European spirit, adaption to market economy and national identity in Poland and Ukraine
National culture and its influence on the European Integration, advertising and entrepreneurship
©2008
Masterarbeit
284 Seiten
Zusammenfassung
Inhaltsangabe:Abstract:
The major objective of this work is besides economic considerations to estimate how far Poland and Ukraine have grown on the social and cultural EI path layer of inter-country convergence which is assumedly even more difficult to achieve than consensus in an economic and political state union - what are the causes of the present state of evolution and what inferences for future transformations steps can be deducted thereof.
In terms of more specific terms of reference, so-to-speak research question antedating each chapter of the corpus, the author posed the following hypothesis:
In the section about national identities, the embracing question is the following, since it is suspected that the course of history of both nations observed moulded the tangible layers of NC and thus indirectly the development of mental EU convergence:
Hypothesis 1: Design and intensity of national identity contribute to Polish and Ukrainian aggregated opinion about their home countries` role on the European theatre and general emotions about the contact to Europe
In order to be able to proceed solidly on the territory of BHN, the frame of research is meant to be solidified by retrieving answers to whether the very existence of needs varies across nations or merely their degree of intensity by claiming the following fact:
Hypothesis 2: The scan of advertising in Poland (Pl) and Ukraine (Uk) reveals types of human needs which are not part in commonly cited BHN theories; in other words: human needs are culture-specific instead of universal.
The structure and intensity of BHN like in the case of other features alongside the N-B-V-A (Needs-Beliefs-Values-Attitudes) axis are a fairly difficult entity to seize; what may be observed and thus measured at utmost is when the bearer satisfies a need by an overt action, e.g. when he buys soap to satisfy his needs of body spruceness. However, purchase decisions are decided by so many factors, e.g. branding, packaging, CRM (Customer Relations Management) etc. that it seems more rewarding to observe what conditions of internal tension are activated by advertising as intermediate entity and possible incentive of acquiring the item promoted.
Hypothesis 3: Advertising of fast-moving resp. durable consumer goods delivers indications on single elements of Poles` and Ukrainians` human need structure
Experts of transformations studies commonly consider a brisk small-business sector and salubrious […]
The major objective of this work is besides economic considerations to estimate how far Poland and Ukraine have grown on the social and cultural EI path layer of inter-country convergence which is assumedly even more difficult to achieve than consensus in an economic and political state union - what are the causes of the present state of evolution and what inferences for future transformations steps can be deducted thereof.
In terms of more specific terms of reference, so-to-speak research question antedating each chapter of the corpus, the author posed the following hypothesis:
In the section about national identities, the embracing question is the following, since it is suspected that the course of history of both nations observed moulded the tangible layers of NC and thus indirectly the development of mental EU convergence:
Hypothesis 1: Design and intensity of national identity contribute to Polish and Ukrainian aggregated opinion about their home countries` role on the European theatre and general emotions about the contact to Europe
In order to be able to proceed solidly on the territory of BHN, the frame of research is meant to be solidified by retrieving answers to whether the very existence of needs varies across nations or merely their degree of intensity by claiming the following fact:
Hypothesis 2: The scan of advertising in Poland (Pl) and Ukraine (Uk) reveals types of human needs which are not part in commonly cited BHN theories; in other words: human needs are culture-specific instead of universal.
The structure and intensity of BHN like in the case of other features alongside the N-B-V-A (Needs-Beliefs-Values-Attitudes) axis are a fairly difficult entity to seize; what may be observed and thus measured at utmost is when the bearer satisfies a need by an overt action, e.g. when he buys soap to satisfy his needs of body spruceness. However, purchase decisions are decided by so many factors, e.g. branding, packaging, CRM (Customer Relations Management) etc. that it seems more rewarding to observe what conditions of internal tension are activated by advertising as intermediate entity and possible incentive of acquiring the item promoted.
Hypothesis 3: Advertising of fast-moving resp. durable consumer goods delivers indications on single elements of Poles` and Ukrainians` human need structure
Experts of transformations studies commonly consider a brisk small-business sector and salubrious […]
Leseprobe
Inhaltsverzeichnis
Matthias Reichhard
European spirit, adaption to market economy and national identity in Poland and
Ukraine
National culture and its influence on the European Integration, advertising and
entrepreneurship
ISBN: 978-3-8366-1283-8
Druck Diplomica® Verlag GmbH, Hamburg, 2008
Zugl. Technische Universität Bergakademie Freiberg, Freiberg, Deutschland, MA-Thesis /
Master, 2008
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Acknowledgement:
Now that the preparation period for he master thesis at hand draws to a close, the instant has come
to utter thanks above all to my promoter Mgr. Malgorzata Bartosik-Purgat, who has accompanied
this work during one year, was always was ready to give a helpful hand when it came to thematic
questions, quest of papers and solution of technical problems.
Acknowledgement is as well due to Professor Horst Brezinski who managed the legal coordination
of the master thesis in the scope of the double diploma agreement stipulated between the Akademia
Ekonomiczna w Poznaniu and the Technische Universität Bergakademie Freiberg.
Furthermore, I wish to express my gratitude towards Monika Wójcik for linguistic aid in connection
to Polish language, Fabian Flämmer, Martin Maurer and Gerald Schulz for communicating me a
plethora of technical and formal tricks and knacks as well as to my family for the profusion of
mental and emotional support and the advise to find appropriate counterbalance after working
sessions, family Laudage for following this work's advancement, Eva Stricker for granting me
valuable insights in the universe of scientific work and encouraging me to carry on in times of
exhaustion, Professor Michael B. Hinner for guaranteeing that the scope of intended meaning
almost equalled the quantity of shared meaning in his course "scholarly rhetoric" and thus giving
me useful tips and ruses for preparing a paper, furthermore for inspiring me to chose such a topic
thanks to his lectures in intercultural and communication studies. Moreover, I would like to thank
Paulina Pantkowski for permitting me to exchange current opinions and state of mind about
scientific work, M
. G. for giving me strength in a phase of exhaustion due to overwork and
for being shocked of the amplitude of my composition and finally the community of so far
unmentioned friends and comrades within and outside "Feniks" for doggedly, but very gently trying
to keep me from work, proposing me all kinds of divertisement and thus each time reloading my
batteries if te voltage had attained zero; above all Mateusz "Schlawiner" Potaczek, Paula
Skrobaska, Magda Skarzyska, "Anioek" Ania, Arkadius Gemlik, Tobiasz Hoholtyn, Grzegorz
Doberny, Carine Aka, Justin Schlottmann, Thomas Däubler, Michael Schulz, Mathias Köster,
François Nalbert, Christophe Reymen, Paul-Louis Dessery, "panie" Damiano, Robert Simon and
Olivia Bridger.
