...circumstances. Ferguson

An Essay the History of Civil Society, 1767

Usually we know what we want. Often we think that we also know how to get it. However, sometimes, despite our belief, we fail. This phenomenon occurs too in the field of international relations, as can be seen if we look at the West's relations with Eastern Europe since the collapse of communism.

Nowadays nobody seriously argues that foreign assistance is irrelevant in respect of the systemic change through which Eastern Europe has been going since the downfall of communism. Yet, the Western world's attitudes and policies towards fundamental political and economic change in the region leave much to be desired. Western politicians appear to believe that mixture of economic assistance and verbal encouragement for transformation are sufficient to guarantee the successful change of communist regimes into liberal democracies based on a market economy.

The assumption is difficult to understand. Consider the fact that economic assistance for the Third World states since the 1950s has produced, thus far, poor results, and consider also that there is much evidence that the transformation of a Third World state into a Western-type regime seems to be much easier to accomplish than the transition from communism to a liberal democracy. Third World economies are, to a considerable extent, market economies based on private ownership. Yet, there has so far been little success in bringing about their transformation into modern, Western-styled economies with high living standards and a comfortable degree of welfarism.

Why then should the East European states be more successful with their systemic change than most countries in Latin America, Asia and Africa? Why are many commentators in the West optimistic when they talk about transformation in Eastern Europe, and pessimistic about the future of the Third World? Today this optimism seems to some East European observers to be sadly misplaced.

To illustrate: The Economist magazine argues, that because "During the communist years, small groups of economists throughout Eastern Europe had always quietly studied Western economics under their desks," (1) hence the success in transforming the command economy into a market one is almost certain. It assumes that theoretical know-how possessed by a few persons is almost sufficient to cope with the fundamental metamorphosis. If this were the case, by now the Third World would already have ceased to exist. Experience of a market economy, as opposed to theoretical familiarity with the concept, is not even mentioned as a factor in connection with systemic change. Furthermore, political will and the ability to achieve the desired goals are not even discussed.

It is often pointed out that to function efficiently, a modern market economy relies on institutions and rules established over literally centuries; property and contract laws and the courts to enforce them; accounting and bankruptcy rules; tax codes; pension and unemployment systems; labour laws; and the supervision of banks and financial markets. Until recently, none of these has been present in Eastern Europe let alone modern communication and transport systems, which are simply still non-existent to a large degree.

In addition, the game rules of the contemporary Western business community, domestic and international, are almost completely unknown to Eastern European politicians and their constituents alike. It is not a case that these principles were forgotten or abolished after the imposition of communism but, with only slight exaggeration, they never existed there, with the exception of the Czech lands. In other words, when the feudal system was gradually transformed into a liberal democracy and market economy in the West, a similar process did not occur in Eastern Europe. Hence, there is little there of relevance that can be drawn on.

The lack of previous experience of a market economy and liberal democracy are the most serious obstacles to successful systemic change in Eastern Europe for the foreseeable future. This factor, however, appears to be only vaguely perceived in the West. On the contrary, it is thought that to introduce a certain number of Western institutions, technologies and capital into Eastern Europe would be sufficient to guarantee success. However, the Third World practice demonstrates clearly that this step more often than not creates but a facade, behind which there is still a great deal of poverty and very little real democracy.

By now we know that technology is not culturally indifferent; that in terms of quality two products manufactured according to the same technology, say in Germany and Russia, would be most unlikely to be of the same standard. And we know, well in advance, which of the two would be of lower quality and for what reasons.

Many people in the West seem to believe that poor people are poor only because of entrenched poverty from which there appears to be no escape, and that relief may come only from the outside, in the form of Western capital. To put it differently, what all Eastern Europe lacks is capital to deal with the transition to a market economy and welfare state. The corollary is that credits, loans and subsidies ought to be extended to Eastern Europe and this would be sufficient to guarantee success. What should be borne in mind rather are the enormous debts owed by Third World and the former communist states to the West to see that borrowed capital can be, and often is, squandered. Why should it be different now?

The answer supplied by the advocates of capital assistance is that occasionally in the past this type of aid did work, and they cite the examples of the United States assistance to Western Europe and Japan in their efforts to rebuild their war-destroyed economies through large capital loans and credits. Although these are valid examples they cannot automatically be assumed to apply to Eastern Europe. As far as Western Europe is concerned, economic assistance was extended to countries which previously operated as modern market economies; the task was aimed at rebuilding them. In the case of Eastern Europe today, after the fall of communism, the situation is different altogether. The task envisaged is--the Czech Republic aside--not to rebuild the destroyed capitalism, market economy and liberal democracy but to establish them firmly for the first time, nearly from scratch. It is the argument of this article that the West's assistance to Eastern Europe since 1989 is not as effective as it could have been if it had known what the postcommunist states needed most to attain these goals.

When discussing Western aid to Eastern Europe today often a question arises in the mind as to why one should bother about these countries at all? On what grounds should Western taxpayers support financially, at their own expense, systemic change abroad which, plausibly, should not be their concern? Is it a duty of the West to come to the rescue of the East? If it is not, then, for what reasons ought it, nevertheless, be done: political, military, economic, moral or, perhaps, a combination of some or all of them?

Furthermore, is it indeed in the interests of the West to see a liberal democracy and market economy flourishing in Eastern Europe? And if not, should the help to the region be extended anyway because charity is a good cause in itself, nobody disputes that. Opponents of aid being given to Eastern Europe contend, however, that charity begins at home; therefore, it should be earmarked for the unemployed individuals or for job creation in one's own country, for instance, rather than transferred abroad.

With the collapse of communism, the downfall of the Soviet empire and the break-up of the Soviet Union itself, the danger of another world war has disappeared. According to this view, the Soviet military threat to the West does not exist any more. Presently, unlike before, Moscow is mainly preoccupied with its own domestic problems; its current efforts are concentrated not on external but internal matters. Russia, the successor state of the Soviet Union, nowadays is economically in crisis and militarily severely weakened. Evidence of the latter being its troops' miserable...

NOTE: All illustrations and photos have been removed from this article.



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