa-Samuelson effect) would call for higher interestrates.But fortunately this conflict is unlikely to causebig problems becausethe weight of the CEE in the Euroland economy is minor, and becauseexperiencehas shown that most countries are quite content to

HEALTH NOT WEALTH: ENLARGING THE EMU

151

accepta combinationof low interestrates,moderateinflation and, aboveall, strong growth. Hencethe CEE countriesare unlikely to pressstrongly for higherinterestrates.But theseconsiderationspoint to one sourceof tension that is unavoidable:convergencein income levels requiresfor some time divergencein growth rates. NOTES 1. Portugal does not have a coast on the MediterraneanSea, but it is neverthelessusually countedas an honorarymemberof Club Med. 2. Daniel Gros and Marc Suhrcke, 'Ten Years After: What is Special about Transition Countries?'(Centrefor EuropeanPolicy Studies,CEPSWorking DocumentNo. 143, May 2(00).

3. RichardE. Baldwin, JosephFran~ois andRichardPortes,'The Costsand Benefitsof Eastern Enlargement:The Impacton the EU and CentralEurope',EconomicPolicy 24 (April 1007), pp.127-76. 4. Membershipwill alsoforce the Centraland EasternEuropeancountriesto reducetheir tariffs on imports from the rest of the world. But since theseimports are small comparedto their imports from the EU this effect is not importantfor the size of the welfare benefits. 5. The shareof exports to the EU countries as a percentageof total exports in most of the candidatecountriesis well above60 per cent, the averagefor CEEC-8reaching65 per cent. 6. Sinceagricultureaccountsfor only a minor fraction (6-10 per cent) of GDP, the gainsfrom freeing tradein this sectorcannotbe large in relation to GDP. 7. See also Chapter7 in Daniel Gros and Niels Thygesen,European Monetary Integration (London: Addison Wesley Longman1998). 8. Michael Emerson,Redrawingthe Map of Europe (London: Macmillan 1998). 9. Four to five times the amountfound by Baldwin et al., 'The Costsand Benefits'.Moreover, a large part of the gains in real incomefound by theseauthorsdo not correspondto welfare gains since they result from increasedcapital accumulation,which does not come for free (like the transactionscosts savings from a common currency) but requireshouseholdsto postponeconsumption. 10. Baldwin et al., 'The Costsand Benefits'. 11. For details, see Daniel Gros and A. Steinherr, Winds of Change, Economic Transition in Central and Eastern Europe (London/Cambridge,MA: Longman and MIT Press2001), Chapter11.

The Welfare State in Transition Economies and Accessionto the EU HANS-JURGEN WAGENER

Eastern enlargementof the European Union will create a new, southeastern,peripheryof the Union, a peripherywhich is partly situatedcloseto the economic core. It has been shown that distancefrom the core, be it Brussels or Dusseldorf, is a factor strongly influencing economic convergenceas it happenedin WesternEuropeafter World War II. I Under normal conditions,countrieslike Czechoslovakia,Sloveniaand, of course, EasternGermanyshouldbe on a productivity level comparableto Western Germany,Austria and Italy, with countrieslike Polandand Hungary on a level perhapscomparableto Spain. Such was the situation immediately before and after the war.2 However, conditionsin EasternEuropewere not normal - the region cameunder the hegemonyof the Soviet Union and it was forced to adoptthe Soviet political and economicsystem.So it did not take part in the impetuousconvergenceprocessthat has characterisedthe economicdevelopmentof WesternEuropefor the last 40 years.The present productivity level is at best50 per cent of what it could havebeen.Eastern Europemovedaway from EuropeandEasternCentralEuropefrom the core of it. Peripherisationis the result of 40 yearsof communism. After the collapseof Soviet hegemonyand of the Soviet-typesystem, the countriesof EasternCentral Europe(ECE) immediatelydeclaredtheir intent to 'return to Europe', which meansabove all catching up with the post-war political and economic development.A central feature of the European economic andpolitical systemis the welfare state.Despitea great diversity in its institutional arrangements,there is a commoncommitment and there are sharedvalueswhich allow us to speakof a Europeanwelfare state that can clearly be distinguished from the Anglo-American and Japanesesocial cultures. With the abolition of the market and private striving for profit as driving forces of the economicsystem,the Soviet-type economymadesocialpolicy pointless- therewas no longeran autonomous economic sphere whose working and results were to be regulated,

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complementedor changed by political power. Hence, the communist welfare state, if there is such a thing (for let it be clear, a high shareof educationand healthservicesin final demandand an incomedistributionin favour of the non-active or poorer parts of the population do not in themselvesmake a welfare state) must be somethingcompletelydifferent from the Europeanwelfare state.This is true even if social justice, one of the shared values within the latter, was also one of the catch-wordsof communism. Return to Europeposesa double task for thosewho endeavourto make thejourney: the transformationof the political andeconomicsystemandthe catchingup of productivity levels. Neither is independentof the other. For, as the theory of conditional convergencesuggests,3convergenceclubs are defined by their systemicproperties.What is not undisputed,of course,is whetherthe Europeanwelfare statebelongsto theseessentialproperties.So it may be assumedthat on their way back to Europethe countriesof ECE have more degreesof freedomin this respectthan in otherswhere there is theoreticalconsensusand a well definedacquis communautaire. Seenfrom the side of the incumbentmembersof the EuropeanUnion, the return to Europeof the ECE countriesis treatedas easternenlargement of the Union, the mostcomprehensive enlargementproject since 1973 when the United Kingdom, Ireland and Denmarkjoined the Europeof the Six. At that time basicconditionsfor accessionhad beenformulatedwhich, for the present case of eastern enlargement,have since been restated at the Copenhagensummit. Next to the generalconditions of democraticrule of law and a functioning market order, it is the acquis communautairewhich erects the highest barrier to entrance to the Union. The Copenhagen conditionsalso mentionedcompetitiveness:the accessioncandidatesshould be able to withstandcompetitionfrom the Union and the Union shouldnot suffer unduly from competitionfrom the accedingcountries. It is generally thought that theseconditions pose little problem in the contextof social security.While the Economicand MonetaryUnion (EMU) is a highly developedpart of the acquis(not in all its elementsobligatory as membershipofthe Euro-blocshows),the EuropeanUnion is not yet a social union and will not be so for the foreseeablefuture. Convergenceof social conditions will be the outcomeof economicconvergence;it cannotbe its precondition.Hence,candidatecountriesare free to choosewelfare regimes which they think appropriatefor their stageof developmentand their social culture. Some advisers recommend- and some critics fear - that ECE countries should orient themselvestowards American flexibility and low key welfare provisions, thus becoming model cases of growth and

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efficiency, in oneview, or Trojan horsesin the raceto the bottomof welfare, in the other. Even if the social acquis is not very comprehensive,however, it is far from being an empty set.It canbe ascertainedon four levels. First, the level of the single market with health and safety prescriptions;second,the level of the social protocol which has been incorporated in the Treaty of Amsterdam with, for example, working time and equal opportunity regulations;third, the level of social dialogue,such as the rules demanding social partnership;and, fourth, the level of what is called the 'soft acquis', that is, somekind of Europeansocial culture that cannotbe madebinding for any candidatecountry, but which it is expectedto share. It is obviousthat someof the elementsof the social acquisimply costly investmentson the side of the less developedcandidatecountries.On the other side, competitionfrom low wageand low social cost labouris a point of concernin someincumbentmemberstates. The remainderof this study will attemptto assessthe measurestakento transform the social security system in the post-communistcountries of ECE. The guiding questionshould be whetherby enlarging the European Union in this direction, the acquis in its broadermeaning,not as a body of legal regulations,but as an economic and social culture, comes under a threat. In the next section a brief survey of the starting conditions, the communist welfare state, is given. Transformationof the social security systemcan be divided into two phaseswhich will be discussedin the third and fourth sections.This is followed by some considerationsconcerning harmonisationconditionsof access,and then a brief conclusion. THE SOCIALIST WELFARE STATE

It has becomecommonto begin any reflection on the post-socialistwelfare state with Kornai's dictum that the Hungarianand, implicitly, the socialist welfare state in general,was born 'prematurely',that is, the countriesof EasternEurope introducedlavish welfare measureswithout the necessary economicbasisor a correspondinglyhigh level of GNP.4 This statementis in contrastto the receivedpre-1989opinion that the socialistwelfare state, as far as size and scopeare concerned,was very much in line with Western developments,thus confirming the then popular convergencehypothesis.5 Such inter-systemcomparisonssuffer from several shortcomings: GNP comparisonsare on a very shaky basis becauseof price and quality problems, and the organisationof the welfare state is so different that quantitativeevaluationis almostimpossible.A secondremarkwith respect

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to Kornai's dictum refers to the fact that developmentis not the only determinantof welfare statesize. Ideology, or sharedopinions and values, is a secondfactor whichhasthe effect that, also within the West,continental ideas about social security differ from Anglo-American ones, and ECE, alreadybeforethe communisttakeover,sharedthe continentaltradition. But even on the European continent we find different levels of welfare provision. The latecomersto social security,Swedenand The Netherlands, for example,have much more comprehensive systemsthan, say, Germany and Austria. Also in the East commitmentto social security and equality differed in the pre-communistas well as in the communistperiod, with Czechoslovakiacaring more for both than did Poland,for example. Be that as it may, if not lavish - there was nothing lavish under communism,not even the fringe benefitsof its ruling class- the socialist welfare statewas comprehensiveand sizeable.However,it was a worker's privilege ratherthan a citizen'sright. In daily life, of course,the difference was minimal, since almost everybodywas a worker. Thosewho were not, but were working people, got incorporated intothe socialist welfare state rather late and under special conditions: kolkhozniki in the Soviet Union, private farmers in Poland, private small scale entrepreneursin the GDR. The close link betweensocial security provisions and the worker status derivesfrom the first and foremostproperty of the socialistwelfare statefull employment.The full employmentguaranteewas madepossibleby the specific role of the firm in the socialistsystem,this being primarily a social unit rather than an economicone. Without any competitive pressureand with a stateguaranteeof existence,the state-ownedenterprisecould provide any wished-foremploymentand take over many of the tasksof the social security system. Since, as a rule, these firms were big, they also had a regional function and could adopt local administrative tasks which otherwisewould rest with the local communalor provincial administration. A secondsocialsecurityshort-cut was the practiceof price subsidieswhich, incidentally, makesthe calculationof the size of the socialist welfare state so cumbersome.By fixing only symbolic pricesfor the necessitiesof daily life, such as food, clothing, housing and public transport, the socialist welfare state was convinced to have solved the problem of poverty and hencedid not needany carefully designedtargetedmeasures. Technically, the formerly independentsocial insurancesystems- in ECE more or less closely following the Bismarckian model - were incorporatedin the state budget and state administration.The firms were paying the workers' contributions into the budget and they, or more preciselythe enterpriseorganisationof the tradeunion, were administering

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the claims of their workers. Pensionswere rather small, thus inducing an additional labour supply, and they had the special problem of hidden inflation: the older a pensionclaim, the smallerits real value. Health care was directly providedby the state-a statisticallycomprehensiveprovision that suffered from low quality and under-financing, leading to the widespreadpracticeof side-paymentsby the clients in order to get proper and timely treatment.Education was the pride of communism.In short, economicsand politics and, in this case,economicpolicy and social policy were not separated.The workers stood under the protectiveguaranteeof a paternalisticstate,and were free of any responsibility. Obviously, this systemcould not continueoncethe transformationfrom socialist planning to capitalist markets had come on the agenda. Neverthelessit is commonknowledgethat the transformationof the social securitysystemwas not amongthe priority objectivesof reform policy and 6 This needs a brief could be treated as second order phenomenon. explanation.Indeed,the transformationprogrammespreferentiallyaimedat stabilisation,liberalisation,privatisationand, whenthe objective 'institution building' was made concrete, it was the introduction of a functioning bankingsystemandcapitalmarketsthat got pride of place.Implicitly it was thought that the new economic regime had inherited an operating social securitysystemfrom the old regimewhich it could then deal with when the priority objectives had been settled. Typically, Leszek Balcerowicz's accountof the Polish transformationprocessdoes not include the terms social security and welfare in its index, nor do the topics show up in the text,? In the early 1990s they were not important, although, especiallyin Poland, they were soon to becomeso. Indeed, stabilisation,liberalisation and privatisationthoroughly changedthe inherited social security system. For with thesepolicies was brought about the separationof economyand polity, thus assigninga completely new and purely economicrole to the firm. Liberalisationhad two effects. It separatedthe firm from the stateand transformedit into an independenteconomicunit with (more or less) hard budgetconstraints.In orderto survive in the market,firms, evenif they still were state-owned,hadto cut all costswhich werenot necessarywith respect to commercial production. Overstaffing was reduced immediately and unnecessarysocial provisions were relinquished. Transition to the new systemmay havebeeneasedby somebudgetsubsidiesor soft bankcredits, especiallyfor big old firms. But stabilisationputs limits to such softening measures,sincethey inevitably haveinflationary consequences. As a result, unemploymentwas unavoidableand unemploymentbenefits becamean

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immediate necessity. At the same time, the decline of formal sector employment reduced the revenues of the social security system. This decline was not uniform allover the region. While in the CzechRepublic the lowest level (1989 = 100) was reached at 89.7, in Hungary the correspondingfigure was 69.8.8 It is easyto imagine that the strain on the welfare state was much more serious in Hungary than in the Czech Republic. Further, certain social services,up to then providedby the firm, either got out-sourcedor disappearedaltogether. Effective privatisation reinforcedthis tendency. The secondeffect of liberalisation was the freeing of prices which, togetherwith stabilisation,also meantthe discontinuationof price subsidies for life's necessities.Where nominal wages or transfer payments were inflexible, real incomesmust havedropped,occasionallyunderthe poverty line. At the sametime, the pension,health and educationsystemscould be continuedfor the time being in a more or lessunreformedway, transferring only the administrativetasksfrom the firm to the statewhich did not have the appropriateadministrationto start with. Social policy, above all the pension system, has been used in the first phase of transformation to of the cushion or to compensatefor the immediate social consequences transitioncrisis.9 The crisis being an unexpectedphenomenon,governments may have worked under the assumptionthat the rather rapidly increasing costsof suchmeasuresto the social securitysystemwould be of a transitory nature.Only when and whereit turnedout that this is not the casedid fiscal problems move social policy to centre-stage.In short, unemployment benefits, social compensationand the technical administrationof welfare benefitswere of first-phasetransformationconcern,while the basicmodels failed to get on the agendabeforethe secondphase. TRANSFORMATION OF THE WELFARE STATE

Transformationof the welfare state has an important preliminary stage: transformationof the state. This is by no meansa trivial affair. The old communiststatecrumbledthroughoutthe region,andyet the transformation of the political, economicand social systemscould only be accomplished underthe guidanceof a strong state.The solution to this conundrumlay at the roots of transformation success.Successfultransformers, after the inevitable transitionalcrisis, resumedeconomicgrowth and accomplished in-depth structural changes. These countries have comparatively well establisheddemocraciesand effective governmentsand are typically to be found in Eastern Central Europe. Less successful transformersdid not

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overcomethe initial crisis and slid into a protracteddepression.In these countries state governanceis weak, is very often capturedby particular interests, and is unable to perform its normal functions. Such casesare typically to be found in the former SovietUnion (FSU), with Russiaand the Ukraine being the most spectacularcases.As a result, thesecountriesare situatedin a kind of limbo: the stateis weak and poor and cannotlive up to the expectationsof the population. Compensatorysocial policy as a responseto the transition crisis is out of the question. The firms, albeit privatised, are not fully restructuredand operatein what has beencalled a 'virtual economy'.10 Workers are stayingwith their old firm evenif they do not get paid, since certain welfare provisions,such as housing,are still on offer. For the rest, the citizens have to look after themselves,which effectively meansthat large stratafall into poverty. It is thereforetypical for the FSU countriesthat poverty has increased significantly during the 1990s, while in ECE this has happenedonly moderately: the incidence of poverty increased between the periods 1987-88 and 1993-95 in Hungary from one to seven per cent of the population,in Polandfrom six to ten per cent, in Estoniafrom one to 34 per cent, in Romaniasix to 48 per cent, and in Russiatwo to 39 per cent." The 12 This is not the place to inequality measuresshow similar developments. speculateabout why statetransformationsucceededin ECE rather than in the FSU. Many factors may haveplayeda role, amongwhich geographical, historical and institutional proximity to the EuropeanUnion, or the West in general,figure prominently.13The expectationof membershipin the EU in due time servedas a transformationanchorfor the political and economic systems,as well as for the social security system. With respectto many institutional aspectsthe anticipationof accessto the Union predeterminedthe choices of the transformationcountries in ECE. This was not the casewith respectto the welfare system,however. That said, econometricresearchhas shownthat a dummy variable 'Europe' is positively correlatedwith the shareof governmentexpenditurein GNP,14 reflecting what is perhapsa particular Europeanwelfare culture. Indeed, thereis a generalcommitmentin the EU to social security,eventhoughthe 'responsibilityfor organizingand financing of social protectionsystemsis in the handsof MemberStates'.15 This statementrefers to the greatvariety of welfare systems within the Union and their deep political-historical entrenchment,a featurewhich makesevenmarginalreformsa very difficult andoften impossibleendeavour.For the transformationcountries,however, it implies that they may choose between different models of welfare systems,and liberal reform advisers are warning against restricting the

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choice only to European models, thus disregarding the East Asian experiences.In this view, high governmentexpenditure,and high welfare expenditurein particular,is considereda threatto economicgrowth.16 When social expenditureis disentangledfrom capitalexpenditureand government consumption,on the other hand, only the latter can be connectedwith negativegrowth effects, while both former categoriesare seento improve growth prospects.17 Nor does the growth record of the successful transformation countries in ECE, which have somewhat developed 'European'welfare systems,corroboratethis hypothesis. Following Esping-Andersen,18 it hasbecomecustomaryto identify three worlds of capitalist welfare systems, distinguished from one another according to the commodification of labour, the matrix of social equity (stratification vs. equalisation),and the pUblic-private welfare mix. The first of theseis the liberal model,which tries to avoid poverty by a minimal safety net and leavesthe rest to private responsibility and initiative - the mostprominentexamplebeingthe US, with a shareof public social security and healthexpendituresof 14.6 per cent of GDP in 1990. The secondis the conservative-corporatistmodel which adheresto the contribution-related benefit criterion of mandatory insurance-typeregimes and subsidiarity betweenfamily, firm and the state- Germany'sRhenanianmodel being a typical example,with public social securityand healthmeasuresaccounting for 23.5 per cent of GDP in 1990. The third model is the Scandinavianor social democraticwelfare statemodel, which guaranteessocial citizenship rights and adheresto the redistributiveability-to-pay criterion - Swedenis the bestknown example,with 33.1 per centof SwedishGDP being devoted to public social security and health expendituresin 1990.19 As always with ideal-type distinctions, borderlines between systems are more fuzzy in reality. But the difference sizes of the examples certainly testifies to significant differences. It was generallyexpectedthat the transformationcountriesin ECE, or at least those of their political parties with leftist inclinations, would be attractedby the Scandinavianmodel of the welfare state.On the otherhand, liberal reformers and some of their Western adviserswere enchantedby Margaret Thatcher'santi-welfare state rhetoric, or at least by that of her favourite social philosopherFriedrich von Hayek. Indeed, Vaclav Klaus' dictum of a market economywithout adjectives,and in particular without the adjective 'social', becamenotorious.Not surprisingly,it was found that neitherthe one nor the other preferencecould be found within the political practiceof the transformationcountries.The liberal rhetoric has not led to uncompromisingliberal models,even in the CzechRepublic, despitesome