Danksagung
Jetzt, da sich die Bearbeitungszeit dem Ende entgegengeht, ist es an der Zeit den Personen zu
danken, die in verschiedener Weise mitgeholfen haben, diese Abschlussarbeit entstehen zu lassen.
Besonderer Dank gilt meiner Betreuerin Mgr. Malgorzata Bartosik-Purgat, die mir ein Jahr lang mit
Rat und Tat zur Seite stand, ob es nun um formelle und inhaltliche Fragen oder um Literatursuche
ging.
Gedankt sei außerdem Professor Horst Brezinski, daß er als Vertreter der Freiberger Seite die
Arbeit korrigierte und sich außerdem um die Abstimmung mit den Vorgaben des
Doppeldiplomabkommens zwischen der Akademia Ekonomiczna w Poznaniu und der Technischen
Universität Bergakademie Freiberg kümmerte.
Dank gebührt außerdem Monika Wójcik für sprachliche Unterstützung mit polnischen Texten,
Fabian Flämmer, Martin Maurer and Gerald Schulz, dass sie mir so manchen technisch-formellen
Kniff verraten haben, meinen Eltern und meinem Bruder für geistigen und seelischen Beistand,
Familie Laudage, dass die den Fortschritt meines Werks mit regem Interesse verfolgt hat, Eva
Stricker dass sie mir mit ihrer Magisterarbeit vermittelt hat, wie man ein solches Werk aufbaut und
daß sie mich in Flauten immer wieder angespornt hat, Professor Michael B, Hinner für seine
hilfreiche Einführung in wissenschaftliches Arbeiten dank seines Kurses scholarly rhetoric" und für
seine Inspiration zum Thema dieser Arbeit dank seiner hochinteressanten Vertiefungsvorlesungen
Paulina Pantkowski für einträchtige Gespräche über wissenschaftliches Arbeiten, M
. G.,
dass sie mich in einer Phase mentaler Erschöpfung aufgebaut und mit ihrer Meinung zum Umfang
dieser Arbeit nicht hinterm Berg gehalten hat; Nicht vergessen möchte ich in meiner Danksagung
all die Freunde und Bekannten inner- und außerhalb des Wohnheims "Feniks", die mich bald
bestimmt und mahnend, bald freundlich und charmant versuchten, von der Arbeit abzuhalten,
indem sie mich mit allerlei Verlockungen und Zerstreuungen zu versuchen suchten und mir so
halfen, neue Kraft zu schöpfen. Im einzelnen sind das:
Mateusz "Schlawiner" Potaczek, Paula Skrobaska, Magda Skarzyska, Ania..., Arkadius Gemlik,
Tobiasz Hoholtyn, Grzegorz Doberny, Carine Aka, Justin Schlottmann, Thomas Däubler, Michael
Schulz, Mathias Köster, François Nalbert, Christophe Reymen, Paul-Louis Dessery, "pan"
Damiano. Robert Simon und Olivia Bridger.
Abstract
Since the fall of the Iron Curtain in 1991, the purely economic aspects of
transformation of central and eastern European countries has been studied by many a
researcher. However, the attempt to leave the "that" apart and to shed light on the
"why" of economic features has rather seldomly and methodologically uninspiredly
been made. The aspiration of this work is to cross the field of CEE transformation
and cross-cultural studies and to focus the view on the development in Poland and
Ukraine. Doing so, the hypothesis is posed that national culture influences social,
cultural and economic facets of CEE convergence.
In the first part, an introduction of the transformation matter is provided and
respective cultural theory around and beyond the Hofstede approach reviewed to melt
suggested model dimensions to a customized toolset for part two where transition
perspectives are observed under the light of national identity and masses` disposition
towards Europe as well as human needs in form of advertising and motivations to
entrepreneurship. Results are such that scholars may feel invited to initiate further
subject-related research by gathering respective primary data.
Résumé
Depuis que le Rideau de Fer était tombé en 1991, maints économistes se sont penchés
sur des recherches du procès de transformation dans les pays post-socialistes de l`
Éurope Centrale et Orientale. Cependant, peu de chercheurs ont jusqu`ici tâché
d`éclaircir les couches psycho-sociales de faits-clé macroéconomiques et du
comportement commercial des individus habitant la zone ECO.
C`est précisément la lacune thématique que cette mémoire-ci souhaite d`emplir, en
croisant recherches de transformation et études interculturelles, en se concentrant sur
la Pologne comme de-fait adhérent de l´UE et l` Ukraine, candidat éternel
d´admission.
En conséquent, l`hypothèse de travail est que le concepte de culture nationale se
répercute sur l` harmonisation socio-culturelle et économique des PECO avec la EU-
15.
La première partie de la rédaction introduit le lecteur á la théorie de politique de
transformation resp. au contré des définitons et models de la notion de culture
nationale. e Consécutivement, le corps de la thèse raffine le discours sur la culture
nationale en considérant d`abord sa face visible, soit l`identité nationale polonaise et
ukrainienne en vue de l`approche à l´Europe des Quinze. Ensuite, l` angle de vue
change pour révéler des liens entre le concepte de besoins humains et leur excitaion
par les messages publicitaires avant et après ladisparition du Bloc de l`Est.
Finalement , personnalité d`entrepreneur et propriétés de PME en Pologne et Ukraine
sont illuminées dans la lumière de valeurs nationales.
Le résultat global de la mémoire est tel qu`il devrait inviter d`aucuns
scientifiques de filières correspondantes de prendre la relaie et étayer le fondement
effectué ici de collecte de données primaires bien taillée aux besoins de ce sujet
multidisciplinaire.
Kurzzusammenfassung
Seitdem 1991 der Eisernen Vorhangs fiel, haben etliche Wissenschaftler den
Transformationsprozess postsozialistischer Staaten Mittel- und Osteuropas unter
mancherlei ökonomischen Gesichtspunkten beleuchtet. Hingegen haben bisher recht
wenige Autoren versucht, die Ursache bestimmter volkswirtschaftlicher
Gegebenheiten und ökonomischen Handelns zu ergründen, und wenn, dann meist
mit wenig gehaltvoller Methodik.
An der Schnittstelle zwischen Transformationsforschung und interkulturellen Studien
setzt diese Arbeit an, sich dabei an EU-Mitglied Polen und Beitrittskandidat Ukraine
haltend.
Die Generalhypothese lautet dabei, dass Nationalkultur Aspekte sozialer, kultureller
und wirtschaftlicher Integration spürbar beeinflusst.
Der erste Teil dient der Einführung in die Theorie der Transformationsstudien und
diskutiert Beiträge, die den Komplex Nationalkultur erhellen sollen. Die Darstellng
eines maßgeschneiderten Modells rundet das theoretische Fundament beider
Themenfelder ab.
