Theory and Experience in the Light of Post-Socialist
Transformation
In Eastern Europe and the Former Soviet Union the transition away from a planned economy and an authoritarian state has been in progress for over ten years. Tremendous changes in the operation of the economy and the organization of the state have occurred. Yet deep problems remain. Increasingly, a split is developing between countries that are candidates for early European Union membership and other countries farther to the east. This division shows up in measures of poverty and economic growth, but it also is visible in measures of democracy, bureaucratic functioning, the rule of law, corruption, and the operation of markets. Even the most advanced countries in Eastern Europe, however, suffer from problems of political legitimacy and institutional quality. One symptom of this is low levels of honesty and trust. High levels of distrust, dishonesty and corruption affect both private relations between individuals and businesses, and relations between citizens and state officials. The project analyzes these problems and suggests solutions, recognizing that many of these issues are not unique to the transitional economies but affect all societies to varying degrees.
The Collegium brought together an interdisciplinary group to study these issues. The project included a core group of scholars who spent all or part of the fall of 2002 in residence at the Collegium and a larger group of associated scholars who participated in conferences and the preparation of papers. The goal was both to encourage new research and to develop a network of scholars with complementary interests. An innovative feature of the project is the conjunction of people working on trust as it develops in informal interactions and those concerned with the institutional bases of dishonesty and corruption. The former group of scholars has concentrated on the evolution of behavior using models that derive from game theory or evolutionary biology. The latter group studies the way institutions influence behavior drawing on work in the political-economy of regulation and government behavior. These two bodies of work have much to teach each other especially in the context of Eastern Europe where the relationships between public attitudes and political and economic institutions need to be better understood.
Countries
in a transition from socialism face particular problems in developing habits of
trust and honesty. Under the previous system, government institutions had
become discredited in the popular understanding. Lying was acceptable and even
praiseworthy in the face of illegitimate power. Trusting relationships extended
little beyond one’s close family and friends. The transition to the free market
and democracy increased the opportunities for private gain, but the law lagged
behind, and the transition failed to establish many of the informal habits and
practices that supplement the law in developed countries. Many close observers
of the transition process now recognize that the rush to privatize and open the
market underestimated the importance of establishing legal structures for the
development of a modern economy. Democratic constitutions have been established
almost everywhere, but other aspects of law reform have been less prominent.
The
project overlaps with the current debate over “civil society” and earlier work
on the role of the nonprofit sector. The institutional challenge involves not
just the reform of public bodies and the development of the for-profit sector
but also the creation of voluntary associations and nonprofit organizations.
Some claim that societies with a rich variety of voluntary associations
encourage civic engagement. Others focus on citizen associations with a clear
political or policy agenda that operate outside of the political party
framework. In the Eastern European context one thinks of environmental, human
rights, and anti-corruption groups. Thus one can ask how the development of
such organization is facilitated by the societal level of trust and whether
they can, in turn, help produce higher levels of cooperative activity.
In the study of transition economies one needs to distinguish between true transitional phenomena that can be expected to disappear as the new states become more established and deeper structural problems that will not necessarily evolve in a favorable direction but that need self-conscious exercises of political will. Some of the difficulties faced by the current regimes are not just temporary growing pains but represent more fundamental problems. One important research task is to determine whether public attitudes are a reflection of underlying problems or are simply a holdover from the past. Furthermore, reforms need to focus on ways to economize on trust and to overcome narrow groupings based on trusting, personal connections that control key areas of economic and social life. In other words, one needs to distinguish between trust in individuals who will favor you personally and trust in institutions that operate with fairness and openness.
This
is a broad research agenda, and the project cannot cover all these issues with
equal facility. Nevertheless, we have begun with a comprehensive view of the
issue at the intersection between theory, empirical work, and policy. The
ultimate outcome depends upon the talents and interests of the scholars we have
managed to attract to the project and to the Collegium.
The
details of the particular research projects depended upon the participants’ own
interests and on the issues identified in the preliminary workshop. The goal
was to bring to together scholars in economics, political science, psychology,
sociology, law, and philosophy. Many of the participants had already been engaged
in interdisciplinary work and were used to talking across interdisciplinary
boundaries. Some people are experts on the region, and others have thought
about how to create an environment in which trust and honesty can flourish.
Professors Kornai and Rose-Ackerman, in consultation with others, had
identified a strong list of potential participants from both inside and outside
the region, but the final shape of the project depended upon both the level of
funding and the interests of potential participants.
May 25–26, 2001:
Planning workshop in Budapest. The workshop discusses a background paper by
Rose-Ackerman on the state of the art and Kornai's observations on the central
theme of the Collegium project. Previous work by participants is also circulated.
The goal of the workshop is to think through the most interesting and pressing
research and policy issues and to determine a preliminary assignment of topics
for the focus group itself and for the conference volume.
Summer 2001–Summer 2002: Participants engage in background research and writing. Possible
interim workshop in the United States or in Europe. Possible contract with a
survey or data gathering firm to produce information on public attitudes and
behavior in the region.
Fall
2002: Internal participants (the “focus group” as is called in the Collegium) in residence in Budapest with intensive
collaborative work, seminars, etc.
October, November and December 2002: Conferences to discuss the papers prepared for the project.
Winter
and Spring 2003: Preparation
of book manuscript for publication.
After 2003: Although
the present phase of the project will come to an end by publishing the book, it
is our intention to continue the research. We are confident that the
interaction starting in the framework of our project will not terminate after
2003.