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claims to the contrary,20with the difference betweenrhetoric and reality being dubbed the 'Klaus-paradox'and being adequatelyexplained as a political compromiseby Milller.21 Nor did the enlightenedleft in ECE - the orthodoxcommunistleft in Russiaand Czechoslovakiainsistedon the old socialist model - propagatethe social democraticwelfare state model. It seemedtoo close to the old model, it was unsustainablein the economic situationof the transitioncountries,it did not conformto the marketsystem which was the primary objectiveof transformation,andit seemedto be in a crisis in its own countriesof origin.22 So what was then the guiding line? As Cook et al. put it: 'Add Beveridge-styleminimums to a fundamentally social insurance-basedwelfare system, and you have the social market model pushedby the left in contemporarypost communistEurope.'23With a somewhatstrongeremphasisupon the statewelfare system,suchwas also the result of the first transformationphase. It is a clear result of path dependency:the Bismarckiansocial insurancemodel was predominantin the region before the communisttakeover,and the statewelfare systemis characteristicof the communistsystem,as we have seen. The first stepin welfare systemtransformationwas a partialreturn to the pre-warregime: a re-institution of the Bismarckiansocial insurancewhich formally, but not materially, had survived in some countries under the communistregime. Such reforms were distributedover the whole ten year period of the 1990s: Hungary and Czechoslovakia, for instance, reintroducedhealth insurancefunds at the beginning of the decade;in Poland a similar reform became effective as of 1 January 1999. The Bismarckian model is less redistribution and more contribution-related, while the public still expected a broad protection against risks, an expectationwhich was honouredby writing basic social rights into the new constitutions.This was a major achievementcomparedto the communist regime: linking the welfare statewith the rule of law and thus giving the constitutionalcourts a say in social policy. Of course,the adaptedsystem came quite close to the continentalconservative-corporatist model, and it may be questioned whether the choice was made deliberately to accommodatethe median voter,24 or whetherit was the rather ad hoc and often contradictory result of some fiscal specialists' efforts to keep the social security systemgoing underthe new conditions.25 Most countries formally succeededin separatingthe social security funds from the state budgetproper, albeit not necessarilywith their own legal statusand self-administration,and separatingthe pensionfunds from health care insurance. Yet the weak level of contributions due to unemployment,shadowactivities and non-compliancecould not make up

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for the increasedexpendituresand henceconstituteda considerableburden to the state budget. Subsidieshad to cover the deficit. If the communist welfare statewas not living beyondits means,the post-communistwelfare state certainly was. In Poland, the most extremecase,the shareof social expenditurein GOP increasedfrom 17 per cent in 1989 to 32 per cent in 1995. Less dramatic increaseshappenedin the Czech Republic, Hungary and Slovenia.26 These increasesare mainly due to unemploymentand pensionbenefits.The shareof the latter in GOP increasedover this same period in Polandfrom 6.6. to 14.6 per cent, in the CzechRepublicfrom 8.3 to 9.1 per cent, and in Hungary from 9.1 to 10.6 per cent.27 The reasonsfor such a short term rise were of coursenot demographic,but policy-related. The sharesof health and educationincreasedbetween 1990 and 1993 in Hungary and the Czech Republic and then diminished in the former and stabilisedin the latter. In Poland it remainedmore or less constanton a somewhatlower level.28 According to anotherestimate,the shareof health care expenditurein GNP went up by almost three percentagepoints in the CzechRepublicafter 1992,while in Hungaryit decreased by 2.5 percentage points.29 In both thesecountriesthis sharewas significantly higher than in Poland where the old tax-financed and state-run health care system remainedin force till the end of 1998. Needlessto say, the situationin FSU countries, notably Russia, the Ukraine and Moldova, was completely different. It would be wrong to state that the health and education systems remainedmore or less unalteredin the sensethat they remainedgenerally poor. The Czech Republic, Hungary, Slovenia, and recently Poland, introducedmandatoryhealth insurancesystemsand startedto decentralise and partly privatise provision of health serviceswhich, however, is still predominantlya stateor communalaffair. But the quality of services,here as in education, dependson capital and labour. The former is urgently neededfor thorough re-equipping, the latter was notoriously underpaid underthe old system.Given the fact that the shareof healthcareexpenditure in GNP is slightly above eight per cent in Hungary and the Czech Republic,30and henceon a Westernlevel, the problemappearsto be lessone of additional meansthan of a fundamentalrestructuringof the sector. In Polandthe systemseemsto be under-financed,as stated.Again, we notice a huge difference in the health statusof the population betweenthe FSU, where the state literally collapsed,and ECE, where the situation did not improve significantly but was more or less stabilised.31 One reactionto this stateof affairs is a creepingprivatisationand commercialisationof health services:the more deficient the services,the soonerthe generalpublic, or

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that stratumthat can afford it, is willing to finance private treatment.This happensfrom Polandto Bulgaria and, naturally, in Russia.The mounting costs of the pensionschemesin ECE are due to different reasons,among which hidden unemployment,indexing (to rising prices, not to falling real wages), and policy pressuresare prominent. The differences within the region are considerable.So the relative income position of pensioners during the period 1987-88and 1992-93improved in Polandand Slovenia, remainedmore or less unchangedin Hungary, Slovakiaand Romania,and deterioratedin the Baltic states,Bulgaria and the Czech Republic.32 The problem of ageingcould have no impact in so short a period, but will, of course,make itself felt in the future. In short, there are severalmotives, mainly fiscal and systemic,not to go on muddling through,but to enterthe second phase of transformationby reforming the welfare state, and by starting with the pensionsystem. SECOND PHASE REFORMS OF THE PENSION SYSTEM

Fiscal and systemic problems with the welfare state, especially in the contextof an ageing society, are not unique to ECE. Similar questionsare also confrontedin the presentEU memberstatesand elsewhere.The naive outsideobserver couldpresumethat, given the stageof developmentand of political and social culture of the Union, the member stateshave found solutionsthat are superiorto the inherited Anglo-American,continentalor Scandinavianmodels,and that could be imitated by the young democratic marketeconomiesin the East.Nothing could be further from the truth. The inherited welfare state systemsof the West exhibit a remarkabletenacity, due on the one handto the fact that they resultfrom a long and fierce social struggle in the past, and on the other to the fact that the presentpolitical systems whichhave to agreeto reforms are highly complex and delicately equilibrated matrices of interests - less friendly critics speak of Eurosclerosis- with the effect that changeshappen,as a rule, in the margin, and that radical systemtransformationsare ratherdifficult to achieve.As noted above,the Union itself has very little competenceand leverageto develop and imposeown ideasabout social security, and the Treaty of Amsterdam (art. 136 and 137) makesit very clear that national preferencesare to be observedand that eachmemberhas a right of veto in this field. The situation is quite different in the so-calledemerging markets, to which the transition countriesbelong. In addition, there is an international institution with outspoken ideas about the welfare system and with considerableleverageto make itself heardin thesecountries- the World

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Bank. The characteristics of the pension system favoured in the environmentof the World Bank33 follow from the so-called Washington consensus,34which is based upon fiscal stabilisation, regulative liberalisation and organisational privatisation - the very objectives of transformation in ECE. It should be mentioned that the Washington consensusdoesnot containrecommendations with respectto social security, either becausethere was no consensus inthis areaor becauseit was then considered of secondary importance. Nevertheless,fiscal stabilisation, regulativeliberalisationand organisationalprivatisationclearly provide the theoreticalbasis of World Bank institutional policy recommendations.For the pension system this implies a three-pillar modeP5 with a minimal poverty-targetedfirst pillar on a pay-as-you-go(PAYG) basis,a mandatory privateinsurancesecondpillar on a fully funded (FF) basis,and a voluntary private insurancethird pillar. The difference with the prevailing European systemsis to be seen in the shift from the first to the second pillar privatisation and an individual contribution-related scheme where the arrangementcanbe personalor occupational.Upon closerinspectionwe see that the stressis lying on privatisation. For, if not perfectly, the venerable Bismarckianmodel (which seemsnever to have beenfully understoodby the Washington advisers who confound it with the Beveridgian welfare state) was individual contribution-relatedand was fully funded. However two spells of high inflation in twentieth century Germanyhave diluted the funds (and shownthe dangersof sucha systemif it is not backedup by the state) in such a way that it could not be practisedeven while still formally in force (up to 1957). The objective of the World Bank model is not only old age income security,but enhancedeconomicgrowth.36 It is assumedthat fundedsystems will produce a higher savings rate than PAYG schemesand that funds accumulatedin private insurancecompanieswill playa more active role in the capitalmarketthan funds accumulated ina public pensionsystem.From this follow the logic and the dilemmaof the model: emergingmarketsneed capital for growth, but their capital markets,and their financial stability in general, are poorly developedand very sensitive. However, the idea of combining old age security and increasedcapital accumulationmust be attractive in the transition countries that are eager to catch up with the EuropeanUnion. A radical implementation of this 'new pension orthodoxy',37 as happened1981 in Pinochet'sChile, would imply almosta return to the prewelfare stateworld with individual responsibilityand poor laws, were it not for the mandatory character of the private insurance. It would not

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correspondwith, at leastin Europe,the evolvedideathat it is exactly in the contextof long term welfareprotectionthat individual decisionmaking and the marketneedsomesubsidiarystatesupport,or with the Europeansocial security culture that includes a strong elementof solidarity. Nor can there be any guaranteethat a systemrelying almost exclusively upon the capital market would be able to provide the hopedfor long term income security. On the other hand, a reconsiderationof the public-privatemix is deemed necessaryin many countries and 'three-pillar' models are discussedand adoptedall over the world. It was particularly Argentina which succeeded in 1994in transformingits state-dominated pensionsystemby a democratic decisionmaking processinto a complementarypUblic-privatesystem. This is not the placeto analysethe merits and demeritsof PAYG andFF systems,however, or their possiblecombinations,or their introduction or reform. Suffice it to say that the EU Commissionis also recommendingan 'appropriatebalancebetweenfundedandPAYG (pay-as-you-go)systems'.38 The Commissionis motivatedhere by its concernboth for macro-stability within the EMU and for more employment-friendlyflexibility in the labour market. Both thesemotives must playa decisiverole in EasternEuropean pensionreform considerations. The first phasepensionsystemreforms in ECE had achieveda certain formal, althoughnot financial, separationof pensionschemesfrom the state budget (with the exception of the Czech Republic, where the pension systemwas in surplusand was happily usedby the statebudget),the (re-) introduction of employee contributions, some kind of indexation arrangements, andsomebasicparameterchanges(for example,replacement rates).The secondphasepensionsystemreforms can be groupedin three clusters:39 first, parametricchangesof the existing PAYG system;second, notionally defined contribution schemes;and, third, notionally mandatory fully funded schemes. Parametricchangesof a PAYG systemcan imply very different things. In most parts of WesternEuropeit has meant,up to now, a tinkering with replacementrates,the pensionformula, or the retirementage.All this is also donein ECE. But when the changeimplies a switch from a Beveridge-type tax-financed general fixed pension to a Bismarck-type contributionfinancedand contribution-relatedpension,we may speakof a more radical change.The problemsof sucha transitionare financial, for the first scheme was strongly redistributive,while the latter is meantto be lessso. However, if the flat rate pensionwas close to the subsistenceminimum, which as a rule it was in the whole region, a contribution-relateddifferentiation of retirementbenefitsrequiresadditionalfunds.

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Notionally defined contribution (NDC) schemesare, in fact, a radical paradigm shift within the public pensionssystem that in this way loses much of its PAYG character.The basicideais rathersimple: eachemployee has his or her own capital accountwith the public social security system where the contributions, be it employers' or employees' or other contributions, are registered. But these individual capital accounts are notional: no real funded accumulation takes place. At the end of the working career,the accumulatednotionalcapitaltogetherwith the statistical life expectancydefine the actuarially fair pensionbenefits.The systemhas several advantages:it is contribution-related,its claims can be carried acrossstatebordersby employees,and the risk of demographicchangeis not carried by the paying, but by the receiving generation(in the present context of ageing populations,many people considerthis an advantage). This innovation was developed by Swedish pension specialists and pioneeredwith the help of Swedishadvisersin Latvia in 1996,beforeit also becamea core elementof the Swedishpension systemreform passedby parliamentin 1998.40 The new Swedishsystemmay be called a four-pillar systemwith a tax-financed(and means-tested)minimum pension,a public tier along the lines of the NDC principle, a mandatoryprivate FF tier and voluntary private provisions. Although this model may gain paradigmatic character in the future, its introduction was greatly helped by special Swedishcircumstancesthat do not prevail everywhere.By consideringthe introductionof a mandatoryprivateFF tier, the presentGermangovernment is also headingfor a four-pillar system:povertyrelief by social assistanceis a communalresponsibility,the core institution is a public PAYG insurance schemethat is meantto be supplementedby a mandatoryprivate FF tier, and the systemis roundedoff by voluntary private provisions. The introduction of mandatoryfully funded schemesin EasternEurope is a very specialcaseof institutional transfer.Unlike many other instances where the acquis communautaire has shaped the paradigm for transformationtargets,the transferoccursin this casefrom Latin America to EasternEurope- with the help of intermediationand supportfrom the World Bank. As noted, there is in fact no acquis communautairewith respectto pensionschemesin the EU, and the current memberstatesare themselvesconfrontedwith the needto reform their old age provisionsfor demographic,fiscal and market-relatedreasons. Moreover, contrary to receivedwisdom in political science,41it turns out that by comparisonto the establisheddemocraciesin WesternEurope,the new democraciesin Latin America and Eastern Europe encounterless resistancefrom entrenched interestswhen determiningand implementingradical reforms. The Danish

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population, for example, which enjoys the most comprehensivetaxfinancedpublic pensionscheme,inevitably lives underthe impressionthat they have a lot to lose through any reform, and hence will resist it. Resistanceto reform is moderatein ECE, however,42and does not impede some radical changes which may still be associatedwith the general expectationthat in a 'periodof extraordinarypolitics'43theremay be a lot to be gainedby transformation. The most radical reform in transition countries has been introduced, following the Chilean precedent,in Kazakhstanin 1998. The whole CIS region is full of problems of its own, not least that of serious payment arrears and, consequently,widespread poverty among the aged. Such problemsare not solved by radical privatisation. Of more interestare the Hungarian and Polish reforms which implemented truly 'multi-pillar models' combining a PAYG tier with a mandatoryfully funded insurance. The Hungarianreform cameinto force in 1998.In fact, it yields a four-pillar system which, as we see, seems to become the rule in Europe. It supplementsthe dominant and still to be reformed public PAYG system with a mandatoryprivate insurancetier. At the low end there is a means testedminimum pension,and at the high end a voluntary 'third' pillar. The difference between mandatory private pension funds and voluntary insurancecontractscan be seen,here as elsewhere,in the scopeof prudent regulation. Of course, the whole financial sector of banks and insurance companies is carefully regulated and supervisedby the state in well functioning market economies. Legislating mandatory private pension funds gives the state a special responsibility to guaranteesolvability and liquidity which it will fulfil by additional prudentregulation.Here we can establishone of the core featuresof welfare state privatisation: the state partly retreatsfrom own provisionstransferringthe productionof services to competing private enterpriseswhich are, however, carefully regulated and controlledto protecttheir clients. The risks of the marketand of market failure (bankruptcy,adverseselection,moral hazard,the latter two playing an even more important role in health insurance)cannotbe borne by the individual citizen. Elementsof redistributivesolidarity which are implicitly presentin welfare statearrangements will only in exceptionalcasesbe taken over by the private providers. They will have to be made explicit and organisedin targetedstatemeasures. In Polandthe new systemcameinto force in 1999. The first public tier itself underwenta thoroughreform: its organisation- the ZUS which also coversdisability, sicknessand accidentrisks - was separatedfrom the state and got its own legal status,it is financed by employers'and employees'

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contributions, and it pays benefits according to the notional defined contribution principle. It is supplementedby a minimum pension,which may be seenas a pillar of its own in orderto avoid poverty amongthe aged. The secondpillar is a mandatoryfully funded tier managedby strictly regulated private pension funds. It is financed only by employees' contributions and, naturally, disbursescontribution-definedbenefits. The third pillar, as everywhere,is composedof voluntary individual old age provisions.Contraryto the Argentinemodel, membershipof the secondtier is not optional in Poland (except for the transitory period and people of intermediateage). In the final state,eachemployeewill pay contributions into, and obtain benefits from, both sources. According to present legislation, the first public PAYG tier is dominant.Indeed,resemblanceto the Swedishreform cannotbe ignoredand Swedishadviserswere active in the country. The transition to a new pensionsystemis a lengthy and costly affair, since notional as well as real funds have to be accumulatedand benefits must be paid in the meantime.So it is not to be expectedthat the state budgetwill encounterany appreciablerelief of the welfare stateexpensesin the short run. In addition, transitory arrangements,the details of which we have omitted in this brief overview, will be and, in the countriesthat have taken the reform steps,alreadyare rather complicated,and are difficult to graspfor the generalpublic. Secondly,thesereformsput a heavyburdenon the administration: administering those transitory arrangements, administeringNDC accountsand implementingprudentregulationrequire experiencedpersonneland expensiveequipment.Thirdly, private pension funds will flourish only in an environmentof strong and stable capital markets.It remainsto be seenhow HungaryandPoland,andtheir followers Bulgaria, Latvia, Croatia and Macedonia, will get along with these problems.It is not purely hypothetical to fear that Kornai's dictum of a prematurewelfare state comestrue in the end in the form of a premature radical welfare statereform. WELFARE STATE ACCESSION PROBLEMS?

Sincethe Union hasnot developeda voluminousacquisin the field of social protection,the startinghypothesisregardingaccessionwill be that thereare few problems in this respectfor the ECE countries.Following from the patternsidentified in the previoussection,it can be arguedthat any type of pensionschemeoughtto be acceptablefor the EU in view of the differences betweenthe new Swedish,the Danish, the Germanor the British systems.

