Prague Economic Papers 2000, 9(2) | DOI: 10.18267/j.pep.73

Post-privatization corporate governance in eastern europe (the case of the czech republic)

Mária Havrilová

After the collapse of communism, it was acknowledged that mass privatization was a priority for Eastern Europe. This paper examines why it was necessary to accelerate the process, and the various methods that were used. It focuses on the Czech system of voucher-based privatization. In the Czech experiment in transferring ownership rights is discussed a number of issues in relation to the post-privatization corporate governance. It is imperative that privatization is not perceived as an instant conversion from central planning to an idealistic model of a market economy. On the contrary, it is just the beginning of a long term, evolutionary process of institution building. Policy-makers need to realize that transition towards effective systems of governance may be jeopardized if left to market forces alone. Instead, it must be accompanied by robust regulatory measures, such as legal framework and capital and product markets.

Keywords: Eastern Europe, Czech Republic, voucher-based privatization, distribution, shareholders, cross-ownership, investment funds, banks, market forces, robust regulatory measures

Published: January 1, 2000  Show citation