Im Hauptteil wird neben der Darstellung von nationaler Identität der Einfluß
nationaler Wertsysteme auf Motivation zu Entrepreneurship sowie Merkmale von
KMU geprüft. Des weiteren geht der Autor der Frage nach, welche menschlichen
Bedürfnisse Unternehmen in der ersten Transformationsphase mit ihren
Werbebotschaften in der Masse der Verbraucher zu wecken gedachten - mit Blick auf
die sozialistische Vergangenheit und ob 16 Jahre nach der Wende Anzeichen von
Grundbedürfnisbefriedigung erkennbar sind.
Fazit der Betrachtungen ist, dass Nationalkultur in all seinen Facetten die
Transformation Mittel- und Osteuropas derart prägt, dass das Thema verdient, mit
komplexeren, aussaggekräftigeren Modellen als dem Hofstedeschen aufgegriffen und
mit entsprechenden Sekundärdaten unterlegt zu werden.
Streszczenie
Od upadku elaznej kurtyny w 1991 roku czysto ekonomiczne aspekty transformacji
w pastwach Europy rodkowej i Wschodniej byly studiowane przez wielu badaczy.
Rzadko jednak (lub metodologicznie nieciekawie) próbowano pozostawi sedno
sprawy i rzuci wicej wiatla na przyczyny ekonomicznych cech transformacji.
Celem tej pracy jest przekrojowe przedstawienie bada nad procesem transformacji i
zmian kulturowych w krajach Europy rodkowej i Wschodniej (CEE), a w
szczególnoci skupienie si na rozwoju Polski i Ukrainy. Dlatego te postawiona
zostala hipoteza o wplywie kultury narodowej na spoleczne, kulturalne i
ekonomiczne aspekty konwergencji pastw CEE.
W czci pierwszej znajduje si wprowadzenie do pojcia transformacji oraz jej
kulturowej teorii opartej na podejciu Hofstede'a. Poddane zostalo ono ponownej
analizie w celu zlagodzenia sugerowanych wymiarów modelu do odpowiadajcego
indywidualnym potrzebom zestawu narzdzi potrzebnego w czci drugiej. W teje
czci pokazane s perspektywy procesu przejciowego w wietle tosamoci
narodowej oraz rozmieszczenia mas ludnoci wobec Europy, a take potrzeby ludzkie
w formie reklamowania i zachcania do rozwoju przedsibiorczoci. W rezultacie
naukowcy mog czu si zachceni do prowadzenia dalszych bada zwizanych z
tym tematem poprzez gromadzenie zasadniczych danych.
XI
Table of content
Registry of tables ... XIX
Index of figures ...XX
List of abbreviations... XXIII
Introduction ... 1
Chapter 1: The role of Poland and Ukraine in the CMEA and their position during its
breakdown ... 5
1.1 Introduction to diverse transition CEEC matters : definitions, initial conditions
stage models, endpoint of transition ... 5
1.1.1 Overview on definitions of the transformation issue ... 6
1.1.2 Epitome of the scholars` dispute on the significance of disparate
initial conditions ... 6
1.1.3 Revising literature in quest of accounts of transformation models ... 7
1.1.3.1 Approaches based on GDP growth ... 7
1.1.3.2 A stepwise model of the transformation process presented
by EBRD ... 8
1.1.3.3 Van de Mortel`s three-stage depiction of transition course ... 9
1.1.4 A stub of controverse on the possible endpoint of CEEC transition ... 11
1.2 Economic and general conditions in late communist Poland and Ukraine,
activity of protest movements in the pre-transition period ... 11
1.3 The rapid breakdown of a decade-long morbid economic system Soviet trade
shock of 1989 91... 14
1.4 Link between economic growth and uneven initial conditions among CEEC ... 15
1.5 Gradualism versus Big Bang ... 17
1.6 General socio-economic facts of Pl and Uk today compared to 1990/91 ... 19
1.6.1 Balance sheet line of Poland´s evolution in economy and politics since
the previous mid-generational timespan passed... 19
1.6.2 Frame data sketching Ukraine´s econo-political transition ... 23
XII
Chapter 2: Theoretical contemplations of national culture: literature review, discussion ... 29
2.1 Cultural definitions as embrace of national culture and identity ... 29
2.2 The notion of nation as theoretical agars for the subsequent discussion on national
identity ... 30
2.3 Immersion in the realm of NI by theoretical ancillary constructions ... 31
2.3.1 Presentation of definitions ... 31
2.3.2 Description of models ... 33
2.4 Comments on selected definitions and models of national culture definitions ... 36
2.4.1 Analysis of the regarded NI definitions in respect of utility for transfor-
mation studies ... 36
2.4.2 Exploitation of stated NC models as preparation of following dimension
processing ... 40
2.4.2.1 bipolar modelsgain and flaws: useful parts of approaches à la
Hofstede, critique by McSweeney and Nardon... 40
2.4.2.2 Throsby`s approach of cultural capital ... 44
2.4.2.3 Weaver`s model of the cultural iceberg ... 45
2.4.2.4 Merk`s onion diagram of national culture ... 45
2.4.2.5 Harris and Morgan`s enumeration of partially concrete in- and
outward NC elements ... 45
Chapter 3: Integration of NC traits extracted from selected models ...