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Of course,the Commissionmust be concernedaboutthe free movementof capital, labour and serviceswithin the single market.And herethe diversity of pension systems, as well as health care systems, forms a major impediment to labour mobility. The lack of harmonisedregulations for state-organisedPAYG pension schemesand of public as well as private healthcareprovisionsclearly makesit unattractivefor labourto movefreely between member states. A secondconcern of the Commission is fiscal stability, and with it the stability of EMU. Intergenerationalsolidarity in PAYG systemsdraws a chequeon the future which may becomeexpensive when demographicparametersare changing- as is currently the casein most Europeancountries.The temptationmust be greatfor governmentsto postponepart of the additional burdento a more distant future by issuing bonds.In that casememberstateswith smallersuchliabilities, like the UK, will have to sharein the consequences of increasingcapital costS.44But all these are general problems, and have little specific relevanceto the new candidatemembers. As we have seen, the fiscal crisis has induced several of the transformationcountriesin ECE to engagein radical welfare statereforms, and in this regardthey are alreadyaheadof many incumbentmemberstates that currently complain aboutthe heavyburdenof ageingand rising health care costs. Solutionshave to be national and may follow different welfare state paradigms. However, it is intriguing to consider that particular radically reformed welfare state regimes will gain a certain weight after Easternenlargementwithin the Union, influencing the institutional policy choice of thoselate-comingreformers.As far as third-pillar private social insurancesystemsare concerned,which in the form of occupationalwelfare provisions play an important role in many Western countries, the Union endeavoursto becomemore active in reachinga single marketin the field of services.45 But here also national sovereigntyis quickly involved. The points of concernare prudentialrules for supplementarypensionschemes, co-ordination of tax systems and the influence on social partners to negotiateschemesthat do not inhibit labourmobility. Occupationalschemes play a minor role in ECE, partly due to the traditional overall state responsibility for social security and partly due to the low degree of organisationof social partnersafter the switch to the marketorder. There could be seento be an accessionproblem, and in somemember countries it is seen as a veritable menace,in that all the membership candidatesare poorer,in the majority of casesconsiderablypoorer,than the least developed country of the EU-15. The expected consequenceis migration from the poor to the rich countries.Insofar as such migration is

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wage-induced,thereis little wrong with it from an economicpoint of view. However, if migration is induced by differences in welfare provisions, things become more difficult. Differences that are linked to labour contribution and income, as in contribution-relatedprivate insurance schemes,again pose little problem from an economic point of view, althoughthe possibility of moral hazardin health careinsurancecannotbe excluded.As soon as welfare systemswith strong redistributiveelements are involved, however,it dependsvery much of the concretearrangement whetherthe resultingmigrationimplies an inefficient allocationof labouror not. ReformsintroducingNDC and FF schemesgo into the right direction, but the existing systemsalso can copewith the problem. Two popular catch cries in this context are 'welfare statetourism' and 'social dumping'. Both are suggestive,but they are also essentiallywrong in their implications. The freedom of labour mobility relates to the employedand not to the unemployed.The employed,however, will gain with their labour contribution claims that are not only paid out as a takehomewage,but alsoin the form of socialsecuritybenefits.Theseclaims are backedup by the workers' productivity, which is higherin capital-intensive highly developed countries than in labour-intensive less developed countries. The term social dumping implies a deliberately low social securitystandardin orderto gain a competitiveedge.As long as the labour market is not completely rigid, lower non-wage labour costs will be compensatedby higher wage labour costs.The distribution of firm labour costsbetweenthe two may be a parameterof economicpolicy; total labour cost is not. Interestingly,the reproachof social dumping is always directed towardslow labour cost countries,not high wage countrieslike the US or Japan,which have significantly less developedwelfare statesthan Europe. They are rather usedas paragonsof 'reasonable'welfare stateregimesby liberal critics of the Europeanparadigm.Within the EU thereis a particular practice that may be subsumedunder social dumping, namelyimporting workersfrom low wagememberstates(which, undernormal conditions,as just stated, must be due to lower productivity and not to lower social security contributions) and paying them partly or fully in their home countries.Trade unions considerthis as unfair competition,and following the accessionof extremelylow wagecountries,suchpracticesmay become an evenmore seriousproblem.At the sametime, however,it is clearthat the harmonisationof social securitypaymentswould not solve this problem. We come to the conclusion that the diversity of social security arrangements within the Union may havenegativeeffectsuponthe mobility of labour. This state of affairs will not be significantly deterioratedwhen

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new membersfrom ECE join the club. The enormousdifferencein total per capita welfare betweenthe Union average,and even the least developed incumbentmemberstates,on the onehand,andthe accessioncandidates,on the other, poses serious problems and strains on their neighbouring countriesand on the Union budget. Nevertheless,it seemsunwarrantedto suggestthat 'the EuropeanUnion therefore faces a challenging task to harmoniseits differing social securitysystemsbeforeit expandseastward'.46 If taken seriously, this would postponethe enlargementfor an indefinite period. CONCLUSIONS

Capitalism is said to be all about efficiency, communism all about distribution. If this were true, transformationwould be about getting from the welfare state to the nightwatchmanstate. And observersof the social consequences of transformationwere justified in ascribingto the transition from one evil to anotherthe undeniabledeteriorationof the social situation in EasternEurope.Yet things are somewhatmore complicated.The liberal policies of stabilisation, liberalisation and privatisation that are indispensablein order to introducea marketorder do not needto imply the neo-liberal spectreof a wholesaleabolition of the welfare state. No such thing happenedin the region. What has happenedin part of the region was statecollapse.And thereforeonehasto differentiatecarefully betweenECE and the FSU. All the horror stories about transformation-induced alcoholism,falling life expectancy,deterioratinghealthstatusand appalling incomeinequalitiesare true for the CIS region, and in particularRussia,the Ukraine and Moldova, but much less so for ECE. The Balkans and the Baltic states have been hit more by such evils than the four Visegrad countriesand Slovenia (and also Croatia). That is, those countrieswhere transformationwascarriedout swiftly and with determinationwitnessedthe strongesteconomicupturn and sufferedleastfrom the social consequences. And it is only these countries that will be able to fulfil the accession conditionsof the EU. Takenliterally, the communistwelfare stateis a contradictio in terminis sincetherewas no autonomouseconomicsystemwhoseway of functioning and resultswould haveto be altered,complementedor supportedby the use of political power. Under communismpolitical power is all-pervasiveLenin's primacy of politics. The re-introduction of the market fundamentallychangedthe role of the firm and this implied a concomitant changeof the social securitysystem.The latter change,in fact, did not keep

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pace with the former, and thus causedthe immediatedeteriorationof the social situation. The first phaseof welfare state reform can therefore be describedas a kind of muddling throughthat soughtto avoid the worst and to adaptthe institutions that were inherited from the pastto the immediate requirementsof transformation. In many cases this kind of muddling through ran into fiscal problemsand induced the secondphaseof welfare statereform. Health care and educationposeeven more intricate problemsthan old age, invalidity and unemploymentincome security. Not only is there the necessity to reorganise the financial provisions of these systems and reconsiderthe public-private mix, but, being sectorsof production, their achievementsalso dependon capital equipmentand labour resources.The latter have beeninherited in ample quantity from the old system,making restructuringa necessity.The legacieswith respectto the former are rather poor. Hence improvementof both sectors will be achieved only over a longerandcostly investmentperiod. Expensesfor healthcareandeducation in the ten accessioncandidatesin ECE as a shareof GNP are only aboutten per cent lower than in the EU-IS on average,47which, given the fact that GNP (at purchasingpowerparities)is on averageonly 40 per centofthe EU average,implies of coursea considerablylower absolutelevel, albeit one that is partly compensated by the lower labourcosts. Only when the new economicorder was more or less establisheddid some countries enter a secondphase of welfare state transformationin which more consistentmodels were developed.The political economyof this processis interestingin itself.48 The willingness to reform, strongerfor instance in Poland and Hungary than in the Czech Republic, can be explainedby a welfare state crisis and, above all, by a fiscal crisis, thus reducing the possible influence of different shared ideas about social security. Political legacies from the communist and the pre-communist period constrainthe extent of reform and determineits direction. Having been part of the Europeanwelfare state tradition, in particular its Central Europeanvariant, thesecountrieswere not preparedto take over the World Bank model without alteration.The public-privatemix of the new pension models in ECE and, as we have seen, also in Sweden (Germany has a similar reform in the making) differs significantly from the World Bank advicein whosethree-pillarmodel the brunt of social securitycostsis borne by the private secondpillar, with the public first pillar providing only for poor relief. The new Europeanfour-pillar model usesthe mandatoryfully funded private pillar as a complementto, rather than as a substitutefor public social security. So, in the end, it will be the state, as legislator,

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regulator and organiser, that remains responsible for the quality and legitimacy of welfare state transformation: as Orenstein notes, 'state capacityis probably the single greatestdeterminantof the ability to create and managea welfare state'.49 In sum, it is good governancethat is the single greatest problem facing the transformation countries in Eastern Europe. NOTES This study benefitedfrom the discussionat the first sessionof the ReflectionGroup on Diversity and Unity in the EnlargedEuropeanUnion. Helpful commentsby Dr KatharinaMiiller and Dr Frank Bonker are also gratefully acknowledged. I. By Stanley Fischer, Ratna Sahayand Carlos A. Vegh, 'How Far Is EasternEurope from Brussels?'IMF Working Paper (Washington:IMF 1998). 2. Hans-JiirgenWagener,'Riickkehr nachEuropa',FIT DiscussionPapersNo. 16/99(Frankfurt (Oder): Frankfurt Institute for TransformationStudies1999). 3. RobertJ. Barro and Xavier Sala-i-Martin, 'Convergence',Journal ofPolitical Economy100 (1992), pp.223-SI. 4. JanosKornai, Highways and Byways. Studieson Reform and Post-CommunistTransition (Cambridge,MA: MIT Press1995), p.131. S. FredericL. Pryor, Public Expendituresin Communistand Capitalist Nations (London: Allen & Unwin 1968); FrancisG. Castles,'WhateverHappenedto the CommunistWelfare State?' Studies in Comparative Communism 19 (1986), pp.213-26. See also Ulrike Gotting, Transformation der Wohlfahrtsstaatenin Mittel- und Osteuropa. Eine Zwischenbilanz (Opladen:Leske+Budrich1998),pp.77-80. 6. Dena Ringold, 'Social Policy in PostcommunistEurope: Legaciesand Transition', in LJ. Cook, M.A. Orenstein and M. Rueschemeyer(eds.), Left Parties and Social Policy in PostcommunistEurope (Boulder, CO: Westview 1999), pp.lI-46; Hans-JiirgenWagener, 'Social Security -A SecondPhaseTransformationPhenomenon?'in Katharina Miiller, AndreasRyll and Hans-JiirgenWagener(eds.),Transformationof Social Security: Pensions in Central-EasternEurope (Heidelberg:Physica 1999), pp.13-30. 7. LeszekBalcerowicz,Socialism,Capitalism, Transformation(Budapest:CEU Press1995). 8. UN-ECE, EconomicSurveyof Europe 1 (Geneva:United Nations 2000), p.228. 9. Claus Offe, 'The Politics of Social Policy in East EuropeanTransitions: Antecedents, Agents,and Agendaof Reform', Social Research60 (1993), pp.649-84. 10. Clifford G. Gaddy and Barry W. Ickes, 'Russia'sVirtual Economy', Foreign Affairs 77/S (1998), pp.S3-67. 11. Branko Milanovic, Income, Inequality and Poverty during the Transition from Plannedto Market Economy(Washington:The World Bank 1998), p.77; the figures may be disputed, the trend is unquestionable. 12. Ibid., p.41. 13. SeeHans-JiirgenWagener,'Warum hat Russlandden Zug verpasst?'Leviathan: ZeitschriJt fur Sozialwissenschaft 29 (200l), pp.ll0-40. 14. Luca Barboneand HanaPolackova,'Public Financesand EconomicTransition',Moct-Most 6/3 (1996), pp.3S-6I; BarbaraFakin and Alain de Crombrugghe,'Fiscal Adjustmentsin TransitionEconomies:SocialTransfersandEfficiency of Public Spending',Policy Research Working PaperNo. 1803 (Washington,DC: World Bank 1997). IS. Commissionfor the EuropeanCommunities,A ConcertedStrategyfor Modernising Social Protection,COM 99/347 (Brussels,1999). 16. Jeffrey D. Sachs,'Reformsin EasternEuropeand the FormerSoviet Union in Light of the EastAsian Experience',Working PaperNO.S404(Cambridge,MA: NBER 1996).

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17. William Easterly and Sergio Rebelo, 'Fiscal Policy and Economic Growth', Journal of Monetary Economics32 (1993), pp.417-58. 18. GostaEsping-Andersen,The Three Worlds of Welfare Capitalism (Cambridge:Polity Press 1990). 19. Gosta Esping-Andersen,'After the Golden Age? Welfare State Dilemmas in a Global Economy', in Gosta Esping-Andersen(ed.), Welfare States in Transition. National Adaptationsin Global Economies(London: SagePublications1996), p.l1. 20. Gotting, Transformationder Wohlfahrtsstaatenin Mittel- und Osteuropa,p.170. 21. Katharina Miiller, The Political Economyof Pension Reform in Central Eastern Europe (Cheltenham:EdwardElgar 1999),pp.l37-9. 22. Such, at least, were someof the objectionsin the region (seeGotting, Transformationder Wohlfahrtsstaatenin Mittel- und Osteuropa, pp.84-8; Peter Gedeon, 'Social Policy in Transition', Eastern EuropeanPolitics and Societies9 (1995), pp.433-58;Linda J. Cook, Mitchell A. Orensteinand Marilyn Rueschemeyer, 'Conclusions',in Linda J. Cook, Mitchell A. Orenstein and Marilyn Rueschemeyer(eds.), Left Parties and Social Policy in PostcommunistEurope (Boulder, CO: Westview 1999), pp.235-47. 23. Cook et aI., 'Conclusions',p.343. 24. Ibid., p.343. 25. Ringold, 'Social Policy'. 26. Ibid., p.30. 27. See Mechtild Schrooten,Timothy M. Smeedingand Gert G. Wagner, 'Distributional and Fiscal Consequences of Social Security Reforms in Central-EasternEurope', in Katharina Miiller, AndreasRyll and Hans-JiirgenWagener(eds.), Transformationof Social Security: Pensionsin Central-EasternEurope (Heidelberg:Physica 1999), p.282. 28. EuropeanBank for Reconstructionand Development,Transition Report1999. Ten Yearsof Transition (London: EBRD 1999); most other transformationcountriesdo not haverelevant data. 29. PeterMihalyi and RyszardPetru, 'Health Care in the CzechRepublic,Hungary and Poland - the Medium-term Fiscal Aspects', CASE-CEUWorking Papers Series No.28 (Warsaw: CASE 1999), p.28. 30. Ibid. 31. Ellen Goldstein et al., Trends in Health Status, Services,and Finance: The Transition in Central and Eastern Europe, 2 Vols. (World Bank Technical Papers 341 and 348, Washington,DC: The World Bank 1996). 32. SeeGiitting, Transformationder Wohlfahrtsstaatenin Mittel- und Osteuropa,p.178. 33. World Bank, Averting the Old Age Crisis. Policies to Protect the Old and PromoteGrowth (Washington,DC/Oxford: Oxford University Press1994). 34. JohnWilliamson (ed.), Latin AmericanAdjustment.How muchhas happened?(Washington, DC: Institute for InternationalEconomics1990). 35. SeeMiiller, Political Economy,p.27. 36. Seeits subtitle 'Policiesto Protectthe Old and PromoteGrowth', World Bank, Averting the Old Age Crisis. 37. Miiller, Political Economy, p.29. The term originally derives from Ruben Lo Vuolo, 'Reformasprevisionalesen America Latina: el caso argentino', Comercio Exterior 46/9 (1996), pp.692-702. 38. Commissionof the EuropeanCommunities,A ConcertedStrategy,p.13. 39. SeeKatharinaMiiller, From the Stateto the Market?PensionReform Pathsin CEE and the FormerSoviet Union, The Vienna Institute Monthly Report6 (2000), pp.20-29. 40. Up to now, this is the only far-reachingreform within EU memberstates. 41. Frank Bonker, The Political Economyof Fiscal Reformin EasternEurope: A Comparative Analysis of Hungary, Poland and the Czech Republic (Cheltenham: Edward Elgar forthcoming 2002). 42. See Bela Greskovits,The Political Economyof Protest and Patience. East Europeanand Latin American TransformationsCompared(Budapest:Central EuropeanUniversity Press 1998), accordingto whom this may be accountedfor preciselyby the existing welfare state. 43. Balcerowicz,Socialism.

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44. Cathryn Ross, 'Commenton Schneider',in Irwin Collier et al. (eds.), Welfare States in Transition. East and West(Basingstoke:Macmillan 1999), pp.158--63. 45. Commissionof the EuropeanCommunities,Towards a Single Market for Supplementary Pensions,COM(99) 134 (Brussels,1999). 46. Ondrej Schneider,'Enlargmentof the EuropeanUnion and the Harmonizationof Public PensionSystems',in Irwin Collier et al. (eds.), Welfare Statesin Transition. East and West (Basingstoke:Macmillan 1999), p.142. 47. EuropeanBank for Reconstructionand Development,Transition Report1999. 48. SeeMiiller, Political Economy. 49. Mitchell A. Orenstein,'PostcommunistWelfare StateTransformationand its Place in the TheoreticalLiterature' (conferencepaper,Brown University, 1999), p.lO.

Approaching the EU and Reaching the US? Rival Narratives on Transforming Welfare Regimesin East-Central Europe JANOS MATyAs KovAcs

A SOCIAL BORDER?

Accordingto a recentjournalistictruism, the Iron Curtainthat wasdismantled in 1989 as a political and ideological frontier has since re-emergedas an economic and social border. Schengenlandprotects itself from its Eastern neighbourswith the help of import quotasand visa obligation, police buildup along the border,anda blendof diplomatic arroganceandprecaution.The truism is basedon the identification of the new 'police frontier' with a social border,or, moreprecisely,with a welfarecascadethat rangesfrom the former Iron Curtain to Siberia. In the light of this assumption,the Iron Curtain remained a border beyond which social exclusion, human deprivation, povertyandcriminality prevail. Probably,East-CentralEurope(ECE) canstill be salvaged,but the fartheryou moveto the east,the more severesocialcrisis you find. Becausethis contradictsestablishedEuropeanvalues,and- perhaps more importantly - becauseof the need to protect Western markets after Osterweiterung, one of the elementary requirementsof entrance to the European Union for the ex-communistcountries is a quick and steady increasein wagesand social performancelevels. As frustrating as it may be for EasternEuropeans,it is impossible to questionthis truism aboutthe rich and poor halvesof Europein the field of generalsocial statistics.Of course,one could doubt its inherentgeographical determinism(is Georgia sociallymore backwardthan Albania?) or point out thosefields of social policy (for example,family allowances),in which the shrinking 'communistwelfare state' still provides more generousservices thanmanyof its advancedWesterncounterparts.Also, a thoroughcomparison of the generalsocialpolicy performanceof, for example,the CzechRepublic and Hungary today with that of Greece or Portugal at the time of their accessionto the EuropeanCommunity may reveal striking differences in developmentin favour of the ex-communistcountries.

