Corporate Governance and Finance in Poland and Russia by Tomasz Mickiewicz (review)

Abstract

REVIEWS 187 Thirdly, and I believe most disappointingly, the issue of fiscal reform is never appropriately separated from the post-Communist transformation process itself. Needless to say thiswould be a major challenge but one worth even partial success. The three case studies themselves highlight the significant differences in economic and political circumstances between the three coun tries at the time of political change and fiscal reform.Yet attempts are made to provide generalized conclusions about fiscal reform in Central-Eastern Europe. This is a pity as itdemeans the helpful and readable analyses of the fiscal changes drawn out in each of the individual case-study chapters. By the timewe reach the concluding chapter the author himself seems to have accepted thathis analyses of the fiscalchanges in the case-study countries are from a historical, political economy perspective. There is no attempt to draw from the experiences of these three countries any lessons for PEPR methodology or forprevious PEPR conclusions. As such thisbook reads as a very dated, Western-based perspective on the excitement of the early 1990s in Central and Eastern Europe. As the author admits, 'fiscal reform was not driven primarily by fiscal problems but was essentially a by-product of the transition to capitalism' (p. 160).The book would have been somuch more valuable if this had been the opening sentence and the author had analysed his interesting case-study material in this light. London Neil Garrod Mickiewicz, Tomasz (ed.). CorporateGovernanceandFinance inPoland andRussia. Studies in Economic Transition. Palgrave Macmillan, Basingstoke and New York, 2006. xviii + 328 pp. Notes. Tables. Figures. Bibliography. Index. ?65.00. Containing conference papers and commissioned studies on the role of finance in corporate governance, the book isanother inPalgrave Macmillan's series on the economics of the transition of former Soviet-type economies from central planning and administration to various incarnations of the free market. For various reasons, itsfocus goes beyond the influence offinancial institutions and arrangements, which turn out to be rather less powerful on corporate governance than originally hypothesized. Although nominally just about Poland and Russia, other Central and East European (CEE) countries are also widely discussed by the contributors, most notably the Czech Republic and Hungary which, along with Poland, are conventionally rated as the stars of the transformation process. The contributors provide many insights into the successes and shortcom ings of the various approaches and tempos applied to transforming theCEE and Russian economies. Surprisingly, theymention only inpassing the crucial political background to the policy choices and modes of transition adopted. Nor do theydiscuss in any depth the cultural proclivities which predispose, at least inpart, the respective societies to the kinds of capitalism that seem to be emerging in the post-Soviet space. That isnot theirpurpose, of course, but it l88 SEER, 87, I, JANUARY 200g leaves themoderately informed reader with a feeling of incompleteness of the analysis. It could have contributed to a deeper understanding of the suc cesses and failures of the initial attempts to impose the so-called 'Washington Consensus' as the preferred mode ofmarketization. Some of the authors, for example, Tomasz Mickiewicz, in his excellent overview of the transformation and its impact on corporate governance (CG), seek to apply contemporary managerial concepts, such as the principal-agent model, to the performance of the transitional systems.Others who do sowith varying degrees of success include Wladimir Andreff, on a general model of CG in the CEE region, Yuko Adachi on the YUKOS case in Russia, and Maria Aluchna on ownership concentration effects on CG in Poland. They all find that thismodel fails to account for the complexity and multi directional effectsof the real-world relationship between finance and control of management. That finding seems to apply throughout the region and especially in Russia, where the scale and tempo of transformation have frustratedmany attempts at theoretical modelling byWestern economists. A number of the contributors employ econometric analysis, correlations and regressions to pinpoint the scale and directionality of financial effectson CG. As is often the case, unfortunately, the data sets employed are rather dated and cannot really apply towhat is almost by definition a highly fluid situation throughout the region. For example, the development of 'capital groups' in Poland more or...