47
3.1 Gathering and listing of suitable model elements ... ...................................... 47
3.2 Intermediate grouping in the attempt to establish model frame and content ... 47
3.3 Extraction of a generic term for the distinct NC model layers ... 48
Chapter 4: Main features of Polish and Ukrainian national identity, its occurrence nowadays,
bi-national comparison and role in the countries` process of European
harmonisation ... 49
4.1 Principal human questions vested in the notion of national identity, cohesion to the
domain of national culture ... 49
4.2 Generation and evolution of Polish national identity through its milleniarian history .. 50
4.3 Facets of disturbances overcome by Polish collective consciousness under
communism ... 53
XIII
4.3.1 Was Polish Catholicism as gueradian of national identity affected during the
socialist era? ... 53
4.3.2 Absorption of Polish national consciousness to Soviet
influence on Poland between 1945 and 1991 ... 54
4.4 Material and mental novelties flooding the pool of Polish self- and foreign concept
and public`s general and microculture-dependent reply thereon ... 54
4.5 Poles` self-comprehension as EU member state and harsh realities ordinary
citizens and their representatives during accession negotiations ... 55
4.6 Repercussions of western winds of adversity on the 2003 adhesion referendum,
satisfaction with the events of May 1
st
, 2004, overall spitir of euro-enthusiasm/-
scepticism ... 57
4.7 Conclusive remarks on Poland`s NI-dyed convergence process embraced by popular
patrimony, party initiatives, religion, social clivages and foreign influences ... 58
4.8 Sketch of generation and formation of Ukraine`s national identity with focus on the
turbulence spilling over in the 19
th
and 20 century ... 60
4.9 Disorientations, uncertainties and new alignment in public debate after the
marginalisation of Marxist doctrines in 1991 ... 62
4.10 A threefold set of examples provided to outline Ukrainians´ deal with the subject of EU
engagement ... 63
4.11 Negotiations of candidacy between Kiev and Brussels a long decade of unilateral
advancements ... 64
4.12 Comparison of nature and effect of NI in Poland and Ukraine ... 65
Chapter 5: Theoretical precis of the Basic Human Need subject, draft of respective
consumers` need topology based upon of suitable advertising cases ... 67
5.1 Elusive touch of the cause-effect problem between BHN and national culture ... 67
5.2 Definitions of human needs ... 68
5.3 Human needs models composed by basic and progressive aspirative level... 68
5.3.1 Maslow`s pyramid of human needs, extensions and criticism ... 69
5.3.2 Sites´ suggestion of primary and derivative needs in relation to the
Maslow model ... .. 71
XIV
5.3.3 Hertnon`s (2/2) BHN matrix and multi-sector spiral depiction ... 72
5.4 Additional contributions, behavioural extension of the BHN concept ... 73
5.4.1 Nussbaum`s ten-point compilaton of human aspirations ... 73
5.4.2 Discussion of Knemeyer`s model of human state and behaviour ... 74
5.4.3 General conjunction between BHN, values and customer behaviour... 75
5.5 Criticism of ordinal and enumerative BHN approaches, question of universality
resp. cultural embracement à la Marker ... 76
5.6 Interpretation of style and message in advertising and the mass clientèle`s reaction
thereon for selected durable and non-durable consumer goods in respect of basic human
needs ... 77
5.6.1 Weaving a connection between the BHN concept and marketing, esp.
promotion ...77
5.6.2 The situation in Poland ... 79
5.6.2.1 Amplour and quality of marketing, esp. advertising, in the
socialist period ... 79
5.6.2.2 Extract of publicitarian productions diffused within the first 15
years of capitalism ... 82
5.6.2.2.1 Compilation of promotional creations for consumer
goods (Hygienic products, beer, tobacco and chocolate) ... 82
5.6.2.2.2 Overview of Polish households` equipment by consumer
durables, treatment of the Heyah advertisement campaigns
since 2004 ... 90
5.6.3 The situation in Ukraine ... 94
5.6.3.1 Reality of reklama, propaganda and sneaking glimpse on
western brands and effect on advertising perception in the
early 1990s ... 94
5.6.3.2 Sangwan`s and Golovkina`s survey on the consciousness of
brand`s mental anchorage within customers and dangers for
CEEC inhabitants ... 96
5.6.3.3 Selection of advertising creations meant to influence purchase
behaviour in today`s Ukraine ... 98
5.6.3.3.1 Examination of a set of consumer goods being
concordant the Polish review ... 98
XV
5.6.3.3.2 Illumination of the BHN apealed to by the durable
mobile phones (Nokia) ... 105
5.7 Quintessence of dominating BHN in Polish and Ukrainian advertising paysage after the
turnaround of 1991 ... 107
Chapter 6: Polish and Ukrainian national values and their tracability in customs of business
ownership and the complexion of small private business ... 108
6.1 Elucidation of motives to tie the BV/NV domain to the field of entrepreneurship ... 108
6.2 Definitions and classifications of SMEs and enterpreneurship, semantic connection and
functions for economy ... 108
6.2.1 Semantic enlargement of the entrepreneurship notion since the 18th century a
glance at younger history and the focus of diverse social sciences ... 110
6.2.2 Contemporary visages of entrepreneurship in the tradition of the "X as
Y" scheme ... 112
6.3 Empirical analyses and theoretical reasonings concerning motivations to open
up a business ... 113
6.3.1 Enumeration of approaches for corporate founding research ... 114
6.3.1.1 Extraction of socio-economic sources of entrepreneural
incitation retrieved by the Global Entrepreneurship Monitor
Poland
...
114
6.3.1.2 Ocumenical contemplation of triggers for starting up,
following Grilo`s and Thurik`s supply and demand side
suggestion ... 117
6.4 Sketch of private businessmen`s situation and their competitive mentality under
communist centralized economy, repercussions to business venture in CEE along the
transition phases ... 125
6.5 Establishing the theoretical linkage between the notion of entrepreneurship
and human values ... 130
6.5.1 Bouncken`s et al. contribution on young entrepreneurs` activity in Poland and
Germany, following half of Hofstede`s cultural dimensions ... 130
6.5.2 Wenneker`s et al. regression series on uncertainty avoidance`s influence on the
rate of Business Ownership ... 132
XVI
6.5.2.1 Description of examination arrangement, regression variables,
correlations, control variables, dummies as well as rough
confirmation of certain repercussions of uncertainty avoidance on
entrepreneurship
...
132
6.5.2.2 Direct effects of the uncertainty avoidance level on the rate of
Business
Ownership
...
133
6.5.2.3 Depiction of respective indirect effects ... 134
6.6 Collection of characteristics of entrepreneneurs and their actions, attempt to interpret
these particularities with the toolcase of Dyczewski`s Polish national value listing ... 135
6.6.1 Introductive key date on the situation of Polish private business in the
pre-and early post transition period ... 135
6.6.2 Changes of the legal framework envisaging to create a more entrepreneurship-
friendly climate, effects there of within the first decade reforms ... 137
6.6.3 Family, kin and friends as microcultures Polish private enterprises`
lifecycle is commonly incorporated to ... 138
6.6.4 Darrell`s idea of the christian entrepreneur transferred to a brief reasoning on
religion as determinant for startups in Poland ... 141
6.7 Reflections on the dependence of Ukrainian entrepreneurship particularities on Ray`s
selection of traditional and communism-related national values ... 146
6.7.1 Covered in the deepest shadow of the Kremlin towers: Circumstances of
non-state-owned establishments in the former Ukrainian SSR ... 146
6.7.2 Basic facts on the Ukrainian micro-enterprise sector, evolution manifestations
between 1991 and 2004 ... 147
6.7.3 Assessment whether the worldview of life`s dirty rules is still effective within
modern Ukrainian business owners ... 149
6.7.3.1 Corruption: Ukrainians` well-tried lubricant to keep the economic
geardrive running today? ... 149
6.7.3.2 Cherishment of clan, friendship and colleagial ambience and distrust
of more outward parties as controverse social effects for business
operation
...