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This study, however, intends to cast doubts on the social border thesis from another perspective.The proponentsof that thesis usually confuse performance indicators with regime characteristicsand attribute poor performanceto a particular welfare regime. This regime is frequently portrayedas a hybrid consistingof the relics of communistsocialpolicy and of a neophyte imitation of the US model of welfare. According to the implicit assumption,almost an axiom, EasternEurope has taken resolute stepstowards 'Americanising' its welfare regimes.The related accusation is, however, explicit: the ex-communistcountriesare committing a grave mistakeby abandoningthe 'Europeantradition' in socialpolicy and thereby preserving the Western frontier of the former EasternBloc as a border betweenmore and less humanesocieties.They are combiningthe worst of two possible worlds, welfare provided by incompetentand corrupt state bureaucratswith social myopia of the free market. This study tries to show that, first, new poverty, social exclusionand so on in EasternEuropeis, to a large degree,a result of post-1989economic recession. 'Neo-liberal' arguments are frequently used by local policy makers to make a virtue out of the necessity of introducing austerity measuresin the economy.At any rate, in most countriesof the region any 'Americanisation'of the welfare regimeshasremaineda rhetoricalexercise ratherthan a powerful economicstrategy. Second,the considerabledrop in generalsocial performancemay well representa kind of 'backto normalcy' processwherebythe levels of welfare provision have been adjustedto the actual economiccapacity of the new democraciesduring the first yearsof the transformation.Nevertheless,path dependencyis strong, and, surpassingthe stage of austerity, the excommunistwelfare statestend to recoverin many fields, andevenradically liberallcommunitarianreforms end up with compromiseand stalematein the social sector. Third, as a consequence,while the fact of a social border cannot be disputed in real terms (though the gap betweenEast and West is being reduced by the economic upswing in East-CentralEurope), it would be difficult to identify that border as a demarcationline which also separates two essentiallydifferent types of welfare regime. Although occasionally EasternEuropeansocialreformersmay makebolderexperimentsthan their West European colleagues in marketising/privatising certain welfare schemes, these experiments are far from being irresistible under the pressureof the social legaciesof communism,the daily challengesof the transformation, new statism/conservatismand the requirements of Europeanintegration; and similar reforms have been initiated (also with

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mixed results)by a few WestEuropeanwelfarestatesas well. Hence,a clear separationof regime types would be impossibleeven if they proved to be homogeneouson both sides of the former Iron Curtain. Given their heterogeneityin the West as well as in the East,the 'borderof models'may run, in a certain field of welfare and at a certain moment,betweenGreat Britain and Hungaryon the one side and Germanyand the CzechRepublic on the other. In crossingthe real bordersbetweenthe former blocs in Europein any direction, the travellerbecomesa prisonerof new differential stereotypesof welfare such as 'solidaristic versus socially irresponsible', 'organised versuschaotic', and so on, which complementthe old one of 'rich versus poor'. These are based, in a way justifiably, on visible and tangible indicators of welfare such as the number of abandonedchildren, street beggarsandtuberculosispatients,or the measureof air pollution, the size of averageold age pensionor the frequencyof work accidents.However, if socialpolicy analystsindulgein the preservationandmultiplication of these indicators,they run the risk of elevatingtheir differencesonto a symbolic (almost mythical) level. To be sure, drawing symbolic borders which separate'us' and 'them', the 'same' and the 'other' in a strict moral hierarchy can easily becomea self-fulfilling prophecy-a prophecythat may inhibit social innovation by exerting enormous pressure on the 'unlucky' Easternhalf of the continentto imitate the 'lucky' Westernone, evenif the latter representsonly one of the successfuldevelopmenttypesin global context and even if its successhas recently been questionedboth from inside and outside. If catching up with Europe is confined to sheer imitation, Eastern Europemay remainunlucky. By the time it copiesany ofthe currentwelfare regimesof WesternEurope,theseregimeswill probablynot havebeenable to produce the same performancelevels as they do today. While the European Union adjusts to the global competition of tomorrow, the accessioncountries may adapt their own social systemsto those of the Union of yesterdayand today and, as a result, may lag behind the world again. Therefore,the newcomershave to undertakethe almost impossible taskof satisfyingtoday'sconditionsof entrancewhile preparingfor thoseof tomorrow. Given the long building processand, later, the considerable inertia of welfare institutions, EasternEuropeansocial reformershave no choiceotherthan trying to havethe entranceexaminersof the Union accept suchwelfare policies in the ex-communiststatesthat thosesameexaminers probably wouldnot put forward in their own countries.

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DISTURBING QUESTIONS

The term 'prematurewelfare stateof communism',coinedby JanosKornai sometime ago,is widely discussedin East-CentralEuropetoday. Dedicated followers of free-marketorthodoxy and nostalgiccommunistsare making efforts to interpret the metaphorof the prematureinfant accordingto their own preferences.While the former opt for active euthanasia- they would like to acceleratethe deathof the strugglinginfant - the latter would like to keep the incubatorgoing even if the infant has alreadydied. Betweenthe two extremes representedby a few radicals there is an overwhelming majority of socialscientistsandpolicy makerswith diverseconvictionswho would be happy to find a viable combinationof the two approaches. Indeed, can the communist welfare regimes be transformedwithout falling into the trap of conserving the statist, inefficient and pseudoegalitariancharacterof the old systemof social policy; seekingnew forms of welfare collectivism along the national-conservative/populist'Third Roads'betweencapitalismand communism;triggering populardiscontent by dismantlingthe old welfareregimestoo rapidly, in a haphazardway; and targetingan end-statewhich hasbecomeunsustainablein the Westernworld during the pasttwo decades? Thesedisturbing questionsbecomeannoying if one considersthat the transformationof the communistsocial institutions and policies is taking place in fragile new democracies,in a period that was introducedby an unprecedentedeconomic recession, amid repeated privatisation and marketisationdrives,andin economieswhich haverecentlyandvehemently openedup to global competitionand are challengedby the vision of a nearterm enlargementof the EuropeanUnion. One can no longer disregardthe relatedquestion: 'to what extentare the emergingwelfare regimesin EastCentralEuropenot only sustainablebut also compatiblewith the European model(s)?' In answeringthis question,one can hardly apply the convenientmethod of fixing, in oneway or another,the Europeanstandardsof socialpolicy and then examine to what degree the newcomershave approachedit. The emerging welfare regimes in East-CentralEurope are far from being identical and there has always been a variety of social policy models in WesternEurope.In addition,the ECE expertsdo not find stableinstitutional arrangementsin the West to copy but rather anotherreform process,the 'domestication'of the classicalwelfare state(s).True, the generaltrendsare not dissimilar: partial retrenchment,decentralisation,marketisation and privatisation of public welfare services as well as an upsurge of the

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voluntary sector, that is, decreasing state involvement, are the main characteristicfeaturesof regulatingwelfare on both sidesof the former Iron Curtain, althoughsomecountriessuchas Swedenand the Netherlandsare, at the sametime, extendingnew entitlements.Nevertheless,to tell if the two changingsystemsare likely everto be harmonisedis terribly difficult. Who would be willing to predict today whetherin ten or 15 yearsfrom now the post-communistwelfare regimes will be compatible with the European standardsof that time? Theoretically,if one excludesthe unlikely caseof spontaneousperfect harmonisation,whereEast-CentralEuropecatchesup with WesternEurope without overtaking it in any respect, there may be two kinds of incompatibility. Despiteany similarity of the two reform processes,either the Westernor the Easternpart of Europewill happento becomein the long run lessstatistand more private (and/or 'voluntary') than the otherin terms of the welfare mix. To put it simply, either the EU or the ex-communist socialregimesbecomemore 'North American' (if the latter doesnot change in the meantime). Currently, there is a growing consensusin the West about social trajectories in the ECE region. Unfortunately, this consensushas been forged under the influence of spectacularmedia images of societal polarisationin EasternEuropeas a whole (for example,Russiannew-rich women in fur coats shopping in Paris versus children dying in a demolishedAIDS clinic in Romania).Not only journalistsbut also many Westernscholarsassertthat ex-communistcountriesare in a rush to jump over, first, the Scandinavianmodel of social protection, and then the Bismarckian, the Beveridge-style and the South European welfare systems,in order to arrive in the world of US-type social regimes.If this is true, one should be preparedfor the ironic situation, in which certain countriesof the region will prove to be EU-incompatiblein the future not because they are still too communist-boundbut because they are excessivelypro-capitalist. For a long time, the conventionalwisdom was that East-CentralEurope shouldbe allowed to join the EuropeanUnion only after a protractedphase of adaptationbecause,among other reasons,its social performancewas poor in absoluteterms.If the pro-capitalist- many observerswill say, neoliberal - experimentssucceed,while similar West Europeanreforms slow down or get stuck(horribile dictu, if Europecreatesa 'socialfortress'),will theseexperimentsnot also constitutean obstacle?

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THE DIALOGUE OF THE DEAF

For the purposesof this study the literature was addressedwith a general interestin currenteconomicand political thoughtin EasternEuropeand in particular with a desire to investigate the re-emergenceof the 'social question'in the ECE region.! In exploring the socialpolicy discipline in the region, one finds oneself in a battlefield in which political mines lurk everywhere and where antagonistsfrequently use a highly combative, ideological languageagainsteachother, which camouflagesthe empirical facts of the underlying social processesand the researchtechniquesapplied to understandthesefacts. By and large, the castconsistsof liberal-mindedeconomistson the one side and sociologistswith social democraticleaningson the other.The roots of their conflict reachbackto the period of reformsunderlate communism, during which they drifted into a 'state versus market' debateof a rather scholastic nature. At that time, the pro-market economists (market socialists,as they were called) askedthe social policy expertsto prove that their interventionist,social-protectionistclaims (a reaction,by the way, to the falling welfare performanceof the planned economy) were different from those made by the communist hard-liners. The sociologists felt offendedby this accusationand respondedto it by simultaneouslyalluding to the 'laissezfaire fundamentalism'of market socialistsand refuting state dirigism. It may well be that the conflict startedthe other way round and sometimesintersectedthe disciplinary frontiers. However, one thing was certain. The unfolding controversyremindedthe observerof a dialogueof the deaf, in which mutual recriminationconcerningthe social indifference of economistsversus the economic ignoranceof sociologistsfrequently replacedreasonablearguments. The conflict betweenthe two groups, which had partly beenrepressed by their internal solidarity againstthe communists,eruptedin 1989,causing huge waves of emotion all over the region. It should have originally revolved aroundday-to-dayproblemsof crisis management(such as what could or shouldbe reshaped,curtailed kind of welfare services/expenditures or deletedto reducethe overall budgetdeficit in the short run). Instead,it was elevatedonto the level of social philosophy.Here 'state' and 'market' were confrontedagain: the sociologistsstressedhow expensivethe market is in terms of social costsand played down governmentfailures while the economistsargued the other way round instead of comparing the social costsand social benefitsof both institutionsin a detailedanalysis. On the eve of the Eastern Europeanrevolutions, most of the social policy expertshoped that in the future there would be enoughroom for a

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kind of 'sound interventionism'.2They would no longer have to face incompetent, arrogant and pitiless state bureaucracies;the welfare programmescould be reconstructedto becomemorejust andefficient at the same time; and certain welfare schemeswould be managedby the civil society on a non-profit basis rather than marketisedand privatised, and streamlinedratherthan abolished.The 'communistwelfare state' shouldbe dismantled,they believed,but the welfare statemustbe preservedor - more exactly - created anew following Scandinavianrather than any other WesternEuropeanpatterns,not to mentionNorth America. Now imagine this group of welfare reformers who in 1989 found themselvesconfrontedwith a greatnumberof economistsin their countries who wanted to launch strict stabilisation programmes, which were complementedby ambitious plans for marketisation and privatisation. Moreover, these economistswere supportedby an influential choir of foreign advisors, Western policy makers and leaders of international economic organisations.Occasionally, they applied a rather low-quality neo-liberal rhetoric to justify austerity. This mix of restrictive vigour, deregulationdrives and neo-liberalrhetoric prevailing in the first years of the post-communisttransformationcame as a real culture shock for the welfare reformersof East-CentralEurope.As a first reactionthey fell back on routine language and continued demonising the former economic reformers(now transformers)as 'ChicagoBoys', 'Wild-EastThatcherites', andso on, who representthe samekind of socialindifferenceas before- but now as agentsof an 'internationalneo-liberal conspiracy'. 'This is Latin America. You are responsible!',pointed the social policy expert at the economictransformer.'Do you long for the ancien regime?', so went the response,and the dialogueof the deafcontinued. DID ANYTHING HAPPEN? TWO AND A HALF NARRATIVES

Today, the antagonistsare probablylessstrainedanddetermined.Economic recessionwas followed by a rapid recovery, in particular in Hungary and Poland.Many of the major stepstowardswelfaretransformationendedwith a compromiseor were postponed.The welfare sectorsdisplay considerable inertia and neither the rhetoric nor the actual programmesof the postcommunistgovernmentsvary greatly. 'New social democracy'in the West also offers the warriors a sufficient dose of relativism and pragmatismto bury their hatchets. As regardsthe scientific environmentof social transformation,hundreds of new researchprojectsareunderway; the involvementof Westernscholars

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of a variety of persuasionshas resultedin more sophisticatedtechniquesof survey and analysis; East-Weststudies are complementedby East-East comparisons;normativefervour is counterbalanced by detachedexplanation; interdisciplinaryresearchis ascendantandrival tendenciesappearwithin the individual disciplines.Consequently,12 yearsafter the revolution, one may hope that the bilateral conflict describedabovewill be moderatedby crosscutting the cleavagewith the help of new insights, which mediatebetween the dominantdiscoursesor transcendthem for good. Nevertheless,before the bright future materialises,it would not be too bad to know what has 'really' happenedin the welfare sectorsof EastCentral Europe in the course of the past decade.Given the still rather passionatemoods in social sciencethroughoutthe region and the lack of comprehensiveand comparative works,3 it is extremely difficult to reconstructthe mostrecenthistory of welfare in the ECE states.Let us first seehow the insidersinterpretthe courseof this history. We focus on three (more exactly, two and a half) competing narratives of welfare development:for the sake of brevity, they are namedthe 'leaping in the dark', the 'marking time' and the 'muddling through' stories. The two storiesthat originatein the conflict betweeneconomicand social reformers are retold first. Then the main lines of a third, experimental'half-narrative' will be drawn. Finally, the 'what has happened'questionrelating to the problemof EU compatibility is briefly discussed. Needlessto say, the narratives are my constructionsand they are probablymore sharplyspecifiedthanmany of the authorswould like to see. If not statedotherwise,what comesbelow is their text in a stylised form, though someof the referencesinclude authorswho shareonly one or two conclusionsof the given narrative.Threecountriesof East-CentralEurope - the CzechRepublic,Hungaryand Poland- are chosenas backgroundsto the stories. The examplespertain to quite a few important fields of social welfare with the clear exception of education. The narratives are reconstructedaround two main topics: the general performanceand the institutional design(mix) of the welfare regimes. 'Leaping in the Dark'

According to this first narrative,since 1989 a fundamental-and appalling - changehastakenplacein the regionconcerningboth the performance and the institutional characterof the welfare systems.4 Following someyearsof stagnation, public provisions have been drastically reduced by (a) narrowing the scopeand the period of eligibility entitlements- sick pay, unemploymentbenefits,family allowances,pensions,and so on - that is, by

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partly abandoninguniversalismfor targetedtransfer payments;(b) fixing the statutory minimum wages or pensionstoo low and linking certain benefits to it; (c) lowering the quality standardsof the services; (d) introducing the principle of private insurance - health care, old-age pensions;or (e) inflating away the real value of the governmenttransferspensions,family allowances,and so on. With the privatisation of state enterprisesa vast numberof health clinics, kindergartens,apartmentsand holiday homes -a considerableshare of public welfare provision disappearedalmostovernight.5 The remainingsocial servicesbecamemore expensivethrough curbing or termination of the governmentsubsidies, introduction of co-payment schemes (day care, medicine, hospital treatment, and so on) and taxation of certain transfers. Also, public 6 although expenditureon welfare has not grown through decentralisation: the local administrationunits get relatively more funds now than before,the sum total of local and central expenditureson social services was not increased. What is emergingis a new (more exactly, old) paradigm,a kind of a 'liberal' or 'residualwelfare state',as GostaEsping-Andersenor Richard Titmuss describedit.7 Communismleft behind a 'service heavy, transfer light' welfare system,8which is being transformedinto one that provides significantly fewer serviceswhile not increasingthe governmenttransfers proportionally (or indeed also decreasingthem). After World War II, the communistsin East-CentralEuropehad inheritedBismarckian-stylesocial arrangements;while expandingand deepeningthem, they reinforced the statist-hierarchicalcomponentsof thesearrangements.When communism collapsed, the baby was thrown out with the bath water: instead of 9 and partly liberalising public welfare in moving toward the democratising Scandinavianmodels or at least toward Soziale Marktwirtschaft, that is, insteadof keepingthe 'Western'featuresof the social systemandthrowing away 'Eastern'-type pseudo-paternalism, the essentialsof state-financed 1O This is and state-provided welfare were made questionable. retrenchment, \I nothing else.Yet the statecannotbe replacedin someof its social policy functions (organising redistribution on the national level, granting social rights, and so on) and the welfare sectors,if left alone, suffer from a seriesof marketfailures. The stateis not to be veneratedbut usedcarefully. Following 1989, most economictransformersnamedwelfare the main culprit of the alleged public overspending.Obviously, expendituresalso could havebeencut backin otherchaptersof the statebudget.Nevertheless, the post-communistgovernments exploited austerity to 'educate' the

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citizensl2 - for short-termsavings(such as consumptionof medicines)and long-term calculating behaviour (such as private pensions)- by forcing them to accept the amorphousand overlapping principles of individual responsibility, self-reliance and self-insurance.Originally, the cutbacks were said to be provisional but they were built into the new welfare mix. The educationstrategywas skilfully basedon the fact that communismhad immenselydiscreditedthe idealsof equalityand solidarity as well as of state interventionin general.The local educatorsandtheir Westernadvisorswere even more zealousand met less resistancein the EeE countriesthan in the West, and their referencesto austerity and economic rationality often disguised the vested interests of certain lobbies, sheer ideological commitment and/or lack of expertise. Moreover, becausethe subject of individual responsibilitywas loosely defined, the principle of self-reliance offered the new governmentsa legitimate opportunity to shift part of the social burdens(child care) onto the families. Here neo-liberal arguments preparedthe soil for conservativesolutions which forced women to leave the workplaceand return home. Undoubtedly, the 'communist welfare state' had safeguardedthe principlesof universalcoverageand free servicesonly on paper.13Yet, if the transformersviolate them every day, then nothing can stop the transition countriesin their decline. Health service is the worst examplethroughout the region. Although social security contributionshave not beenreduced,a bedin hospitalis very expensive.But in orderto be operatedon in time, one still needsto bribe the doctor in order to jump the queue,as under the old regime.It is also necessaryto bring along toilet paper,food and medicineto the hospital, not to mention a well-trained relative to replacethe nurse. In optimal care, the Soros Foundationwill have equippedthe hospital with high-techmachinery,there will be only a few well-to-do people(including foreigners)in the queueand,following surgery,the patientwill not get a bad cold lying neara brokenwindow. Besides abandoninguniversalism and the principle of free services, there was another important symbolic gesture.The doctrine of statutory social rights (such as the right to work) was practically renouncedby avoiding any definition of the object, the extentand the institutional setting of public welfare responsibility,in the new constitutionsof the region. The authors of these basic laws did their best to formulate the state's responsibilityfor social protectionof the citizensin a way to excludefuture accountability.14 Under communism, these rights were not enforceable becausedemocracywas suspended;today, paradoxically,it is democratic parliamentsthat hinder their concretisation.

