Privatization in Central and Eastern Europe: Perspectives and Approaches

By Demetrius S. Iatridis; June Gary Hopps | Go to book overview

Chapter 13 State and Market in Romanian Social Policy

LIVIA POPESCU

The developments in Eastern Europe, particularly in Romania, after World War II illustrate the results of the suppression of market relations and the exacerbation of the state regulatory role. In 1948, private property was eliminated except for some marginal landownership. Legislation that drastically limited inheritance rights and allowed each individual to own only one property and the lack of constitutional guarantees regarding private ownership are some examples of Communist policy in this respect. Consequently, state ownership constituted the single or, in some limited domains, the prevalent type of ownership in a highly centralized and politically controlled economy. The substitution of individual autonomy by a collective entity (the proletariat or the Communist Party), along with other economic and political decisions, was aimed at preventing the emancipation of the individual from the state. As a total state, the Communist state absorbed the civil society ( Bobbio, 1989).


MARKETIZATION AND PRIVATIZATION

The collapse of communism in Eastern Europe created the preconditions for the transition from a command economy and bureaucratic state collectivism to democratic capitalism ( Deacon, 1993). Political freedom is now a feature of Eastern European countries. The lag in marketization and privatization, relative to political rights, is not only normal but seems to be acceptable to a number of scholars (see, for example, Rose, 1993). However, such acceptance should not be absolute. The process of developing market mechanisms and creating a significant private sector cannot be disassociated from the democratic regime- building process. True democracy would be jeopardized.

From 1991 to 1994, the pace of marketization and privatization was slow in

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