152
6.7.3.3 Have Ray´s communism-breeded values , a.o. among private
businessmen outlived the recent change of an era? ... 153
6.7.3.4 Digest of cognitions on illicit business habits ... 154
6.7.4 Creativity and skill of independent thinking, neglected by state order under
XVII
communism, reassessed under the light of patent application activity in recent
years resp. arrangement of R&D efforts... 154
6.7.5 Paragraph explaining why the author dared to omitt the treatment of Orthodox
faith in Ukraine connected to entrepreneurship characteristics ... 159
6.8 Verification of hypothesis 5 and brief comparison of interdependences between
national values and entrepreneurship in Poland and Ukraine ... 160
Conclusion ... 161
Annex ... XXIII
List of paper and report references ... LXVI
Directory of book-based sources ... VC
Registry of online sources ... CIII
Owiadzenie ... CIXX
XIX
Registry of tables
tab. 1: Initial conditions of the diverse blocks of former and present socialist countries in
connection to level of development, economic resources and growth ... 7
tab. 2: Prospectives of CEEC`s convergence in terms of GDP to OECD countries ... 8
tab. 3: Export performance of the Polish plan economy towards the Soviet Union ... 14
tab. 4: Comparison of prices in exports allocated to the Soviet Union with prices reigning on third
markets: Poland, 1989 ... 15
tab. 5: Assumptions on the outcome of the Soviet Trade Shock based on several macoeconomic
effects
... 15
tab. 6: Development of real GDP in Central and Eastern Europe ... 18
tab. 7: Prediction of long-term growth and prosperity within the conglomerate of CEEC ... 20
tab. 8: Macroeconomic key data of the Polish economy for the end of the 1990 ... 23
tab. 9: Totalizing result sheet of Orth`s and Koenig`s variance test on the chosen emotive states
significance connected to the sample participants` exposition to the model-like FMCG
apples and mineral water ... 82
tab. 10: Scores for Inglehart`s bipolar value dimensions for the accession states of the 2004 and
2007 enlargement rounds, data stated for 1999 ... 88
tab. 11: Illustrations the new thresholds and requirements of characteristics for SME adopted by
the European Commission in January 1
st
, 2005 ... 109
tab. 12: Wenneker`s at al. correlation matrix as preparative for the regression model on direct and
indirect influences of UA on Business Ownership ... 132
tab. 13: The rate of Business Ownership regressed by uncertainty avoidance and a selection of
other, socio-economic indirect variables as direct factor of impact ... 133
tab. 14: Representation of regression results (direct) for the three temporal samples used ... 133
tab. 15: Corresponding regression on BO rate with uncertainty avoidance as indirect factor and the
addition of suitable year dummies ... 134
tab. 16: Representation of regression results (indirect) for the three temporal samples used ... 134
tab. 17: Correlation matrix of the whole set of dependent (present and potential self-employment)
and independent variables (Freytag and Thurik) ... 135
tab. 18: The influence of a series of culturally related variables on the preference for
entrepreneurship and factive entrepreneurship in the 25 EU member states and the US .. 135
tab. 19: Compilation of private households` inventory after the breakdown of communism ... 141
XX
tab. 20: Influence of socio-cultural factors on the existence and if so scope of land and real estate
property in CEEC during 40 years of communist era observed ... 141
tab. 21:Balance sheet of structural reforms in 5 CEEC with accent on the GDP share of Ukraine`s
private sector ... 148
tab. 22: Inventive power of Ukrainian citizens, sufferably expressed by the ratio of number of
patent propositions and variants of specification of aggregated economic yield ... 148
tab. 23: Numeric incidence of Ukrainian and British companies in different strata determined by
the scope of employees ... 155
Index of figures
fig. 1: Matrix representation of CEEC´s points of departure for economic transition ... 7
fig. 2: Diagram of Van de Mortel`s three transition stages with stress on possible two-way
development
... 10
fig. 3: Estimated time accomplishing reforms concerning state intitutions, economic structure and
property rights ... 10
fig. 4: The Cultural Iceberg model as depiction of overt and covert traits of NC ... 35
fig. 5: Abraham Maslow`s original five-level pyramid of human needs (simplified depiction) ... 69
fig .6: Norwood`s perfection of Maslow`s basic BHN model by the storey "spirituality" ... 69
fig. 7: Seven-level variant of Maslow`s hierarchy of human needs, extention by cognitive and
aesthetic components ... 69
fig. 8: Hertnon`s Theory of Universal Human Needs Matrix arrangement ... 72
fig. 9: Hertnon`s and Ten Berge`s evolution of the Universal Human Needs Model as nautilus ... 72
depiction
fig. 10: Analytical needs and desires ... 74
fig. 11: Emotional needs and desires ... 74
fig. 12: Physical needs and desires ... 74
fig. 13: Well-being level needs and desires ... 74
fig. 14: Conceptual scheme of connections between personal and social values, diverse human need
categories and customer behaviour ... 75
fig. 15: Conceptual diagram of selected emotions aroused by advertising, the consumption incentive
as soon as mental procedures as "black box" and advertisement attitude as upstream
component
... 82
XXI
figs. 16 and 17: Shopping trends and purchase behaviour product features, shopping frequency,
segmentation into social groups ... 88
fig. 18: Prevalence of and loyalty to branded, low involvement convenience goods ... 88
fig. 19: Questionaire concerning diverse properties/advantages of branded convenience goods ... 88
fig. 20: Survey candidates being seriously involved in preparatifs for starting up, displayed by
activity status and gender ... 115
fig. 21: Level of EU citizens` involvement in business foundation, displayed function to country of
origine (average of 2001-2004) ... 115
fig. 22: Percentage of self-employed who started up either as act of necessity, out of opportunity or
for other reasons (OECD countries plus Croatia and Slovenia) ... 115
fig. 23: Ratio of opportunity and constraint as ignition for BO (OECD countries plus Croatia and
Slovenia) ... 115
fig. 24: Percentage of persons attributable to certain status of work to envisage the possibility to
open up a company within the next term ... 115
fig. 25: Rate of positive evaluation of oneself`s business skills function to age ... 117
fig. 26: Rate of positive evaluation of oneself`s business skills according to activity status ... 117
fig. 27: Rate of positive evaluation of oneself`s business skills depending on the founded business`
lifecycle ... 117
fig. 28: Rate of positive evaluation of oneself`s business skills related to level of development of