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The social spheresthat were evacuatedby the state have not been refilled by private (non-profit or for-profit) initiative. The mushroomingof non-governmentalwelfare organisationsin East-CentralEurope must not mislead the observer.They are either low capacity/qualitysubstitutesfor public servicesor they favour the rich; they servetax evasionpurposesand expropriatepublic money or chargeexorbitantprices or - most likely - die fast. Private health insurance and pension schemes, the two major 'innovations' of the new, mandatorilymixed welfare regimesin the region, are probably less efficient than the systemof publicly financed and statemanagedsocial security and certainly more unjust and risky. The privately funded schemesprivilege the alreadyprivileged. In the caseof the pension system, for instance, the private/public combination favours those with middle and high incomesand securejobs who havenot yet retired.IS In other words,the principle of individual responsibilityprefersthe strongto the weak. Thereby,even partial privatisationof financing health care and the pension systemconfusesmostlinks of solidarity betweengenerationsand social strata and contributesto the growth of income inequalities and eventually to the disintegrationof the fabric of the society.The emergingwelfaremix is getting increasinglybiasedtowardsthe middle class(the actualvotersandtaxpayers), particularlytowardsits upperechelons.This processis defendedby meansof the utopia of an unlimited downward expansionof the middle strata of society. At the same time, the rich are allowed/promptedto opt out from certain public welfare schemes,which removestheir responsibility for the functioning of the social systemas a whole. Welfare policy degeneratesinto poor relief with social assistanceand workfare becoming the main instrumentsof social protection. The 'truly needy', the 'deserving poor', must undergo humiliating and expensive means-testingproceduresand may long for the non-existentcharity offered by the new elite. Meanwhile, whole groups(disabled,homeless,long-term unemployed,elderly with low pensions,large families, ethnic minorities, chronically ill, inhabitantsof declining regions,and so on) fall through the ever growing holes of the safety net. New forms of social exclusion and deprivation (such as mass unemployment, child poverty, malnutrition, prostitution)are generouslytoleratedby the state;deeppoverty hasbecome legitimate again; and excessivepolarisation between an ever growing underclassand a thin layer of the new rich is evenapplauded.At any rate, the widespreaduse of the metaphor of 'social safety net'16 reflects the cynical attitude of the transformers:one should not offer each citizen a protectiverope or safetybelt when performingacrobaticstuntsin the circus of life; it is quite enoughfor the society to preparefor the caseif someof

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them (those who tried to perform but could not) fall down; the others,the 'undeservingpoor', may fall throughthe net.17 As a result of the general social decay, in East-CentralEurope most socio-biological indicators ranging from life expectancyat birth to the frequencyof old and new diseasesdeterioratesharply. On average,people have fewer children, becomesick more often and die younger,and, during their lifetimes, are poorer and enjoy less social safety. Owing to the neoliberal course of the transformation, the region has lost hundreds of thousandsof humanlives.ls A good part of them might have beensavedif the transformershad shown couragein real invention instead of merely copying ambiguous social arrangementssuch as the Chilean pension schemes.For instance, the fresh start in 1989 would have provided an excellentopportunity for the new social policy makersto introducea basic income regulation in the ECE countries to prevent the escalation of poverty.19 However, they preferred the revitalisation of old stigmas to enactingnew citizenshiprights for the needy. What about the new challengesfor the declining ECE social systems, which go beyond the standard tasks of transition to capitalism? The 'communistwelfare states'were able to cope with the social consequences of global competitionand communication(migration, drug trafficking and international crime in general) insofar as they managedto close their borderswith police forces and non-convertiblecurrencies.The close-down, of course,led to huge welfare lossesin other fields. However, today the welfare policy makersof the region do not evenmakeattemptsat taking the new challengesseriously.They tend to delegatethe new social troublesto the sphere of responsibility of the young and weak non-governmental organisation (NGO)sector. Moreover, instead of designing major public assistanceprogrammesfor migrants and launching long-termprevention and rehabilitation initiatives for drug addicts, they build new fences at certainfrontiers and increasepunishmentnorms.20 With some decentralisationof public welfare administration and the development of Janus-facedNGOs, social citizenship under postcommunism has reached its pinnacle in terms of democratic rights. Irrespective of their political colours and the will of their voters, governmentsin East-CentralEurope tend to implement an aggressively the only neo-liberalcourseof economictransformation.As a consequence, institutionswhich remainedto representthe welfare interestsof the citizens are the trade unions. However,they haveneverhad strong (or - in the case of Poland- they lost much of their) popular support,could not manageto stabilise their relations with the new social-liberal parties, and are

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incessantlyblackmailedby the threatof unemploymentand exposedto the malevolenceof the legislators.Hencethe citizenry, fragmentedas it is, has to assist passively in the fundamental deterioration of its own welfare situation. Meanwhile, as substantiatedby a series of opinion polls and deepersociologicalsurveys,the samecitizenry would prefer Swedish-type (publicly guaranteed)safety to (privately owned) freedom if they were 2! askedby their own parliamentaryrepresentatives. What has happenedis indeeda leap in the dark - both figuratively and literally. The region has jumped into uncertaintyand exposeditself to the 'dark forces' of global capitalism, monetaristdictatorshipor international 22 Although the proponentsof this 'Great Leap economic organisations. Backward' are firmly convinced that, in jumping over Europe, North America will be the ideal final destination,in the end they will inevitably arrive not in the northern but in the southernpart of that continent. The welfare regime of the US without the strength of its economy and the communityethosof its citizensleadsnowhereelse.In any event,in leaving behindcommunismand hoping to join a 'social Europe',creatinga whole new civilisation that combinessafetywith freedom,to anyonewith a social conscienceit would be almostas frustrating as the Latin America option to be reconciledwith the philosophyof the US-typequasi-welfarestate. Finally, those in East-CentralEuropewho insist on the conceptof the minimum state in welfare transformationrun the risk that a coalition of nationalistsand unreconstructedcommunistsexpropriatethe idea of social protection. Thus, in trying to minimise 'welfare waste', the neo-liberal transformersmay generatethe largestsocial costsby actually jeopardising 23 the new democracies. 'Marking Time'

The next story is basedon a deepfrustrationcontrastingthe disillusionment of the previous narrators. According to this responseto the 'what has happened'question, the really appalling developmentis that there is no development:East-CentralEuropehasnot yet beenable to leavebehindthe 'communistwelfare state'.The region is still marking time at the start line. It is far from heading towards Latin America but may eventually arrive thereif it continuesto insist on the utopia of providing welfare irrespective of the actualeconomicconditionsof the post-communisttransformation.It is not the alleged'neo-liberalhaughtiness'of economistsbut a sort of sociopolitical myopia that may causesocial decayand political turmoil. Let us supposefor a moment that a permanentand general decay of welfare has really occurred in the ECE countries both in terms of the

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performanceandthe style ofthe social system.Evenifthis assumptionwere correct,one oughtto askoneself,say the narratorsof this story, whetherthe allegedlycomprehensivedeteriorationis: 1. A clear consequenceof liberal transformativepolicies or has much deeperroots stretchinginto the ancien regime.If the latter is true, one is dealingwith an optical illusion: at leastpart of the decaydid not happen after 1989, but only becamevisible in the new democracies(poverty, unemployment,and so on). It may also be that in certain fields the transformation has even slowed down the deterioration of social performancein the region that had begun under communism. And, conversely,what decayis currently visible (due to the lobbying power of certain groups such as pensioners or medical doctors) is not necessarilythe greatesthardship.24 2. Characteristicof all ex-communistcountries or primarily of the nonCentralEuropeanones.25 If the latter is true, one ought to examinethose circumstances(differencesbetweenpre-communistwelfare traditions, the levels of communist welfare provision, and - above all - the strategiesof post-communisteconomic and political transformation) that explain the relative softnessof the 'socialcrisis' in the ECE region. 'Neo-liberal radicalism' may have contributed not only to the dismantling of old welfare arrangementsbut - through stabilising the economyand restartinggrowth - also to the recoveryof social transfers and services.26 3. Really the creationof 'neo-liberalzealots','obsessedmonetarists',and suchlike, or simply that of ordinary economistswho do have 'social conscience'but can count as well. If the latter is true, their aim was not to suppresswelfare spendingfor good but to adjust it realistically and temporarily to the overall performanceof the economy,in other words, to cut back social expendituresnow in order to raise them later on. Austerity was not a pretextfor orchestratinga neo-liberalconspiracy,so why shouldLatin-Americanisationproveinevitable?True, adjustmentis also tantamountto restructuringandstreamliningbut no onehasclaimed that East-CentralEuropemust jump over the West Europeanmodelsof the welfare state. 4. An accomplishedfact that has beencorroboratedby reliable statistical analysis based on comparative longitudinal surveys made in the respectivecountries,or a strong working hypothesis,which builds on fragmentedstatistics,expertestimatesand a speculativeblend of streetlevel observation,intuition, anecdotalevidence,opinion poll resultsand

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political discourseanalysis.If the latter is true, one cannottell whether or not the gloomy predictionswill actually materialise.Moreover,these predictionsmay justify themselves:if politicians acceptthem in fear of social unrest and push up welfare expenditure,they may eventually destabilisethe economyresulting in actualwelfare cuts. 5. Would be resolutelyblockedby the citizensvia more public spendingor - provided they are awareof the real costs of social expendituresthey haveto coverin the form of taxesand social securitycontributions- the same citizens would opt for a 'lower tax - higher private insurance' alternative.If the latter is true and the citizens could be liberatedfrom the prison of fiscal illusions27 concerning 'free' social services and helpedto recognisethat the taxesare redistributedin a way that has not in fact beennegotiatedwith them,thenit will be difficult for many social policy expertsto refer incessantlyto the people who yearn for a much greaterprotectionby the stateeven if this results in some loss of their liberties. In any event, sociological surveys conductedin the region repeatedlyshow that the peopleare more inclined to individualist than collectivist values.28 Like their antagonists,those who tell the 'marking time' story have deep-seated (and not completelyunfounded)reservationsaboutthe other. In they discoverin the minds contrastto the accusationof 'social negligence', of their adversariesa large dose of nostalgia with regard to the actual welfare achievementsof communism.Apparently,they say, the othershave forgotten that the 'communistwelfare state' was not only authoritarianand hypocritical but also monolithic and wasteful. In other words, it not only escapeddemocraticcontrol and broke its own promisesbut also banned pluralism,that is, competitionwithin the welfare sectors,andusedresources lavishly. This inherentinefficiency of the Soviet-typewelfare statehad to a large degree contributed to the economic decomposition of the communist system. So why carry along that burden to post-communism?29Why paralysestatebudgetsfor many years to come?Why make false promises any longer?Why expectthe prematureinfant to be as strong as thosewho havehad the privilege of a full term to preparefor life? Thereis a quid pro quo, and the trade-offs cannot be disregarded. 3D Welfare expenditure competeswith other sorts of public spendingand originates in taxation. Hence,any restructuringin favour of welfare in the statebudgetor any rise in social spendingmay retard economicgrowth, generateunemployment, force the citizens to enterthe undergroundeconomy(in which, by the way,

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they are unprotected),and so on - therebyreducing,in the last analysis,the tax baseof future social provisions. In this way, we can easily hurt those whom we wantedto help initially. Why would a fiscal crisis be betterthan a social one?3! Why not accept short-term hardships in order to avoid medium-term social chaos?In any case, at a certain point one has to deactivatethe time bombsleft behindby communism:during its last phases, welfare entitlementswere simultaneouslyextendedand compromisedby falling standardsof provision; this gap generatedhigh expectations,and currently the citizens demandthe new governmentsto comply with the obligationsmadeby the old ones. Furthermore, in East-Central Europe public welfare spending traditionally implies the empowermentof extremelycostly, unprofessional andcorruptedstateandcorporatistbureaucracies. Healthcareis perhapsthe bestexamplenot only for horror storiesabout servicedelivery but also for invulnerablevestedinterestsof such bureaucracies(empty hospital beds, idle personnel,repeateddiagnoses).32Privatisationof the welfare sectors(or their pluralisation)is not dictatedby ideologicalfanaticism. As in the case of other public sector activities, the state administration inherited from communismmust not be entrustedto carry out major welfare programmes until it goesthroughthe purgatoryof marketcompetition.Paradoxically,the welfare state should be rolled back in order to createefficient and clean public welfare again. Until then, it remains risky to offer the state administrationtaxpayers'money becauseit tendsto expropriateand waste part of it and alter the rules of use accordingto the changingexigenciesof the political game. Yet, if one castsa glanceat comparativedata,it comesas a surprisethat (a) in the courseof the deeprecessionin the first half of the 1990s,the ECE countriesmanagedto increasepublic social expendituresrelative to GOP; (b) they have introduced a couple of new welfare provisions (unemployment,child care) and did not abolishany from amongthe major social transfersand servicesof the former regime; (c) while reducingsocial spendingin certain fields (price subsidies,social housing),they succeeded in maintaining spending(in health care) or even raising it (in pensions, social assistance);(d) thus, what happenedduring the secondhalf of the 1990s was closer to a stagnationthan to a dramatic fall of the share of welfare expenditures;(e) in the courseof the past 12 years, East-Central Europehas undoubtedlydescendedfrom the level of Scandinavianwelfare statesin terms of the ratio of social spendingto the GOP but has not yet reachedthe level of the less advancedOECO countries,not to mentionthat of the comparablemiddle-incomecountriesin Asia and Latin-America (in

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which - due mainly to differencesbetweenthe pensionsystems- the ratio is at leasttwice as low as in the ECE region33). Hence,what elseis this than marking time in the transformationof welfare regimes?Thereis much, less circumstantial,evidenceto supportthis thesis,say the narrators. However, first a word of caution is needed.34 In the beginning,welfare spendingmight rise becausecertain kinds of public expenditurethat had been put under different headings under communism (for example. enterpriselevel social services)becameparts of the social budget (local welfare provision). Further, it may well be that in absoluteterms social provisions droppedwith the GDP (though, by and large, the 1989 levels have been reached or surpassedby now), and probably more people competefor almost the same pool of public transfersand servicesthan before. Hence, the averagestandardsof public welfare provision fell in certain fields (unemploymentbenefit, social assistance)-a reasonindeed for anxiety.Nonetheless,eventhesefalling standardsaretoo high in relation to the economicpotential of the ECE states.More importantly, the large drop in price subsidies of basic goods at the very outset of the transformationwas offset by a surprisingincreasein public pensionsand a less surprising rise of expenditureon social assistance.(Medicine, rents, utilities, and so on haveremainedheavily subsidiseduntil recently.) Public spending on pensions, currently the largest item of social expenditure, grew primarily becausethe chances for claiming early retirementandqualifying for disability pensionshavenot beensignificantly constrained(compare lax regulations, fraud and the aim of curtailing unemployment),and the new governmentswere eager to buy off the pensioners as voters35 with lucrative indexation techniques, growing pension-to-wageratios and a slow increaseof the unusuallylow retirement age. Similarly, in terms of family allowances,the policy makerscould not help yielding to the nationalistlpro-natalistpressuresalso inherent in the communisttradition and did not scaleback the main transfersin this field. (If they nonethelesstried to trim the provisions - as with the austerity packagein Hungaryin 1995 - they first bumpedinto socialrights defended 36) Also, enterprise-level by the constitution, then into voters' preferences. social policy has not disappearedentirely: part of it was taken over by the new local authoritiesand private firms. As regards social assistance,accessto unemploymentbenefits has indeed been made more stringent, and the same applies to poor relief programmes.Nevertheless,despite the fact that certain segmentsof the populationsuffer in many ways from the restructuringof welfare spending, it would be too much to speakabout overall impoverishment(let alone,

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pauperisation)in the ECE region.37 Here poverty is rather shallow: the typical poor person is situated just under the poverty line, fluctuates betweenthe 'poor' and the 'not yet poor' position, and, with the help of an upswing of the economy (and the trickle-down effect), he may leave the bottom of society rapidly before getting stuck in the underclass.The indicatorsof social polarisationin East-CentralEuropeare still well below thoseof the most egalitarianOECD countries.38 So much for (to put it euphemistically)the path-dependent performance of the new welfare arrangements.Now let us seewhethertime also stands still in the world of regime change.As far as universal free coverageis concerned,the targeting of provisions is not sharp and precise, means testingremainedan exceptionto the rule andco-paymentis still minimal as comparedto the market price. If thesetechniqueswere introducedat all, they were loosenedup soon afterward. Accordingly, the pension system, health careand family allowances(not to mention education)continuedto be biasedtowardsthe well-to-do. The processof denationalisingthe welfare sectors hasproved to be protracted,partial and uneven(health care in the Czech Republic, pension schemes in Hungary and Poland); private insurance,if it is not being rolled back, is underheavy stateregulation;the shareof non-publicdelivery andfinancing remainedsmall anddid not attain a critical masswithin welfare activity as a whole.39 To sum up, welfare sectors in East-Central Europe belong to the few relics of the commandeconomywith all its dominantfeaturessuch as over-centralisation,waste, rationing, shortage,paternalism,rent seeking and corruption.40 Private/civic initiative still plays a minor role and freedom of choice is severely constrained. Under the pretext of the solidarity principle, excessiveredistribution takes place, which favours the middle strataat leastas much as thosein need.The whole social system is non-transparent,complicated, full of exemptions and irregular procedures.It relies on a simplistic tax-and-spendphilosophy (it is still a giant pay-as-you-gosystemwith limited savings),which continuesto breed free-riding (tax evasion).This in turn resultsin repeatedtax increases,the aim of which is to keep the welfare promisesembodiedin untouchablebut unaffordably broad entitlements. Higher taxes lead to an upsurge of parasitism -a vicious circle that was already well known under late communism.As a consequence, self-reliantbehaviourcannotbreakthrough the routines of dependencyculture; learned helplessnessand 'public protection from cradle to grave' type expectations prevail; and the prematurewelfare stategoes on debilitating its clients. It distributesalms insteadof offering chancesto work.

