ABSTRACT
This chapter examines corporate governance in two transitional economies: Russia and Czechoslovakia and refers to transformation from a planned economy to a market economy. Looking back the development of the securities markets in the Czech Republic and Slovakia, one can conclude that the capital markets in both countries are still volatile, non-transparent, and lacking liquidity. Russia and Czechoslovakia, like China, adopted the planned economy before the 1950s and launched economic reforms after the 1970s with enormous energy and determination. The modern Russian market economy started its economic reforms in the 1990s. Privatization was believed to be the essential step of transition from a planned economy to a market economy. The MMM event was one of the most notorious fraudulent cases that severely upset the Russian capital market. Since 1989, the Czechoslovakian government initiated privatization through three programs: restitution, small-scale privatization, and large-scale privatization. Investment Privatization Funds (IPFs) were created to facilitate the voucher privatization.