Polish governmental districts ... 117
fig. 29: Demographic distribution in Ukraine and Russia for 2003 according to age cohorts ... 122
figs. 30 and 31: Evolution of the demographic structure in Ukraine and Russia a) in 2025 and b) in
2050 (prediction) ... 122
fig. 32: Business environment in Poland and Ukraine in 2002, average score by dimension and
country on a scale of 1 (minor obstacle) to 4 (major obstacle) ... 138
fig. 33: Sources of financial support tapped by Polish private business founders ... 141
fig. 34: Amplour of decisions of self-sufficience, reliance on state support and a miscellaneous
approach alongside dimensions of personnel extensiveness ... 154
XXIII
List of abbreviations:
ANOVA analysis - Analysis of Variance
B2B Business to Business
B2C Business to Customer
BCI Business Competitiveness Index
BCR Brand Concentration Ratio
BHN Basic Human Needs
BO- Business Ownership
B-V-A system belief-value-attitude system
B-V-A-N system belief-value-attitude-need system
CC Corporate Culture
CEEB Central and Eastern European and Baltic Countries
CEC Central European Country
CEEC - Central and Eastern European Countries
CIS Community of Independent States
CMEA/COMECON Council for Mutual Economic Aid
CPI customer price index
c.p. - ceteris paribus
CPSU Communist Party of the Soviet Union
CR Concentration Ratio
CSSR Czechoslovak Socialist Republic
EBRD European Bank of Reconstruction and Development
EN - entrepreneurship
EoS Economies of Scale
EU European Union
FDI Foreign Direct Investment
FMCG Fast-Moving Consumer Goods
FSU - Former Soviet Union
GDP Gross Domestic Product
GNP Gross National Product
GCI - Growth Competitive Index
GEM Global Entrepreneurship Monitor
GLS Generalized Least Square
XXIV
IDV individuality/collectivity index
IVCO - individualism/collectivism
L-G-B-T Lesbian-Gay-Bisexual-Transgender issue
LTO long-term orientation
MAFE masculinity/femininity
MAS masculinity/femininity index
MTV Music Television
NC national culture
NI national identity
NV national values
OSL - Ordinary Least Squares (regression)
pd product innovation
PD power distance
PDI power distance index
Pl and Uk Poland and Ukraine
pz process innovation
R&D Research and Development
SME Small and Medium-sized Enterprise
SSR - Soviet Socialist Republic
TAI - Technology Achievement Index
ToT - terms-of-trade
UA uncertainty avoidance
UAH Ukrainian Hrvynia
UAI uncertainty avoidance index
USSR Union of Soviet Socialist Republics
1
Introduction
The stepwise and finally sudden collapse of the Soviet Union and its sphere of influence which
befell between 1989 and 1991 retraced the political and economic map of Europe thoroughly and
probably triggered the largest-scale transformation process of modern times immense both in
terms of territory, shattering and then restructuring of political and military balance kept during the
Cold War period and several levels of catching up in perspective of future EU admission and EI
(European Integration). In the course of the past 15 years, the transition process of CEEC (Central
and Eastern European Countries) has been elucidated under diverse aspects of this newly created
economic section as the following sketchy literary glimpse shall clarify:
Rodrik,
1
Roland & Verdier
2
and Kornai
3
dealt with the reasons of the Soviet trade shock resp. the
consequences of the sharp contraction of the national production graph, Van Mortelen
4
and Aidis &
Sauka
5
presented and discussed models on discernible stages of transition, attributed features of
structural and regulatory politics to the single levels and reflected on the possible time of perfection
of that transitory period.
6
In addition, Aghion & Blanchard
7
as well as Gaddy & Ickes
8
focussed on
the speed of transition in the context of the highly controversially discussed approaches of
gradualism versus shock therapy (Big Bang)
9
and De Melo et al.
10
examined the impact of disparate
initial conditions on the transformation trajectory. Finally, Fischer & Sahay,
11
Dabrowski et al.
12
and Wyplosz
13
drew a balance of the achievements and imperfections discernible after twice 11
resp. 10 years of transition process whereas Licht et al.
14
assessed the progress which CEEC had
1
D. Rodrik, 1992, Making sense of the Soviet Trade Shock in Eastern Europe : A Framework and some
Estimates, National Bureau of Economic Research, Cambridge, Massachusetts.
2
G. Roland and T. Verdier, 1997, Transition and the Output Fall, University of Michigan Business School, Ann
Arbor, US.
3
J. Kornai, 1990, The Road to a Free Economy, Shifting from a Socialist System: The Example of Hungary,
W.W. Norton publishing, New York.
4
E. Van de Mortel, 2002, An Institutional Approach to Transition Processes, Ashgate, Aldershot, Hampshire.
5
R. Aidis and A. Sauka, 2005, Entrepreneurship in a Changing Environment: Analyzing the Impact of
Transition Stages on SME Development, ECSB, Turku, Finland.
6
R. Aidis, 2005, Entrepreneurship in Transition Countries: A Review, SSEES University College, London.
7
P. Aghion and O.J. Blanchard, 1994, On the Speed of Transition in Central Europe, NBER Macroeconomicy
Annual, MIT Press, Cambridge, Massachusetts, US.
8
C. Gaddy and B. W. Ickes, 2002, Russia`s Virtual Economy, Bookings Institution Press., Washington D.C.
9
V. Popov, 2006, Shock Therapy versus Gradualism Reconsidered: Lessond from Transition economies after
15 Years of Reforms, New Economic School, Moscow and Institute of European and Russian Studies, Carleton
University, Ottawa, Canada.
10
M. De Melo, C. Denizer, A. Gelb and S. Tenev, 1997, Circumstance and Choice: The Role of Initial
Conditions and Policies in Transition Economies, The World Bank Development Research Group, Washington D.C.
11 S. Fischer and R. Sahay, 2000, The Transition Economies after ten Years, NBER, Cambridge, Massachusetts, US.
12
M. Dabrowski, S. Gomulka and J. Rostowski, 2000, Whence Reform? A Critique of the Stiglitz Perspective,
London School of Economics and Political Science.
13
C. Wyplosz, 1999, Ten Years of Transformation: Macroeconomic Lessons, Graduate Institute of International
Studies, Geneva, and CEPR, London.
14
A.N. Licht, C. Goldschmidt and S.H. Schwartz, 2003, Culture Rules: The Foundations of the Rule of Law and
2
made within the first 12 years of national restructuring in connection to a functioning juridical
apparatus and governmental institutions. This enumeration chain's of papers last link differs from
the residual links since it tries to effect the bridging between the description of tangible measures
executed in economic politics and elements of NC (National Culture) as upstream action catalysts,
15
namely by regressing rule of law by selected components of Schwartz`s BHV (Basic Human Value)
nomenclature.