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Is this a residual welfare system?Those who constantlytalk about the social costsof the transformation(and hardly mentionits benefits)and who panic about Americanisationcan sit back and relax: alarmismis needless. This is not yet a 'marketeconomywithout adjectives', to usethe term of the former Czechprime minister, Vaclav Klaus. As regardsthe social sectors, ECE is flirting with a Third Road betweencommunismand capitalism, which could be the road to the Third World. 'Muddling Through'

This half-narrativehas virtually no past in the communistera and is less coherentthan the first two. Although it borrowsfrom both of themit places itself outside their lasting controversy.It would be misleadingto believe that this narrative differs from the others only in terms of a detached, deliberately non-normativeinterpretationof welfare history in the ECE countries over the last decade.The narratorsof this 'muddling through' story tend to scrutinise each and every small technical detail of the emerging welfare regimes pedantically. Thus, they have a good opportunity to contribute to an image of social transformationin EastCentral Europe, which is perhapsless spectacularbut more realistic than the other two. In essence,this pedantryrestson two pillars of evolutionary pragmatism. 1. Institutional inertia and the value of incrementalchange.41 In contrast to the intense messagesof the above narratives (,stop changing!', 'start changing!,),nothing dramatichashappened:neithertoo much nor too little. It is equally futile to fear and to expect revolutionary changes.What has taken place, however, is a great variety of 'small transformations'of key importance.42 A whole seriesof new organisationshavebeencreatedfor the public managementof welfare or for private/civic social provision both at the central and local levels. Their interaction may result in strong institutional relations safeguardedby the rule of law as well as by new individual strategies and public awareness.At the same time, old institutions, no matterif they are embodiedin organisations(ministries for social affairs, tradeunions,hospitals)or in policies, routines,values,and so on (propensityfor centralisation,corruption, forced solidarity), may show immenseresistanceto reform. At any rate, gradualism wouldbe desirable, even if it were not induced by institutional inertia, becauseof mounting uncertaintyconcerningthe end-stateof the transformationprocess:which model of the welfare statesshould East-CentralEurope choosefrom the changing Western menu? Since welfare regimes are extremely complex institutions,experimentationis not an evil. One shouldbe preparedfor slow

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progresswith stop-gocyclesin the courseof the trial anderror procedureor for sheerimprovisation. Minor moves and symbolic/creepingchangescan accelerate,add up and become irreversible; but they can also bum out prematurely.43 For instance,symbolic changessuch as even a partial renunciationof sacrosanctprinciples of the old regime (for example, universalism, decommodification,all-encompassingsolidarity) may prove to be a first pushin the re-organisationof the dominantphilosophyof welfare policy. If the rearrangements within the public welfare budget(suchas betweenprice subsidiesand social assistance,or central and local social services)or the moderatestructuralshifts betweenpublic and private initiative point in the same direction, and if these partial changesare synergetic and attain a critical mass, they may becomecomprehensiveand irreversible. In this case, one may start consideringwhether or not a new welfare model is coming into being. One neednot launch a sweepingprivatisationdrive in health care or the pension system in order to ensure that the former monolithic regime cannot return in its classical form. With the establishmentof private insurance companies, new interest networks emerge,legal proceduresand individual routines (long-term saving) build up, the whole capital market is bound to be re-organised- in other words, institutional guaranteesgain strength if positive feedback mechanisms work. To make this happen, one must not shy away from piecemeal engineeringor crafting, providedthat eventuallythey do not force an overambitiousmasterplan on the society. 2. Hybrid solutionsand the 'good state'.However,if the reform process does not happento be self-generatingfor one reasonor another, hybrid arrangementsmay appearon the welfare sceneand stay there for a long time. Given the huge number of welfare subsystemsin which reforms evolve with different pace, or even diametrically oppositechangestake place,44hybridisationwith a greatvariety of intermediarysolutionsis very likely. It may produce, in a quite spontaneousmanner, fairly original (re)combinationsof welfare regimetypes.It would be too simpleto assume that the welfare mix is a three-persongamebetweenthe state, the market and the third sector.Thereare many more actorsinvolved dependingon the social prehistoryof the country and the actualdiversity of configurationsof public regulation,privateinitiative and voluntary activity. Also, theseactors can competeor co-operatein financing as well as in delivering welfare provisions,andsuchlike.Therefore,insteadof continuingthe seculardebate on 'stateversusmarket', the eternalconfrontation,we had better examine how theseinstitutions mingle and merge (or conflict) in various kinds of

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existing partnerships,including also the non-profit sector. The internal proportionsof theseintricate combinationsshould be identified and finetunedif necessary.Meanwhile,one shouldnot refrain from endorsingstatedominatedwelfare mixes, if the marketfails and the governmentis capable of making smartandlimited interventionin the given field of socialpolicy.45 If we revisit the past decade of East-Central Europe from this perspective,we will see neither a landslide marketisation/privatisation process in the social sphere nor a relatively intact welfare state of communism.As a matterof fact, the stateremainedthe main redistributor of welfare.However,privatesocialspendingbeganto rise, andin delivering welfare services,the state initiated 'joint ventures' (such as outsourcing) with NGOs and private firms. The first grand design type of institutional reformsin regulatingpensionsandhealthcarearealsoco-operativeprojects of financing, in which public administration bargains with private and corporatistactorsaboutmixed governance.Even the statewas divided into two: since the early 1990s,centraladministrationshavehad to face largely independentlocal authorities and co-operatewith them as smoothly as possible. Social spendingceasedto be decided upon behind the scenes within the confinesof the communistparty-state:instead,currentlyin every country of East-CentralEuropethereis an openstruggle,in and outsidethe parliament, for every penny of expenditure; a struggle ranging from negotiationsbetweenthe political partiesto forge nationwidesocial deals, throughtripartite agreements,to wildcat strikes.46 As regardsthe emerging hybrids, public institutions of welfare often tum out to be superior to their non-governmentalrivals in terms of efficiency or distributive justice or both. This is especiallythe caseif the 47 It is well known state gets a little help from the non-stateorganisations. that exclusively state-runsocial security is usually not flexible and rich enoughto satisfy the rapidly changingdemandfor protection,particularly for high-quality protection,whereasit obligesthosewho havethese'extra' claimsto be solidaristicwith the 'average'citizen. Privateinsurancemay be a useful partnerhere. Yet in healthcareor in unemploymentprotection,for example,the insurancemarket, if left alone, would 'adverselyselect' and discriminate againstexactly those (the poor, the sick, the unskilled) who badly needsecurity. Also, moral hazardand third-party paymentproblems may arise, and information is far from perfect. In thesefields, the stateis indispensablenot only as a regulator and legal supervisorbut also as a financing agentand a massprovider. Even universal schemescan be just andredistributionmay be consideredas a kind of insurance.Moreover,state spendingon welfare can work as a classicalstabiliserof the businesscycle

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and - like the Asian tigers -a large part of social expenditurecan be regardedas investmentin future growth. Thesetwo setsof argumentsare meantto supportthe final conclusion: East-CentralEuropeanwelfare regimes are muddling through to achieve some degreeof normalcy measuredby an averageof Western standards. The destinationis unclear,the transformersare uncertain,they are perhaps reactive rather than proactive but (potentially) important things are happening.Maybe they can only find second-bestsolutions. These are, however, much more viable and original than the allegedly first-best solutions implied by the first two narratives. Comprehensivesocial contractshavenot yet beenelaborated,but thereare a numberof smalleror largersocialdealsin the making.This type of muddlingthroughremindsthe observer of groping rather than a steadfastpursuit of clear objectives. Actually, it is sometimessimply muddling along. Part of the argumentationof this story needsto be modifyied and some new pillars added to uphold the 'muddling-through'hypothesis.First, the neutralpositionvis-a-visthe governmentrequiresmore subtleevidencein the context of post-communism.Today, in East-CentralEurope,even a market which often fails may prove to be more efficient and fair in welfare policy than mostinterventionmadeby a corrupt, non-professional,corporatiststate. Again, healthcareservesas an exampleof a horrendousgovernmentfailure, probablywith the exceptionof certaindomainsof primary healthservice. Secondly,the adventof parliamentarydemocracyin the region equally contributedto statusquo-orientedandtransformativepolicies.Following an initial period of grace,the new governmentscould not afford (even if they had wanted) to disregard the preferencesof large constituenciesfor maintaining the level and the institutional guaranteesof social safety. The temptationto delay painful decisionsaboutsocialtransformationwas great; the short run costs of postponementcompetedwith changing financial pressures;48 and the endresult was a seriesof ad hoc compromisesattacking and defending 'acquiredrights' and 'moral claims to entitlements'.At the sametime, democracyand the rule of law promotedthe establishmentof new welfare institutionsfrom tradeunionsto private kindergartens,and the introduction of new social policies from openly acknowledgingpoverty to granting free choice of medical doctor to the patients.Thus, both a neoliberal rush and a communist intransigence were relatively unlikely outcomes.This is to reinforce one of the pillars of the third story. Unfortunately, however, it is easierto say that things are complicated than to statehow complicatedthey really are. In fact, it is extremelyhard to draw the balanceof the contradictorydevelopmentsprimarily becauseit is

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almost impossible to measure 'invisible welfare' provided by the new liberties. Interestingly enough, the analysts used to stress those social advantages,which stemfrom the collapseof the economyof shortage,from the new property rights, and from the free entry to the market (end of queuing,consumerchoice,entrepreneurialrights). After all, if one wantsto counterbalancethe pessimisticthesisof the vast psychologicalcostsof the transformation(growing insecurityand loneliness,loss of humandignity in unemploymentandpoverty 49), thereis a long list of additionaladvantagesto quote: free (or less limited) travel, choice of workplace,residence,welfare mix, savings behaviour, association;accessto medicine made abroad, to alternative(natural) treatment,protection of personalityrights as patients, the opening up of the welfare facilities of the nomenklatura, public discussionof future social strategiesand so on. Is it more humaneto keep someoneidle in a loss-makingpublic firm or makehim unemployed,retrain and assisthim in finding a new job? Which sort of anxiety hurts deeper:the fear of losing one'sjob for economicor political reasons?Ask someone who was savedby an emergencyhelicopterbelonging to an international charitableorganisation(a vehicle that had not been permitted to enter the airspaceof the WarsawPact) whetherhis welfare did not increasethereby? Thesecorollaries of new freedomscannot be nonchalantlyput under the headingof 'empty opportunities'that sometimescannotbe exploited even by the winners of the transformation. Owing to its 'invisible' components, there must have been a considerablerise in welfare (which might also appearin tangibleitems like income and wealth) in the first stagesof the transition, not to mention the medium and long-term social consequencesof new liberties such as the improvement of health conditions or old-age security. Obviously, these improvementsmay be dwarfedby the deteriorationof other componentsof welfare.50 Thirdly, incommensurabilityis only one chapterin a large catalogueof problems related to statistical accounting, particularly in those fields in which the fiercest debatestake place (size and characterof poverty, social polarisation).51One example,that of the shadoweconomy,goesbeyondthe problem of statistics.52 Under and after communism, informal welfare activity in the extendedfamily as well as reciprocal self-help relations betweenindividuals and families and even semi-commercialtransactions have included such diverse forms of in-kind or in-cashprotectionas daycare,care for the elderly, housing,health care. Part of theseactivities were traditional and motivated by poverty and backwardness(home-made welfare). The other part was inducedby the plannedeconomywith all its

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friction andrigidity (shortagesand the possibility of free-riding by meansof corruption). Meanwhile, shortagespartly evaporated,you are tempted to bribe thosewho haveaccessto scarcegoodslessfrequently, and free-riding becameincreasinglyembodiedin tax evasion.Nevertheless,if we take the informal economyinto account,we may arrive at 20 to 40 per cent of GDP overall welfare spendingin Poland and Hungary today. Or we may not, dependingon the still non-existentstatistical results. Has this unknown shareof informal welfare grown or diminishedover the pastdecade?If we intendto say somethingreliableaboutthe performanceof the socialsystems in East-Central Europe, we ought to know the answer. Similarly, in describingthe welfare regimesin the region, even a 15 per cent shareof informal welfare is high enoughto regardit as an importantelementof the welfare miX.53 Thus far, however,informal welfare is not lessinvisible than of democratisation.Yet the relative strengthof the the social consequences informal social safetynet could probablyhelp us understandwhy the widely expectedsocial explosion did not occur even in the less fortunate Eastern Europeancountries. Fourthly, in contrastto the other two narratives,which do not pay much attention to the country types, this one, which is really interested in intricacies of the social systems,ought to producea classification scheme within the region.54 According to this, the region departed from the communistversionof a Bismarckianconservativecorporatistregime,which includedsomefeaturesof the socialdemocraticregimetype. During the last couple of years, many of theseSwedish-stylefeatureshave beenreplaced with thoseof a liberal welfare regime.Ironically, any referenceis lacking in the literature to the 'Latin rim' countries with their 'rudimentarywelfare states'.55 No doubt, the readermay learn someinterestingdetails about the corporatistrole of Solidarity in socialpolicy in Poland,the strengthof social democratictradition in the CzechRepublic or the large weight of informal welfare in Hungary. Nonetheless,a much deeper comparative analysis cannotbe sparedif we are to considera seriousresponseto the 'quo vadis' questionin the not too distantfuture.56 CONCLUSION: NO FATAL ERRORS

If the third narrativeis more or lesscorrect,no fatal errors(in any direction) haveyet beenmadein welfarepolicy. Paradoxically,this negativestatement may improve the image of the EU candidatecountries of the region in Brussels. The 'communist welfare state' is being transformed but its relatively tightly knit safety net (including traditional protectingropes)has

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not disappeared.At the same time, transformationis not excessive,the institutional experimentsdo not go much beyond their counterpartsin Western Europe. The welfare regimes in the ECE countries have been instrumentalin cushioningthe blows of marketisationand privatisation,not to speakof the worst economicrecessionof the twentieth century. If mass migration or socialdumpingis to be expected,it is not the socialsystemsof the ECE accession countries that should be blamed primarily.57 Unintentionally, thesesystemsdid a lot to keep the migrants at home and make the exported goods more expensive.If we look around in Eastern Europeas a whole, theseare not negligible accomplishments. As a Hungariansocial policy expert, when askedabout the chancesof EU accessionin his field, said: 'If they do not want to takeus, they will have to find a smarterpretextthan our proud misery.' And he went on: Ironically, in those fields of welfare in which Brusselsis interested today, we are - willy-nilly - comparativelygood, at least in formal terms and becausethe insiders cannotrequire much, due to the low level of social integrationin the Union. Labour and social legislation, equalchances,social dialogueetc., are not too dangerousterrains.As far as safety and health at the workplace is concerned,we will be savedby the continuingdecayof our greatestaccident- and disease - producers,the large state-ownedfirms in coal mining, steel and chemical industries. During the past ten years, these firms have pouredout hundredthousandsof unemployed,impairing therebythe welfarereputationof the country.It is high time for us to seethe sunny side of the collapse:fewer disabledpersons,lesspollution. Currently, the region is preparing for accessionin 2004. The local expertsare pretty sure that the Union will not set new hurdlesin the social sectoreither in terms of performanceindicators or regime characteristics. This prognosisis basedon two foundations:the historical fact that indeed former entrantsdid not have to achievepre-definedlevels, for examplein poverty reduction or life expectancyon the one hand, and pre-defined proportions within their respectivewelfare mixes on the other; and the assumptionthat, becauseof the diversity of welfare state typesand their performanceswithin the EU, Brusselslacks any groundsfor justifying the introduction of new requirementsof convergence.Thus far, the entrance examinationshavereinforcedthe prognosis. Nonetheless,the messagesentby the Union to the candidatecountriesis twofold (or inconsistent).58On the rhetorical level, Brusselshas not ceased to emphasisethat Europerepresentsa uniquesocial philosophyand quality

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on the globe, while, on the pragmaticlevel, it has madeit clear that the welfare statusof the would-be membersdoes not feature at the top of the list of enrolment criteria.59 To be sure, this ambiguity mobilises routine coping strategieson the part of governmentsin ex-communistcountries. Payinglip-serviceto a (foreign) dominantideology while trying to do what they had anyway wantedlhadto do (at home) - this is exactly what the governmentsin the region were trained for under Soviet rule. Their responseis, therefore, pre-programmed:it is an amalgam of avoiding making spectacularmistakeson the surfaceand of pursuing autonomous policies as far as in-depth reforms (or the lack of these reforms) are concerned. The ambiguity of the EU messagereinforcesthesegovernmentsin their own belief that there are no grand questionsof principle in European mattersof welfare. Many of the most importantfacetsof social life are soft and negotiable.You may be weakerin welfare policy if you are stricter in introducing the Schengen rules or more advanced in environment protection,not to speakof marketliberalisation. In any event,the currentadministrationsin the ECE region do not seem to be preparedto launch welfare reforms which might make their Western Europeanpartnersanxious.Recently,the Czechgovernmenthaspractically been paralysedby the semi-formal grand coalition. True, its predecessor also hesitatedto restructurethe pensionschemes,kept unemploymentat an artificially low level and compromised health care privatisation by neglectingto protect the project from potential market failures. In Poland, following a partial marketisationof the pension systemin 1999, the neosocialistgovernmentelectedin 2001 will probablynot ventureto introduce another reform programmeof high political risk, especially today, in a period in which the country'sreputationin Brusselsis decreasing.Finally, in Hungary,the marketisationof healthcareproceedsvery slowly, while the already existing private pillar of the pension systemhas repeatedlybeen weakenedby the national-conservative government.60 The propensity of East-CentralEuropean administrationsto postpone social reforms, and in particular those that are not being forced by the negotiatorsfrom Brussels(or areopenlydisliked by them),may backfIrein the future. Accelerating certain EU-consistent social transformations means neglectingcertain- probably,morevital- regimechangesin welfare.The lack of these changes,some of which would go beyond the current European modelsof socialpolicy, canin turn slow down the economicgrowth generated accessionmay yet resultin a lasting by the accessionitself. As a consequence, persistenceof the socialborder- but this time within Schengenland.

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NOTES 1. This study is basedon researchrelated to the SOCO (Social Consequences of the Economic Transformationin East-CentralEurope) programme at the Vienna Institutefor Human Sciences (www.iwm.at). For earlier assessments,see Zsuzsa Ferge et al., 'Societies in Transition. InternationalReport on the Social Consequences of Transition', SOCO Survey, Institute for Human Sciences,Vienna, 1996; Janos Matyas Kovacs (ed.), Social Costs of Economic Transformationin Central Europe, special issue of the International Reviewof Comparative Public Policy 7 (1996). An earlier version of the paperwas issuedas a EuropeanUniversity Institute Working Paper- RSC 2000150, Florence. 2. JanosMatyasKovacs, 'Frustrationwith Liberalism?"Sound"Interventionismin EastEuropean Economics',in Martin J. Bull andMike Ingham(eds.),Reformofthe SocialistSystemin Central and EasternEurope(London: Macmillan 1998),pp.77-92. 3. With the exceptionof the SOCO Survey (see Ferge et at., 'Societiesin Transition'), Ulrike Giitting, Transformationder Wohlfahrtsstaatenin Mittel- und Osteuropa.Eine Zwischenbilanz (Opladen:Leske und Budrich 1998), and KatharinaMiiller, The Political Economyof Pension Reformin Central-EasternEurope (Cheltenham:Edward Elgar 1999), most of the studiesare only partially comprehensiveand/orcomparative. 4. The potentialliteraturethat canbe cited is enormous- including especiallythe work of Deacon, Ferge,Nelson and Standing.For examplesseeBob Deacon,'Developmentsin East-European SocialPolicy', in D.C. Jones(ed.),NewPerspectivesofthe WelfareStatein Europe(Londonand New York: Routledge 1993); Zsuzsa Ferge, 'Social Policy Reform in Post-Communist Countries:Various Reform Strategies',Social Reformin East-CentralEurope: New Trends in Transition. Prague Papers on Social Responsesto Transformation3 (1995), pp.l-38; Zsuzsa Ferge, 'Freedomand Security', in Kovacs (ed.), Social Costsof EconomicTransformationin Central Europe,pp.l~3; JoanM. Nelson, 'The Politics of Pensionand Health-CareReforms in Hungary and Poland',in JanosKornai et at. (eds.),Reformingthe State: Fiscal and Welfare Reform in Post-Socialist Countries (Cambridge: Cambridge University Press 2001); Guy Standing, 'Social Protectionin Central and EasternEurope: A Tale of Slipping Anchors and Torn Safety Nets', in Gosta Esping-Andersen(ed.), Welfare States in Transition. National Adaptationsin Global Economies(ThousandOaks: Sage1996). 5. Giitting, Transformation,pp.240-47;Martin Rein, AndreasWiirgotter and Barry L. Friedman (eds.), Social Benefits after Communism:The Role of Enterprises (Cambridge: Cambridge University Press1996). 6. Julia Szalai, 'On the Border of State and Civil Society in Hungary: Some Aspectsof SelfGovernance in the Period of Transition', in Kovacs (ed.), Social Costs of Economic Transformationin Central Europe,pp.215-33. 7. Gosta Esping-Andersen,The Three Worlds of Welfare Capitalism (Princeton,NJ: Princeton University Press 1990); Richard M. Titrnuss, Social Policy: An Introduction (London: Macmillan 1974); Adalbert Evers and Thomas Olk, Wohlfahrtspluralismus(Opladen,1995). Seealso the literature citedin note 4, as well as Jiri Vecernik, Markets and People. The Czech ReformExperiencein a ComparativePerspective(Aldershot: Avebury 1996),pp.l96-7. 8. Standing,'Social Protection',p.227. 9. Jacek Kuron, 'Man muS traumen. Soziale Gerechtigkeitals soziale Bewegung', Transit 6 (1993), pp.6-24;JohnMyles and RobertJ. Brym, 'Marketsand Welfare State:What Eastand West Can Learn form Each Other', in ZsuzsaFergeet al. (eds.),Social Policy in a Changing Europe(Frankfurt/Boulder:CampuslWestview1992),pp.27-37. 10. ZsuzsaFerge, 'Social Policy Regimesand Social Structure.Hypothesesaboutthe Prospectsof Social Policy in Central and EasternEurope', in Ferge et al., Social Policy in a Changing Europe, pp.201-22;ZsuzsaFerge, 'The ChangedWelfare Paradigm:The Individualisationof the Social',SocialPolicy and Administration3111 (1997),pp.20-44;ZsuzsaFerge,'And What if the State FadesAway: The Civilizing Processand the State', in P. Taylor-Gooby and S. Svallfors (eds.), Attitudes Toward Welfa~ Policies in Comparative Perspective(London: Blackwell 1998). II. PaulPierson,Dismantlingthe Welfa~ State.Reagan.Thatcher;and the Politics ofRetrenchment (Cambridge:CambridgeUniversity Press 1994); Paul Pierson(ed.), The New Politics of the

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12.

