Out of the Red : Building Capitalism and Democracy in Postcommunist Europe |  | Author: Mitchell Alexander Orenstein
Publisher: University of Michigan Press
Category: Book
Buy New: $75.79
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Avg. Customer Rating:  4 reviews
Sales Rank: 3526952
Media: Hardcover
Number Of Items: 1
Pages: 184
Shipping Weight (lbs): 0.9
Dimensions (in): 8.8 x 5.9 x 0.9
ISBN: 0472097466
Dewey Decimal Number: 338.947
EAN: 9780472097463
ASIN: 0472097466
Publication Date: August 3, 2001
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Product Description
After the fall of the Berlin Wall, the countries of East-Central Europe embarked on a journey to transform themselves into democratic capitalist societies. Their governments searched for strategies that would allow them to pursue radical market reforms within the context of nascent democratic politics. Poland adopted a neoliberal strategy that attempted to push through as much reform as possible before an antireform backlash could occur. In the Czech Republic, a social liberal strategy for transformation attempted to combine neoliberal macro-economic policies with social democratic measures designed to avert such a backlash.
A detailed analysis of Poland and the Czech Republic suggests that alternation between strategies has been the secret to the success of East-Central European countries.
This comparative case analysis identifies the significance of reform mistakes during transition and the corrective benefits of policy alternation, its claims illustrated with an in-depth study of privatization policy in the two countries.
Mitchell A. Orenstein delves into the historic struggle to build capitalism and democracy during a decade of post- communist transition in East-Central Europe and develops a model that explains why democratic policy alternation may accelerate policy learning under conditions of uncertainty and constraint.
Out of the Red is accessible to a general audience and as such is suitable for both graduate and undergraduate courses on political economy. It will be of particular interest to economists, political scientists, sociologists, students of postcommunism, and anyone interested in the relations between capitalism and democracy in the contemporary world.
Mitchell A. Orenstein is Assistant Professor of Political Science, Syracuse University.
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| Customer Reviews:
 Important critique on neoliberalism and democracy November 27, 2001
3 out of 4 found this review helpful
Orenstein's book provides a compelling critique of neoliberal strategies implemented in Poland and the Czech Republic emphasizing the underappreciated role of democratic change in policy reform. He clearly outlines his arguments for what he calls "policy alternation" providing substantial evidence of 1) its existence and 2) its effect on policy. As a student of East European studies I found the book to be extremely useful in painting a clear picture of the policymaking process in these two post-communist countries and in filling in many gaps in the relevant literature. The book is very approachable and I highly recommend it to those interested in post-communist democracies - scholars and casual observers alike.
Clear, comprehensive, and compelling November 21, 2001
2 out of 3 found this review helpful
The reviewer from New Brunswick, NJ is totally off base and shows remarkably little sign of actually having read the book. Out of the Red is not about "a bad neoliberal Poland and a good social democratic Czech Rep." Instead, the book argues that democratic policy alternation since 1989 has led to better economic performance in both countries, and that Poland has benefited more than the Czech Republic from policy learning as a result of more policy alternations in recent years. Moreover, democratic policy alternations have had such positive effects because the two countries share a common goal - membership of the European Union. Out of the Red offers a subtle and nuanced argument, with rich descriptions, and does not characterize either country as good or bad. In addition, the book is exceptionally well-written and provides a clear and comprehensive analysis of what has happened in these transition countries over the past ten years. It's a must read for anyone interested in the contemporary politics of economic reform.
 Missed the point November 16, 2001
2 out of 9 found this review helpful
The book is a story of a bad neoliberal Poland and a good social democratic Czech Rep. During the transition. Author begins with the claim that the success of reforms depends on policies and not initial conditions. A poor comparative frame to prove this: Poland's initial conditions were much worse than those in Czech republic indeed. Take foreign debt and hyperinflation for example. The most important, what the author portrays as a social liberal approach in Czech Republic turned out to be a combination of short-term policies to avoid unpopular policies that caused a major economic downturn in Czech Rep. since 1996. Indeed, it was the first country in the region to go into the second post-transition recession! The author's scheme does not explain some obvious facts:
1) Poland experienced the lowest GDP decline and enjoyed the fastest and the most robust recovery in the whole post-Communist world.
2) The amount of social spending to GDP actually grew in Poland during first years of transition.
3) Czech privatization scheme turn out to be a disaster in terms of investment and corporate governance: the companies replaced FDI with acummulation of debts from the banks inside and outside the country, which put a pressure on Czech currency and caused its collapse in 1997.The lack of clear owners did not allow to turn around companies and profitability slipped - so did the employment (so much for socially-oriented policies).
4) "Social liberalism" in Czech Republic was financed from abroad and brought forward acummulation of foreign debt per capita much higher than it is now in Poland: in the beginning of transformation Czech was virtually debt-free.
5) After Czech government was no longer able to purchase social stability on credit card, unemployment soared.
6) Czech privatization worked the way to make the banking sector responsible for the liabilities of the rockbottom companies (Many banks controlled investment funds that acummulated vouchers). As a result, savings were hurt.
7) After bad liberals were removed in Poland, social democrats continued their policy course: for what reason?
8) The much-trumpeted "Strategy for Poland" of Kolodko, mentioned by Orenstein, proved to be a cosmetic alteration of the neoliberal policies. BTW, today it is the left again that imposes fiscal discipline in Poland. Overall, the book gives an inadequate picture on what happened in the region during transition. It is, however, a good record of the basic misconceptions in the debate about transformation and neoliberalism in general. I would still recommend to read it because of this.
A well written book on eastern Europe and democracy October 1, 2001
2 out of 3 found this review helpful
I bought _Out of the Red_ because I have a general interest in the relation between capitalism and democracy and in eastern Europe. It turned out to be one of the most interesting and enjoyable books I've read in a long time. First, the writing is terrific: it's not only clear and straightforward, but also really punchy, with a marvelous sense of irony. I'm sure it would be more than appropriate for undergraduate readers in terms of its style and approach. Second, the thesis really shed new light for me on the different strategies countries in eastern Europe have taken in their transition to capitalism and democracy, specifically Poland and the Czech Republic. The basic idea, as I see it (though I'm not expert in the field), starts with the assertion that Poland and the Czech Republic took contrasting approaches to their political and economic transitions, especially in the area of privitization policy, on which the author focuses a whole chapter. Where Poland followed a "shock therapy" route, the Czech Republic provided more of a social safety net to maintain popular support for "neoliberal" reform policies (the author calls this a "social liberal" route to reform). Here's where it gets interesting. The author suggests that the Polish reformers in instituting shock therapy under conditions of political democracy were able to learn from their mistakes when the social difficulties their policies produced brought their political opponents to power (a rise that, later, produced a pendulum swing in the opposite direction, once again toward shock therapy). In the Czech Republic, in contrast, the political stability created when the government instituted both neoliberal and "cohesion-oriented" policies at the same time actually extended the life of bad policies. The author calls the process by which, under conditions of democracy, eastern European policy reformers have learned from their mistakes, with the pendulum of reform swinging from "neoliberal" to "social liberal" policies and back again, "democratic policy alternation." "Eastern Central European countries that have succeeded in the transformation to capitalism and democracy," the author writes, "have done so not by sticking to a single strategy of reform, but rather by vigorous policy alternation and learning." This was really fascinating to me, and it seems to have implications far beyond its immediate subject, in political science, economics, policy, law, and even "information science" and "knowledge work." A terrific read and a very interesting book!
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