16
Joyously, Licht et al. apparently recognized that the Hofstede model of NC
dimensions
17
seldom is applicable to more than either an as introduction into issues of NC or for the
treatment of fairly superficial aspects of culture a cognition which unfortunately cannot be
attributed to lots of other colleagues which tried to cross-over aspects of transformation research
with theories of cultural studies. As exemplary cases, the following publications shall be
mentioned: Hauke`s study on knowledge transmission a.o. (among others) in Polish enterprises
18
where NC foundations are after all slightly elucidated by the Hofstede-like approaches prepared by
Trompenaars & Hampden-Turner;
19
Zadoroshna besides feeding her analyses with social and
local "soft" variables - seemingly relied in her research paper about a.o. cultural influence on FDI
(Foreign Direct Investments) decisions completely on this Dutch scholar's renowned as contested
20
NC characteristics
21
probably thanks to the relatively large country pervasion and comfortable
comparability of dimension values;
22
eventually Bouncken`s et. al examination of motives of BO
(Business Ownership) in Poland and Germany,
23
which in fact provides an interesting comparison
between countries within and off transition, but backs its contemplation merely on three dimensions
of Hofstede`s model, omitting UA (uncertainty avoidance).
It is exactly at this limited application of instruments from the in fact spacious toolbox provided by
the generic and partial aspect of NC where this work is meant to be planted. The author's incentive
to choose this topic was not only to show how "soft" cultural factors influence economic activity as
"éminence grise", but above all to refine the examination of NC influence on the CEEC transition
Other Norms of Governance, University of Michigan Business School, Ann Arbor, US.
15 ibid.p. 26.
16
S.H. Schwartz, 1994, Universals in the Content and Structure of Values: Theoretical Advances and Empirical
Tests in 20 Countries, Advances in Experimental Social Psychology, New York.
17
G. Hofstede, 2001, Culture`s Consequences: Comparing Values, Behaviours, Institutions and Organisations
Across Nations", B&T publishing house, Beijing, second edition.
18
A. Hauke, 2006, Impact of Cultural Differences on Knowledge Transfer in British, Hungarian and Polish
Enterprises, Fondazione Eni enrico Mattei, Milan and University of Economics, Pozna.
19
F. Trompenaars and C. Hampden- Turner, 2002, Siedem wymiarów kultury znaczenie rónic kulturowych
wdzialalnoci gospodarczej (Riding the waves of culture- understanding cultural diversity in business), Oficyna
Wydawnicza, Kraków.
20 B. McSweeney, 2003, Is National Culture a Myth?, Royal Holloway School of Management, London.
21
O. Zadoroszna, 2006, The impact of Cultural and Social Biases on Investment Decisions and Trade in the
context of attracting FDI to particular countries, Annual EERC/EROC Research Conference, Kiev.
22 G. Hofstede, 2007, Cultural Dimensions, ITIM, Stockholm, URL:
www.geert-hofstede.com
(11.08.2007).
23
R.B. Bouncken, J. Zagvodzina, A. Golze and A. Mrozewska, 2006, A Comparative Study of Cultural
Influences on Intentions to found a New Venture in Germany and Poland, CEROM, Montpellier, France.
3
process by discussing less cited, maybe more useful theoretical propositions. Subsequently, the NC
complex is broken down on cultural values and BHN (Basic Human Needs) before transferring it
to two especially adequate matters of economic science.
In addition, the graduand was decided to dare the cross-over of two fields of research which
appealed to the author due to his speciality of cross-cultural studies resp. of a sojourn as exchange
student in Poland, accompanied by respective occupation with issues of transformation in CEEC.
The major objective of this work is besides economic considerations to estimate how far Poland
and Ukraine have grown on the social and cultural EI path layer of inter-country convergence
which is assumedly even more difficult to achieve than consensus in an economic and political state
union
24
- what are the causes of the present state of evolution and what inferences for future
transformations steps can be deducted thereof.
In terms of more specific terms of reference, so-to-speak research question antedating each chapter
of the corpus, the author posed the following hypothesis:
In the section about national identities, the embracing question is the following, since it is suspected
that the course of history of both nations observed moulded the tangible layers of NC and thus
indirectly the development of mental EU convergence:
Hypothesis 1: Design and intensity of national identity contribute to Polish and Ukrainian
aggregated opinion about their home countries` role on the European theatre and general
emotions about the contact to Europe
In order to be able to proceed solidly on the territory of BHN, the frame of research is meant to be
solidified by retrieving answers to whether the very existence of needs varies across nations or
merely their degree of intensity by claiming the following fact:
Hypothesis 2: The scan of advertising in Poland (Pl) and Ukraine (Uk) reveals types of human
needs which are not part in commonly cited BHN theories; in other words: human needs are
culture-specific instead of universal.
25
The structure and intensity of BHN like in the case of other features alongside the N-B-V-A
(Needs-Beliefs-Values-Attitudes) axis are a fairly difficult entity to seize; what may be observed
and thus measured at utmost is when the bearer satisfies a need by an overt action, e.g. when he
buys soap to satisfy his needs of body spruceness. However, purchase decisions are decided by so
many factors, e.g. branding, packaging, CRM (Customer Relations Management) etc. that it seems
24
I. Rojsek, 2000, A comparison of the purchasing and consumption behaviour of Slovenian and other Eastern
European consumers , International Marketing Review, Bingley, UK, p. 510.
25 S. Marker, 2003, Unmet Human Needs, op. cit.
4
more rewarding to observe what conditions of internal tension are activated by advertising as
intermediate entity and possible incentive of acquiring the item promoted.
Hypothesis 3: Advertising of fast-moving resp. durable consumer goods delivers indications
on single elements of Poles` and Ukrainians` human need structure
Experts of transformations studies commonly consider a brisk small-business sector and salubrious
entrepreneurial spirit as high-impact fuel for economic growth. Given that all economic subjects,
ergo self-employed as social subdivision as well, absorbed their macroculture´s body of thought and
finally economic behaviour, the main point of interest of the last chapter is:
Hypothesis 4: Entrepreneurial motivation and the founding rate as well as design of Small
and Medium-Sized enterprises (SME) are influenced by the set of national values prevailing
in the Polish and Ukrainian society
Concerning methodology and approach, it shall be mentioned that the thesis is backed on secondary
data resp. that the initial half provides an introduction into the topics of transition and NC is given
while in the main section, three issues are theoretically handled, then subsumed on both countries
separately; afterwards, the outcomes are compared and the findings digested with regard of the
target countries` transition process.
As for the agenda provided for the two following main parts, the proceeding will be roughly
designed as follows:
In the first chapter, general particularities, e.g. content and length, of transition phases in CEEC are
discussed on the basis of two stage models elaborated by the EBRD (European Bank of
Reconstruction and Development)
26
and Van den Mortel
27
. In addition, macroeconomic benchmark
data are briefly presented to round up the economic founding of the thesis.