13. 14. 15. 16. 17. 18.

19. 20. 21. 22.

23.

24.

25. 26. 27. 28. 29.

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WelfareState(Oxford: Oxford University Press2(01); N. Ploug andJ. Kvist, SocialSecurityin Europe: Developmentor Dismantlement?(The Hague:Kluwer Law International1996);Stefan Svallfors and Peter Taylor-Gooby (eds.), The End of the Welfare State? Responsesto State Retrenchment(London: Routledge1999). Bob Deaconand Michelle Hulse, 'The Making of Post-communistSocial Policy: The Role of InternationalAgencies',Journal ofSocialPolicy 26 (1997),pp.43-62;ZsuzsaFerge,'A Central EuropeanPerspectiveon the SocialQuality of Europe',in Beck et al. (eds.),The Social Quality of Europe, pp.175-9;ZsuzsaFerge, 'The Actors of the HungarianPensionReform', in Janos Matyas Kovacs (ed.), Small Transformations:The Politics of Welfare Reform- East and West (Vienna: IWM 2(01); Standing,'SocialProtection',pp.230-31,251. Anthony B. Atkinson andJohnMickiewright, The EconomicTransformationin EasternEurope and the Distribution ofIncome(Cambridge:CambridgeUniversity Press1992). Gotting, Transformation,pp.261-2. Ferge,'The Actors of the HungarianPensionReform'; Miiller, The Political Economy. BalazsKremer, 'Hautecoutureneccekes frivol szociaIishaI6k' (HauteCoutureand Frivolous Social Nets), CafeBabel 2 (1998), pp.39-51;Standing,'SocialProtection'. Seethe literaturecited in note 4, as well as Vecernlk, Marketsand People,pp.92-119. 'Childrenat Risk in CentralandEasternEurope:Perils and Promises', Economiesin Transition Studies,RegionalMonitoring ReportNo.4, Aorence, 1997; Andrea Giovanni Comia, 'Ugly Facts and Fancy Theories: Children and Youth during the Transition', Innocenti Occasional Papers,EconomicPolicy SeriesNo. 49 (Aorence:UNICEF 1995);AndreaGiovanniCorniaand RenatoPaniccia,'The DemographicImpactof SuddenImpoverishment:EasternEuropeduring the 1989-94 Transition', Innocenti Occasional Papers, Economic Policy Series No. 49 (Aorence: UNICEF 1995); 'Poverty, Children and Policy: Responsesfor a Brighter Future', Economiesin Transition Studies,RegionalMonitoring ReportNo.3 (Aorence:UNICEF 1995). Anthony B. Atkinson, 'SocialPolicy, EconomicOrganizationand the Searchfor a Third Way', in Fergeet al., Social Policy in a ChangingEurope,pp.225-37. Endre Sik (ed.), From Improvisation to Awareness?(Budapest:Institute of Political Sciences 1998). Seenote 4, and Vecernlk, Marketsand People,pp.217-40. CompareDeaconandHulse, 'TheMaking of Post-communistSocialPolicy', andScottThomas, 'Social Policy in the Economicsin Transition: The Role of the West', in E.B. Kapsteinand M. Mandelbaum(eds.),Sustainingthe Transition: The Social SafetyNet in PostcommunistEurope (BrookingsInstitution Press1997),pp.147-66. Jon Elster, Claus Offe and Ulrich Preuss,ConstitutionalDesign in Post-CommunistSocieties. Rebuildingthe Ship at Sea (Cambridge:CambridgeUniversity Press1998); Laszl6 Szamuely, 'The Social Costsof Transformationin CentralandEasternEurope',Kopint-Datorg Discussion Papers No. 44 (Budapest:,Institute for Market Research1997); Claus Offe, 'The Politics of SocialPolicy in EastEuropeanTransitions:Antecedents,AgentsandAgendaof Reform,Social Research60/4 (1993), pp.1-36;ZsuzsaFerge, 'Social Policy Challengesand Dilemmasin ExSocialist Systems',in Joan M. Nelson et al. (eds.), Transforming Post-CommunistPolitical Economies(WashingtonDC: National AcademyPress1997),pp.299-322. Mark Kramer, 'SocialProtectionPoliciesand SafetyNets in East-CentralEurope:Dilemmasof the PostcommunistTransformation',in Ethan B. Kapstein and Michael Mandelbaum(eds.), Sustaining the Transition: The Social Safety Net in PostcommunistEurope (Brookings Institution Press1997),p.51. Kramer, 'Social Protection', pp.48-9; Branko Milanovic, Income, Inequality, and Poverty During the Transition (Washington,DC: The World Bank 1997). Leszek Balcerowicz, Socialism, Capitalism, Transformation (Budapest: Central European University Press1995),pp.261-8. Laszl6 Csontos,JanosKornai and Istvan Gyorgy T6th, 'Tax Awarenessand the Reform of the Welfare State.HungarianSurveyResults', Economicsof Transition 6 (1998),pp.287-312. JanosKornai, 'Reform of the Welfare Sectorin the Post-CommunistCountries:A Normative Approach',in Nelsonet aI., TransformingPost-CommunistPolitical Economies,p.281. JanosKornai, 'Payingthe Bill for GoulashCommunism:HungarianDevelopmentand MacroStabilization in a Political-Economy Perspective',Discussion Paper No.1748 (Cambridge:

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HarvardInstitute for EconomicResearch1996); Lajos Bokros and JeanJacquesDethier(eds.), Public FinanceReformDuring the Transition: The ExperienceofHungary (Washington:World Bank 1998). 30. Kramer, 'Social Protection',pp.56-9,Kathie Krumm, Branko Milanovic and Michael Walton, 'Transfersand the Transitionfrom Socialism:Key Tradeoffs', Policy ResearchWorking Paper No. 1380 (WashingtonDC: World Bank 1994). 31. Seenote 29. 32. JanosKornai, Az egeszsegugy reformjar61 (On the Reform of Health Care) (Budapest:KJK 1998); Peter Mihalyi, Magyar egeszsegugy:diagn6zis es terapia (Hungarian Health Care: Diagnosisand Therapy) (Budapest:SpringerOrvosi Kiad6 2000); Eva Orosz, Conceptsand Realitiesof Reform: An Accountof the Transformationof the Hungarian Health-CareSystem (manuscript,2001). 33. Kornai 'Reform of the Welfare Sectorin the Post-CommunistCountries',pp.290-94;Kramer, 'SocialProtection',pp.72-77. 34. Ivan CsabaandAndrasSemjen,'WelfareInstitutionsandthe Transition:In Searchof Efficiency andEquity', DiscussionPaperNo. 47 (Instituteof Economics,HungarianAcademyof Sciences 1997),pp.5-9; Gotting, Transformation,pp.264-8. 35. Jeffrey Sachs,'PostcommunistPartiesand the Politics of Entitlements',Transition 6/3 (1995), pp.I-4; World Bank, Averting the Old Age Crisis. Policies to Protect the Old and Promote Growth (policy ResearchReport,Oxford: Oxford University Press1994). 36. Andras Saj6, 'How the Rule of Law Killed Hungarian Welfare Reform', East European ConstitutionalReview5/1 (1996), pp.31-41. 37. SeevariousWorld Bank reports,induding UnderstandingPovertyin Poland (1995), Hungary: Structural Reformsfor SustainableGrowth (1995), Hungary: Poverty and Social Transfers (1996), and Making Transition Work for Everyone: Poverty and Inequality in Europe and Central Asia (2000), all publishedby the World Bank, WashingtonDC. 38. E.g., Kramer, 'Social Protection',pp.97-102;Vecernik,Marketsand People,pp.47-92. 39. Marek G6raandM. Rutkowski, 'New Old-Age PensionSystemin Poland',Spectrum2 (2000), pp.11-14; Jerzy Hausner, 'Conditions for the SuccessfulReform of the PensionSystem in Poland',in Kovacs (ed.), Small Transformations;Martin Potucek,Crossroadsof CzechSocial Reform(in Czech)(Prague:SLON 1999); Vecernik,Marketsand People,pp.191-217. 40. Kornai, 'Reform of the Welfare Sector in the Post-CommunistCountries', p.273; Andrzej Rychard, 'Beyond Gains and Losses: In Searchof "Wmning Losers"', Social Research63 (1996), pp.465-87. 41. See,for example,NicholasBarr (ed.), Labor Marketsand Social Policy in Central and Eastern Europe (Oxford: Oxford University Press1994); JoanM. Nelson, 'Social Costs,Social-Sector Reforms,andPolitics in Post-Communist Transformations' , in Nelsonetai., TransformingPostCommunistPolitical Economies,pp.245-7;Istvan Gyorgy T6th, 'A j6leti rendszeraz atmenet idoszakaban'(The Welfare Systemin the Periodof Transition),KozgazdasagiSzemle4 (1994), pp.313-41 and his Gazdasagiaktivitas vagy szocialis tamogatasok?(Economic Activity or Social Assistance?)(Budapest: Tarki 1998); Hans-JiirgenWagener, 'The Welfare State in Transition Economiesand Accession to the EU' (Working Papersof the Robert Schuman Centre,Florence,2001) (also this volume). 42. Barr, LabourMarkets. 43. Gotting, Transformation,pp.268-274. 44. Ibid., pp.21-6. 45. Nicholas Barr, 'The Role of Governmentin a Market Economy', in Barr, Labor Markets, pp.29-50; Ivan Csaba, 'Fisk3.1is illuzi6k es redisztribUci6s csalas' (Fiscal Illusions and RedistributionFraud),Sztizadveg(Spring, 1997),pp.llO-13. 46. M. Cichon and L. Samuel(eds.),Making Social Protection Work: The ChallengeofTripartism in Social GovernanceforCountriesin Transition (Budapest:ILO 1994). 47. Csaba,'Fisk3.1is'; PeterPete, 'Infantilizmus vagy racion3.1isalulinform3.1tsag?,(Infantilism or Rational Ignorance?),Sz6zadveg(Spring 1997), pp.131-6; PeterOrszagand JosephStiglitz, 'RethinkingPensionReform: Ten Myths about Social SecuritySystems',in R. Holzmannand J. Stiglitz (eds.),New IdeasAboutOld Age Security(Washington:The World Bank 2001). 48. Gosta Esping-Andersen(ed.), Welfare State in Transition. National Adaptations in Global

204

49. 50. 51. 52. 53.

54. 55. 56.

57.

58. 59.

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Economies(ThousandOaks: Sage1996); PeterGedeon,'Hungary:Social Policy in Transition', East European Politics and Societies9 (1995), pp.433-58; Bela Greskovits, 'The Use of Compensationin Economic Adjustment Programs',Acta Oeconomica45 (1993), pp.43--68; JanosKomai, StephanHaggardand Robert Kaufman (eds.),Refonningthe State: Fiscal and WelfareRefonnin Post-SocialistCountries(Cambridge:CambridgeUniversity Press2001). Nelson, 'Social Costs',p.251; Sachs,'PostcommunistParties'. Janos Matyas Kovacs, 'Boxing the Shadow? "Neoliberals" and Social Quality after Communism',in WolfgangBeck, Laurentvan der Maesenand Alan Walker (eds.),The Social Quality of Europe (Dordrecht:Kluwer 1997),pp.207-15. Ferge et aI., 'Societiesin Transition'; Kramer, 'Social Protection',pp.77-81; BarbaraBoyle Torrey, Timothy M. SmeedingandDebraBailey, 'VulnerablePopulationsin CentralEurope',in Nelsonet aI., TransfonningPost-CommunistPolitical Economies,pp.351-70. Gotting, Transfonnation,pp.258--60,273. Cf. JaneLewis. 'Voluntary and Informal Welfare', in R. Pageand R. Silbum (eds.), British Social Welfare in the TwentiethCentury (London: Macmillan 1999); JanosKomai, 'Hidden in an Envelope: Gratitude Paymentsto Medical Doctors in Hungary', in Ralf Dahrendorfand Yehuda Elkana (eds.), The Paradoxesof UnintendedConsequences(Budapest:CEU Press 2000). Bob Deacon,'EastEuropeanWelfare: Past,PresentandFuturein ComparativeContext',in Bob Deaconet al. (eds.),The New EasternEurope. SocialPolicy Past, PresentandFuture (London: Sage),pp.l-30, and Gotting, Transfonnationare exceptionsto the rule. StephanLeibfried, 'Towardsa EuropeanWelfare State?On IntegratingPoverty Regimesinto the EuropeanCommunity', in Fergeet al., Social Policy in a ChangingEurope,pp.253-4. The most recentcomparativeproject of the SOCOprogrammestudiesthe evolution of welfare regimes in East-CentralEurope during the past 12 years (see Don Kalb and JanosMatyas Kovacs(eds.),Institutional Refonnin SocialPolicy. East-CentralEuropein a EuropeanContext (1989-2001)(Vienna: IWM 2001). While this study's main thrust is to reconstructthe main narrativesof welfare policy, this latter volume presentsthe recenthistory of welfare institutions in the region. Cf. JensAlber and Guy Standing, 'Social Dumping, Catch-Up or Convergence?',European Journal of Social Policy 10/2 (2000), pp.99-119;Giuliano Amato andJudy Batt, 'Final Report of the Reflection Group on "Long-term Implications of EU Enlargement":The Nature of the New Border', Robert SchumanCentre, European University Institute, Florence, Forward StudiesUnit, EuropeanCommission,Brussels,2000; Kalb and Kovacs, Institutional Refonn; Vladimir Rys, 'The Entry of Transition Countriesof Central Europein the EuropeanUnion', CzechSociologicalReview8 (2000), pp.131-9;and Wagener,'The Welfare Statein Transition Economies'. Cf. Claus Offe, The Democratic Welfare State. A European Regime under the Strain of European Integration (Vienna: Institute for Advanced Studies 2000); Georg Vobruba, Integration + Erweiterung.Europa im Globalisierungsdilemma(Wien: Passagen Verlag 2001). The accessioncountrieshaverepeatedlybeenmadeto understandthat migration is the issuein the field of employmentand social policy. It is superiorto healthpolicy, equalopportunities,or social dialoguewhen it comesto the final decisionaboutco-optation.According to the present stateof affairs (October2001), Chapter13 of the accessiontalks, which dealswith the issuesof employmentand social policy, hasbeenprovisionally closedin the caseof the ECE region. The Commission'sdecisionsare constrainedby the following - ratherfoggy - stipulations: 'While the funding andorganisationof socialprotectionsystemsremainthe responsibilityof individual Member States,the EU requiresthat thesesystemshave the capacityto developand operate sustainableand universally applicable social protection systems in line with the Treaty objectives.The systemsof the candidatecountriesmust also be capableof co-ordinatingwith thosesystemscurrentlyoperatingin the EU which arethemselvesdevelopingin a very dynamic way and undergoingsignificantreform' (http://europa.eu.intlcomm/enlargementlchap13/index. htm). Kalb andKovacs,Institutional Refonn;G6raandRutkowski, 'New Old-Age PensionSystemin Poland';Potucek,Crossroadsof CzechSocial Refonn;Jiri Vecemik, 'Neither Fish, nor Fowl: The Hesitation(Balancing?)of CzechSocial Policy' (mimeo, IWM 1999).

Abstracts

Introduction: Diversity and Adaptationin the EnlargedEuropean Union, by Jan Zielonkaand PeterMair It is now taken as given that the EuropeanUnion will be a much more

diversifiedentity following its plannedeastwardenlargement.But precisely how much diversity will there be, and what are its implications? These questionsare addressedin this article, as well as in the broadercollectionof essayswhich it introduces. By introducing a broad range of empirical evidence,we seekto challengemany of the theoreticalassumptionsabout the scope, form and meaning of diversity in the process of European integration, and especially in the context of the forthcoming eastward enlargement.In fact, the map of unity and diversity in the enlargedEU provesto be extremelycomplex,and does'notsimply correspondto the old East-Westdivide. We also suggestthat much of this diversity should be seen as welcome rather than as threateningfor the Union, and that the enlargementprocessconstitutesan important factor generatingadaptation and accommodation.

Eastward Enlargementof the EuropeanUnion and the Identity of Europe,by Dieter Fuchs and Hans-DieterKlingemann The constitutionof a Europeandemoswith a collectiveidentity is oneof the preconditionsfor adjustingthe legitimacy problemof the EuropeanUnion (EU). The analysis attempts to clarify empirically whetherthereis sufficient commonality regarding Europeans' political value orientations to substantiatea collective identity. Particularly in view of the European Union's eastwardenlargement,the question arises whether widespread cultural heterogeneityin Europeallows the formation of a Europeandemos at all. In Europe we can identify a West-East axis of political value orientations.Democraticattitudesdecreasethe further to the East while at the sametime thereis an increasein etatistorientations.Thresholdscan be observedwhich distinguish WesternEuropeancountries on the one hand and Centraland EasternEuropeancountrieson the other. Within the group of CentralandEasternEuropea further distinctioncanbe madebetweenthe three Slavic republics of the former Soviet Union and the rest of the countries.Thesefindings supportHuntington'stheory of civilisations.

