ABSTRACT
This chapter discusses the rise of corporate governance regulation as part of the establishment of capitalism in East Central Europe (ECE) after 1989.1 In the context of the discussion on the economic transformation from a centrally planned to a market economy in this region, most of the existing literature looks at corporate governance regulation from an economic point of view. During the fi rst years of the economic transformation in the former socialist states issues of corporate governance in a narrow sense received rather limited attention. Most emphasis was placed on price liberalization, on the opening of markets to foreign capital and on the establishment of private property, that is, privatization. From the mid-1990s onwards the institutional foundations necessary to make this process successful received increasing attention. This is partly because the unregulated emergence of capitalism caused a host of problems. An effi cient allocation of resources was deemed feasible only with the ‘right’ regulation underpinning it. The dominant literature on the subject sees corporate governance regulation as a ‘technical’ solution to a ‘technical’ problem, and largely ignores the political dimensions (see for instance Estrin et al. 2001: 1; but also Boycko et al. 1996). It predominantly looks at the transformation process as a process of modernization, ignoring the fact that transformation entails a political struggle between various social forces (Shields 2004).
