ABSTRACT
At root, the transformation from socialist central planning to a market economy entails a radical adjustment in order to create a ‘new balance of power between the state and civic society, in favour of the latter’ (Havas, 1996). In this light, privatization is arguably the most important, and probably the most complex element of the transformation process. This is because privatization, broadly defined as the transfer of state-owned assets to private ownership, alongside the creation and fostering of de novo private businesses, is about the (re)distribution of property (wealth) and the means of generating wealth. Hence, ultimately, it is about the longer-term distribution of economic and political power. Decisions related to privatization impinge on almost every aspect of the transformation process. They profoundly affect the future shape of the country’s economy and its performance both on the domestic and international markets. In the CEE context, privatization involves a huge upheaval at every level of society: changes in regional patterns of economic activity, in the labour market, and, at the same time as a new class of entrepreneurs, property owners and shareholders emerges, some social groups will almost inevitably find themselves excluded or marginalized. Policy misjudgements or mismanagement could have grave consequences for social cohesion, threaten the consensus for reform as a whole and seriously undermine the country’s political stability. Privatization thus brings a myriad of interest groups to the fore and into confrontation with each other.