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Culture and National Identity: 'The East' and EuropeanIntegration, by David D. Laitin Relying on data from language use, religion and exposure to popular culture, this contribution evaluatesthe extent to which there is a cultural divide separatingmemberstatesof the EU from EasternEuropeanapplicant states.To addressthis issue,the study makesthreeclaims. First, despitethe vibrancy of national cultures within Europe, there is an emergentcultural configurationthat unitesthe continent.Second,the applicantstates arevery much part of this European cultural zone. In fact, with the cultural characteristicsof the original six members of the EC held up as the Europeanmodel, the applicantstatesare closeron severaldimensionsthan are the later entrantsinto the EC. Third, there are greaterincentivesfor individuals in the applicant states to co-ordinate culturally with the Europeanconfigurationthan for individuals living in the heart of Europe. The conclusionthereforeis that thereis no evidenceof a cultural divide that would justify holding back membershipof EasternEuropeanstatesinto the EU. Discomfortsof Victory: Democracy,Liberal Valuesand Nationalismin Post-CommunistEurope,by Vladimir Tismaneanu This article tries to identify the main threats to post-communistliberal democracies,especially those perils related to the weaknessof pluralist traditions,institutions,andvaluesandthe rise of movementsand ideologies rootedin cultural andpolitical malaise,ressentiment,and disaffection.Nine such perils are identified in the secondhalf the article, including Leninist legacies, salvationist popular sentiments, the rhetoric of reactionary nostalgia,the fluidity of political formations,the crisis of values,authority, and accountability, and the tensions between individualistic and communitarianvalues. The concernhere is with a diagnosisof the main vulnerabilities of Eastern Europe's post-communiststates in order to evaluateprospectsfor further democraticconsolidationandrisks for the rise and affirmation of ethnocraticpartiesand movements. Understandingthe post-communistpolitical and cultural situation, including persistent isolationist, anti-globalisation,populist and nationalisttrends,is of critical importancefor interpretingthe main directionsthesecountrieswill pursue in their efforts to join the EuropeanUnion institutions.

ABSTRACTS

207

Making Institutionsin Centraland EasternEurope,and the Impact of Europe,by Darina Malova and Tim Haughton The end of communismin Centraland EasternEuropeoffered the region a unique opportunity for institutional redesign. Thanks to the variety of historical experiences,inherited structures, transition paths and deal sweetenersduring the round-tabletalks, post-communistEurope initially witnessedmuch institutional diversity. Throughoutthe courseof the past decade,however, there has been a notable convergenceof institutional designsacrossthe region. The processof convergencehas been,in part, a responseto domesticpolitical concerns,but the demandsof the European Union have also played a role. This article plots the courseof institutional developmentin the region, outlining someof the majorcasesof institutional redesignandhighlighting both the positive andnegativeimpactof 'Europe' on the process. Making Markets and EasternEnlargement:Diverging Convergence? by LaslJo Bruszt This study deals with the extent and content of 'Europeanisation'in the Central and EastEuropean(CEE) countriesat the level of market making. It arguesthat Europeanisationat the level of market making was about creatingstateswith strong capacitiesto preserveand regulatemarketsand with increasedand reconstructedadministrativeand planning capabilities. The most successfulCEE countrieswith their strongstatesand weak social and economicactors convergedtowards a moving target, that is, towards EU countries in the process of supranationalmarket making with dramaticallydifferent constellationof powersamongkey economicactors. The paper discussesthe specifics of national level market making in the CEE countries, the factors of divergence within the region, and the 'diverging convergence'betweenthe CEE and the EU countries. Health not Wealth: Enlargingthe EMU, by Daniel Gros Economic health not wealth should be the decisive criterion when considering the prospects of the Central and East European (CEE) candidatesfor EU membershipand the capacity of the EU to enlarge. Viewed this way the outlook is promising. The CEE countriesare still very poor, comparedto mostof the existingEU members,but they arealso much

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more dynamic. Growth rates are generallyexpectedto remain around4-5 per cent in CEE for the foreseeablefuture, comparedto about2-3 per cent for the EU. This still implies that full catch-upin terms of GDP per capita will take decades,rather than years, but full catch-up is not the relevant criterion if one is concernedaboutenlargement.Experiencein the EU has shown that problemsare much more likely to arise from establishedrich member countries with stagnanteconomies(Belgium in the 1980s and Germanytoday) than poor, but more dynamic states(such as Portugaland Ireland today). The fact that most of the so-called 'periphery' is now growing more strongly thanthe 'core' confirms that EU integrationbenefits poorercountrieseven more.

The WelfareStatein TransitionEconomiesand Accessionto the EU, by Hans-Jiirgen Wagener Welfare statereform in East-CentralEuropecanbe divided into two phases: in the first phase,when liberalisation,stabilisationand privatisationwere of primary importance,only minor or absolutelynecessaryreform stepswere taken. This soonled many countriesinto fiscal problemsthat triggeredthe secondphaseof substantialpension and health system reforms. Having been already part of the European welfare state tradition in the precommunistperiod, the countriesof East-CentralEuropewere not prepared to take over the essentiallyprivate three pillar model of the World Bank. Insteadthe forerunnersof reform, suchas Hungary,Polandand Latvia, are developing,togetherwith someincumbentEU members,a new European four pillar model with a specific pUblic-private mix. Even if the social acquis communautaireis not very restrictive for the candidatestates,they seemkeento join the Europeanwelfare stateculture.

Approaching the EU and Reaching the US? Rival Narratives on Transforming Welfare Regimes in East-Central Europe, by Janos Matyas Kovacs Post-communistwelfare regimes are frequently portrayed as a hybrid consistingof the relics of communistsocial policy and a neophyteimitation of the US model of welfare. Both componentsof that hybrid are regardedas incompatible with the 'Europeansocial model'. At the same time, most welfarereformersin East-CentralEuropetry to avoid falling into the trap of first, conservingthe statist, inefficient and pseudo-egalitariancharacterof

ABSTRACTS

209

the old system of social policy; second, seeking new forms of welfare collectivism along the national-conservative/populist 'third roads' between capitalism and communism; third, triggering popular discontent by dismantlingthe old welfare regimestoo rapidly, or in a haphazardway; and fourth, targeting an end-state which has become unsustainablein the Western world during the past two decades.Meanwhile, the emerging welfare regimesin the region are far from being identical and the reformers do not find stableinstitutionalarrangements in the West to copy. In an effort to makesenseof this complexpicture, the paperexamineswhat has 'really' happenedin the welfare sectorsin the region during the past decadeby presentingthree dominantnarrativesof the social transformation:'leaping in the dark', 'marking time' and 'muddling through'.

Notes on Contributors

Laszlo Bruszt is Associate Professor at the Department of Political Sciencesof the Central EuropeanUniversity, Budapest.His major interest is in political sociologyand economicsociology,and his more recentwork focuseson the interplay betweenstate building, institutional development and economic change.He is co-authorwith David Stark of Postsocialist Pathways:TransformingPolitics and Property in EasternEurope (1998), a comparative study of the opportunities and dilemmas posed by the simultaneousextensionof propertyrights and citizenshiprights. Dieter Fuchs is Professorof Political Scienceat the University of Stuttgart. His major researchareaslie in the fields of comparativepolitics, the theory of democracyand political sociology. He is co-editor of Citizens and the State (1995), and he has recently contributed 'The DemocraticCulture of Unified Germany', to Pippa Norris (ed.), Critical Citizens (1999) and 'Demos und Nation in der Europaischen Union', to Hans-Dieter Klingemann and FriedheImNeidhardt(eds.), Zur ZukunJtder Demokratie (2000).

Daniel Gros is Director of the Centre for EuropeanPolicy Studies, the leading think-tank on Europeanaffairs. He has servedon the staff of the IMF, as an advisor at the EuropeanCommission,and as visiting professor at the Catholic University of Leuvenandthe University of Frankfurt.He has advisedthe governmentsof Russia,Ukraine and other Centraland Eastern Europeancountrieson trade and exchangerate mattersand their relations with the EU, andhe is currently advisorto the EuropeanParliament.Among his co-authoredbooks are Winds of Change: Economic Transition in Central and EasternEurope (1995), The Euro Capital Market (1999), and EuropeanMonetaryIntegration (1999). Tim Haughton is a doctoral studentat the School of Slavonic and East EuropeanStudies,University CollegeLondon. His doctoratethesisattempts to explain Slovakia'spolitical trajectorysinceindependence. He haswritten a number of articles on Slovak politics for a variety of publications including Europe-AsiaStudiesand SlovakForeign Policy Affairs. He also writes regularly for the leadingSlovak newspaperSme.

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211

Hans-DieterKlingemann is Professorof Political Scienceat the Freie UniversiUit Berlin and Director of the ResearchUnit on Institutions and Social Changeat the Social ScienceResearchCentre Berlin (WZB). His presentresearchfocus is on the quality of the democraticprocessandon the consolidationof democraticsystems.His books include Citizens and the State(1995),A New HandbookofPolitical Science(1996),Mapping Policy Preferences.Estimatesfor Parties, Electors, and Governments1945-1998 (2001), and Wahlen und Wahler. Analysenaus Anlassder Bundestagswahl 1998 (2001).

JanosMatyasKovacshasworkedas a PermanentFellow at the Institute of HumanSciencesin Vienna since 1991.In 1973 he becamea memberof the Institute of Economics,Hungarian Academy of Sciences,Budapest,and since 1984 he has been teaching the history of economic thought and political economy of the transformation at Eotvos L6nind University, Budapest.His publicationsinclude Reformand Transformationin Eastern Europe (co-edited with Marton Tardos, 1992), Transition to Capitalism? The CommunistLegacyin EasternEurope (1994), and 'Rival Temptations - PassiveResistance.Cultural Globalizationin Hungary', in PeterBerger and SamuelHuntington(eds.),Many Globalizations(2002). David D. Laitin receivedhis BA from SwarthmoreCollegeand his Ph.D. at the University of California, Berkeley.He hasconductedfield researchin Somalia,Yorubaland(Nigeria), Catalonia(Spain),and Narva (Estonia).He is the author of Politics, Languageand Thought: The Somali Experience (1977), Hegemonyand Culture (1986), LanguageRepertoiresand State Construction in Africa (1992) and Identity in Formation: The Russianspeaking Populations in the Near Abroad (1998). He is Professor of Political Scienceat StanfordUniversity. PeterMair is Professorof ComparativePolitics in Leiden University in the Netherlandsandis co-editorof WestEuropeanPolitics. He is authorof Party SystemChange (1997), and co-author of RepresentativeGovernmentin Modern Europe (3rd edn., 2000). His co-editedbooks include How Parties Organize(1994), and ParteienaufkomplexenWahlermarkten(1999). Darina Malova is AssociateProfessorof Political Scienceat Comenius University in Bratislavaand AcademicDirector of 'AcademiaIstropolitana Nova', the first private institute for graduate studies in Slovakia. Her researchinterests focus primarily on the institutional and behavioural

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changesin post-communistSlovakia, and since 1993 she has contributed the 'Slovakia' section to the European Journal of Political Research's Political Data Yearbook.

Vladimir Tismaneanu is Professor of Politics at the University of Maryland (College Park), editor of the journal East EuropeanPolitics and Societies,and authorof numerousbooks including Fantasiesof Salvation: Nationalism, Democracy,and Myth in Post-CommunistEurope (1998). He is editor of The Revolutionsof 1989 (1999). Hans-Jiirgen Wagener studied economics in Munich and Berlin, and worked at the Osteuropa-InstitutMunich and at the Vienna Institute for InternationalEconomicComparisons.From 1975 to 1993 he was Professor of Economics at the Rijksuniversiteit Groningen, The Netherlands,with which he is still affiliated. Since 1993 he has beenProfessorof Economics at the European University Viadrina Frankfurt (Oder) and managing director of the Frankfurt Institute for TransformationStudies. Jan Zielonka is Professorof Political Scienceat the EuropeanUniversity Institute in Florence,on leave from Leiden University in the Netherlands. He is authorof Explaining Euro-paralysis: Why Europe is Unable to Act in International Politics (1998) and editor of the two-volume work DemocraticConsolidationin EasternEurope (2001).

Index

Accessionpartnership 109 Acquiscommunautaire 4,6,8, 1l0, 165 Agenda2000 7 Agriculture, 12, 144-5 also see Common Agricultural Policy (CAP) Albania 9, 29-30, 32, 34, 38-43, 50, 52, 83, 91,175 AmsterdamTreaty 17-19,154,162 AssociationAgreements 18 Asylum-seekingimmigrants 57 Austria 18, 60-63, 69, 72, 77, 152, 155 Balcerowicz,L. 156, 172-3, 203 Balkans 81, 170 Baltic States 80--84, 93, 112, 162, 170, Banking and finance 124, 134, 139, 142, 146,156,161-3,164-73,182,185,203 Belarus 9,29, 34, 37-8, 40, 83 Belgium 12,61 Bordersand bordercontrol 18,50,70,84, 165, 177, 186 Bosniaand Herzegovina 44, 46, 97 Brazauskas,A. 91 Bruszt, Laszlo 11-12, 119-38 Budgetaryand fiscal issues xi, 146, 149, 157,161-63,165,168,189-90,216 Bulgaria 10, 18,61,70,80,82,91-2, 113-17, 133,.143-5,150, 162, 167 Cabinets 106-7, 119 Capitalism 98,122-3,134-5,170--73,178, 186-7,193,202-3 Ceausescu,N. 85, 93 Centraland EasternEurope(CEE) 101-20, 121-40, 141-51, 173 CIS (CommonwealthofIndependentStates) 166, 170 Civil society 83,99, 109, 132, 181,201 CommonAgricultural Policy (CAP) 7, 144-5 Communistparty 91, 94, 104, 195

Constitutions II, 19,20--25,81-100, 101-20,124,160,184,191,223 Copenhagencriteria 122-5, 135 Corruption 12,81,85,91,94,109, 125, 129, 132, 192-3, 198 Council of Europe 59, 69 Croatia 38,82,89,167, 170 Cultural issues 19-54,55-80,81-100 CurrencyBoard 148 CzechRepublic 8, 14,40,47,61,70,82,84, 93,107-8, Ill, 133, 136, 142-8, 157, 159, 161-4,175,177,182,192 Czechoslovakia,see Czech Republic and Slovak Republic Democraticcommunity 9, 19-54 Democratisation ll, 96, 102, 198 Denmark 69,72, 142, 153,207-13,217 Diversity 1-18,77,88,95,97,101-3, ll7-18, 125, 127, 152, 168-9, 194, 199 EBRD (EuropeanBank for Reconstruction and Development) 138-40, 142-3 Economicand MonetaryUnion (EMU) 135, 139-49, 153, 164, 168 EconomicLiberalisation 124, 128-31, 156-7,163,170,200 Elections 63,77,81-7,89,94,105,108, ll3, 207-13,215,220 Enlargement 1-18,19-54,100,117,141-51, 152-3, 168, 170, 178 Environmentalissues 8,200,215,219,221 Estonia 38, 133, 142, 148, 158 Ethnic minorities 185 EU membership 57, 65, 102, 107, 117, 146, 148,214-24 EU referendum 214-24 Europeanidentity 4, 20, 52 Europeanintegration 1-18,20,55-80,111, 124, 176 Europeanisation,seeEuropeanintegration Exports 4, 124, 145, 147, 151, 199

214 FederalRepublic of Yugoslavia(FRY) 84, 87,95,110 Finland 39-40, 69 Foreigndirect investment(FDI) 136 France 27,58,67-70,70-75 Free movementof capital, goods,labour and services 168 Fuchs,Dieter 8-9, 19-52 FYROM, seeRepublic of Macedonia 167

THE ENLARGED EUROPEAN UNION

Parliaments,seelegislatures PHARE programme 139 Poland 7, 14, 58-62, 67-74, 82, 84, 91-3, 97,105,110,113-15,133,136,142-5,148, 152, 155-8, 160-62,167, 171,181-83,186, 192,198,200 Political protest 212 Populism 89, 92, 99 Portugal 3,7, 12, 18,70, 103, 126, 138, 143-5,148,151,175 Germany 18,27,35-40,43,47-8,51,60-63, Prime ministers 82, 105-7, 193,207,210, 67, 69, 74, 79, 85, 96, 102, 107, 152, 155, 212,215-18 159, 163, 171, 177 Privatisation 96,98, 124-30, 146, 156-7, Globalisation 2, 14, 18,75,81,83 163, 166, 170, 178-85, 190, 194-5, Greece 3,7,18,69,73,95,103,143-5,175 199-200 Gros, Daniel 8-13, 139-49 Public administration 109, 195 Putin, V. 94 GrossDomesticProduct(GDP) 7-12,28-9, 127-8, 136, 143, 151 Religious issues 55-80, 95 Haughton,Tim 10-11,99-118 Roma (Gypsies) 84 Humanrights 82-3, 102, 104, 115, 104, 106, Romania 7-10,47,59,70,81-99, Hungary 8, 14,40-47,61-3,67-74,82,84, 110, 115-16, 133, 143-5, 150, 158, 162, 89-93, 108, 113, 133, 139, 142-5, 157-62, 179 167,171,175-7,181-2,191-2,198,200 Roundtable 28, 103, 105 Russia,relationshipwith 9-10,39-40, Iliescu, I. 59,81,85,91,98 47-52,79,83,91-8,146,158,160-62,171 Ireland 12, 60-63, 69, 72, 77, 135, 142, 153 Italy 60,62, 67-74, 79, 85-9, 135, 143-5, Schengenrules 3-4, 200 152 Securityissues 8, 14, 89, 95, 99 Serbia,seeFederalRepublic of Yugoslavia Servicesector 183, 185, 190, 196 Klingemann,Hans-Dieter 8-9, 19-52 Kovac, M. 105-6 Slovak Republic,seeSlovakia Slovakia 40,61,63,67,70-74,82,89,91, Kovacs,JanosMatyas 13-14, 173-204 105, 109, 114, 133, 143, 162 Slovenia 8-12,38,47,61-2,82,110-12, Laitin, David 9,53-78 Languageissues 9, 55-80 133, 142, 152, 161-2, 170 Latvia 38, 61, 67, 69, 72-4, 84, 98, 133, Snegur,M. 91 143-5, 165, 167 Social security 59, 152-74, 184-5, 195-7 Legislatures 105-6, 109-112,118, 132 Solidarity 14, 114, 198 Liberalism 10,89,92,96-99 South-EasternEurope,seeBalkans Lithuania 38,84, 112-13, 133, 143 Spain 3, 7, 9, 18, 39-49, 58-62, 67-74, 79, Luxembourggroup 142-4 103, 107, 144-5, 152 Statesubsidies 7, 155-7, 161, 183, 190-94 Mair, Peter 1-18 Structuralfunds 122, 139 Malova, Darina 10-11,99-118 Subsidiarity 3, 6, 17, 159 Meciar, V. 91, 105, 107 Sweden 9, 35, 43, 49, 60, 70-72, 155, 159, Milosevic, S. 82, 84, 91 171,179 Nationalism 81-100 NATO membership 84 Tariffs 151 Netherlands 60-63,67-74,142,155,179 Taxation 161-8, 183, 185, 189-90, 192 Nice Treaty 118 Tismaneanu,Vladimir 9-10, 79-98 Non-governmentalorganisations(NGOs) Trade 124, 127-9, 142, 146-9 109, 186, 195 TradeUnions 7, 14, 135, 155, 169 Norway 48-9,214-24 Unemployment 13, 156-7, 160-62, 171, Orban,V. 92 183,185-91,197,200

215

INDEX Visa-freeregime, seeSchengenrules Wagener,Hans-Jiirgen 4, 13-15, 150-72 Walesa,L. 105 Welfare state 13-14,25,32,43,47,54, 122, 147-204

Westerncountries 47, 124, 168 World Bank 129-31,138-9,163-5,171-3 Zielonka, Jan 1-18 Zyuganov,G. 91