A New Capitalist Order: Privatization and Ideology in Russia and Eastern Europe by Hilary s> Appel (review)

Abstract

REVIEWS I9I since this provision would weaken their grip on power' (pp. I75-76). Uzbekistan: 'the Uzbek record so far bears out the favourable view of the "evolutionary-institutional" model, rather than the neo-liberal one, at least in Central and East Asian circumstances' (p. I96). Tajikistan: 'inadequate economic growth in Tajikistanis to a great extent related to the insufficient development of marketinstitutions'(p. 214). Kyrgyzstan:'there is a quite considerablespecificityof the situationin Kyrgyzstan i.. .1') the small size of the countryand its unfavourablegeographiclocation, 2) the lack of rich and easily tradablenaturalresources,3) the strongdependence on external aid' (p. 246). Finally, Kazakhstan: 'transitionhas eliminated much of the industrial base and left the Kazakhstaneconomy dependent upon raw materials- especially oil and gas' but 'the sheer size of the country'sproven reserves [...] means that it is not necessarily undesirable to remain primarily oil-dependent for some time to come' (p. 267). What about the future? Some of the ten are already into institutional reform; some see hope in it. Some describe their symptoms; some despair. One has adequate energy. But an outcome Ofer and Pomfret suggest is that 'those among the CIS states that will meet the institutionalchallenge more readilywill find higher and more sustainablegrowth, and the global economy will move in to magnify the results by providing capital and know-how' (p. 274). Glasgow W. V. WALLACE Appel, Hilary. A New CapitalistOrder: Privatization and Ideologv in Russiaand EasternEurope.Pitt Series in Russian and East European Studies. Universityof PittsburghPress,Pittsburgh,PA, 2004. Viii + 248 pp. Notes. Bibliography.Index. $27.95 (paperback). THE collapse of the state socialist societies was greeted in the West and in the countries themselveswith euphoria and expectations of a movement to a capitalistsociety and its associatedforms of democracy and civil society. The outcomes have disappointed, and the unmet expectations of wealth creation and civil participationhave led to frustrationand, in many cases, to nostalgia for the Communistpast. There is no area more controversialthan the topic of the privatizationof state assets. The process has been beset with corruption and collusion and has led to material deprivation. Some, followingJoseph Stiglitz, have emphasized the determiningrole of neo-liberalideology, driven by international institutions. Hilary Appel, however, emphasizes the importance of the ways that ideology shaped the preferences of local actors. Her empirical focus is on the Czech Republic and the Russian Federation and she deals with the policies, contexts and outcomes of privatization.She also makes comparisonswith Slovakiaand Poland. The book provides a valuable contributionto our knowledge of the privatizationprocess in these countries. Appel's expressedobjectiveis not to explain why a policy to privatizeassets was adopted, but with the choices of howto privatize. Her contention is that ideological factors'drovethe privatisationprocess'(p. 7)by shapingindividual I92 SEER, 85, I, 2007 and group action. She contends that first, the ideological beliefs of policy makersshape the design of their initialproposed reforms.Second, that beliefs of actors in society shape the definition of interests in society. Third, that values of policy makersinfluence implementation,through the ways in which they attempt to secure compliance. Finally, she considersthat the compatibility between the ideological foundationsof elite policy makersand those of the masses affect the implementation of policy. In the Czech Republic, the privatizingelites around Vaclav Klaus articulated positive virtues of privateproperty.A privatepropertyregime would, it was contended, returnthe Czechs to theirdesiredstateof well being nearer to prosperousWestern Europe of which they had previouslybeen a part, and furtherfrom Communism, which had been imposed. Workersand managers, being closer to the Communistswhen in power, were then in a weak position to claim special treatment with respect to the division of property, and a general public privatization based on vouchers had more popular support. In the Russian case, however, there was no comparable Western European society to return to (there was no call from the European Union), and Communism was a part of Russian political culture, rather than being a foreign import. Moreover, rights to private property had no generalized public support.Anatoly Chubais and other privatizerslegitimatedthe transfer of state assets to the public domain by appealing to materialist sentiment: possession of personal assets, it was proclaimed, would make everybody richer. For the privatizationpolicy makers this was a rational approach and did not need...