In chapter 2, the complex of culture is narrowed down on NC by effecting a literature review about
definitions like Cateora`s and Ghauri`s
28
, an extensive discussion of classic models like
Hofstede`s,
29
Trompenaars`
30
or Hall`s
31
and a fugitive outlook on ulterior suggestions like
26 European Bank of Reconstruction and Development, 1997, Transition Report 1997, London.
27
E. Van de Mortel, 2002, Institutions - Transition Processes, op. cit. p. 23.
28
P.R. Cateora and P. N. Ghauri, 2000, International Marketing -European Edition, McGraw-Hill publishing
Company, London, 3rd edition, pp. 109-116.
29
G. and G.J. Hofstede, 2004, Cultures and Organisations: Software of the Mind, McGraw-Hill Professional,
Bemont, California, US, pp. 39-240.
30
C. Hampden-Turner and F. Trompenaars, 1997, Riding the Waves of Culture: Understanding Diversity in
Global Business, McGraw-Hill publishing, Bemont, California, US, second edition, pp. 4-10.
31
E.T. Hall, 1990, The Hidden Dimension, Anchor publishing house, Jacksonville, Florida, pp. 1-20.
5
Throsby`s thoughts on cultural capital.
32
Chapter 3 eventually extracts dimensions of the deployed model sample which are expected to suit
the corpus` observations. In this intention, the selected NC characteristics are assorted and digested
into four overall entities mainly meant as instruments for ulterior research due to problems of
data procurement.
The corpus begins with chapter 4, which deals with the development of Polish and Ukrainian NI
(National identity) in the course of history, the impact of communist body of thought and life under
real socialism thereon and repercussions of the detected NI structure on the nations` position
towards the EU and ingoing transition.
The first section of chapter 5 provides a theoretical basis for the BHN concept, though.
Afterwards, suitable model elements are applied in the approach to scan advertising productions
published in the post-socialist era in the aim to examine whether BHN are universal or culture-
biased resp. to draw a sketch of local BHN activation levels and contingently detect changes therein
since the collapse of the East Block.
The thesis ends with the transfer of Dyczewski`s resp. Rays NV listing to the question how SME
(Small and Medium-Sized enterprises) scope and structure, entrepreneurial behaviour and the start-
up process are influenced by the central element of the B-V-A (Beliefs-Values-Attitude)
continuum.
33
After the common theoretical entering, the accent is laid on attachment to family
surroundings in Poland resp, the "foul rules and views of existence" in Ukraine. Key readings for
this section were the GEM (Global Entrepreneurship Monitor) Report for Poland
34
resp. papers by
Dixon & Polyakov
35
resp. Senchuk & Yacoub
36
for Ukraine.
32
D. Throsby, 2005, On the Sustainability of Cultural Capital, Macquarie University, Sydney.
133
R. Culatta, Richard and S.A. Goldberg, 1995, Stuttering therapy. An integrated approach to theory and
practice, Allyn and Bacon publishing, Boston, p. 111.
34
K. Baclawski, M. Koczerga and P. Zbierowski, 2005, Studium przedsibiorczoci w Polsce w roku 2004,
Global Entrepreneurship Monitor, Pozna, Poland.
35
D.F. Dixon and E.V. Polyakov, 1998, The Path to Private Business in the USSR, Business and Economic
History, Amsterdam
36
M. Yacoub and B. Senchuk, 2000, An IF Survey of Ukrainian Small Enterprises, The World Bank Group,
Washington D.C. and IFC, country section Ukraine, Kiev.
6
Chapter 1
The role of Poland and Ukraine in the Council for Mutual Economic Aid
(CMEA) and their position during its breakdown
1.1 Introduction to manifold transition CEEC matters : definitions, stage models, end point of
transition
Prior to immersing into the distinct circumstances of the transformation process of Pl and Uk, it
seems opportune to briefly review the relevant literature on what transition from a centrally planned
to a market economy actually means and to examine models which clarify the chronological and
above all semantic order of transition into a poly-phase continuum.
1.1.1 Overview on definitions of the transformation issue
A coarse, general definition of transition is delivered by the EBRD, saying that the task of political
and economic reorientation in post-socialist countries is primordially about adapting the totality of
economic, financial and legal institutions in the former CMEA region, principally state-managed
ones, since the overwhelming majority of respective facilities were not kept in private hands
37
- to
the rules of game of market economy
38
: a.o. demand-site determined generation of goods and
services, perceptive of rents both for suppliers and consumers, stimulation for self-managing
owners to gain a competitive advantage, e.g. through innovation.
39
In addition, the EBRD thematic
report designates the process of transition both as desired final state, but also as end in itself.
40
Here, the diplomat disagrees on the first opinion, reasoning that the ultimate goal of formerly
communist countries should after all be to catch up at least the EU-15 average in political and
economic development. However, the second statement is less controversial since it can be affirmed
that during this change in practically all domains of Poles` and Ukrainians` existence, both peoples
have the chance to see its identity reflected in the mirror of constant comparison to Western
neighbours and "brother countries" in transition.
37
Institute for Economic Research and Policy Consulting, 2007, Statistics of Ukraine`s Economy; Historical
Data 1991-2001, Kiev, table 8.3 A, URL:
ier.org.ua/tables
(06.04.2007).
38 European Bank of Reconstruction and Development, 1994, Transition Report , London, p. 3
39
R. Aidis and A. Sauka, 2006, EntrepreneurshipEnvironment: Analyzing the Impact of Transition Stages on
SME Development, European Council for Small Businesses and EN (ECSB): second Inter-RENT Online Publication, p.
8.
40 European Bank of Reconstruction and Development, 1994, Transition Report , op. cit.
7
1.1.2 Epitome of the scholars` dispute on the significance of disparate initial conditions
Concerning the significance of different initial conditions predominantly the cleavage between
CIS (Community of Independent States) states and former satellites of the SU
41
expressed a.o. by
degree of technical progress and social achievements, economic hold-up towards the FSU (former
Soviet Union), macroeconomic imbalances, time of affiliation to the CMEA block, negative
asymmetric shocks of the aggregated production function like social turmoils, state of institutions
and the nature of relations to the EU.
42
It is particularly the last enumeration link which is likely to
gain in importance function to the progression of the transformation process and might serve as not
unessential explanation why Poland became a member of the EU in 2004 whereas in the case of
Ukraine, not even serious accession negotiations have taken place so far.
43
< figure 1 about here >
Thus, whereas the characteristics of initial conditions can be figured out in a rather straightforward
way and their existence is largely confirmed in literature, economists do not attribute unanimously
an importance to these factors which may cause path diversions between the transforming CEEC.
For instance, Merlevede claims that the findings effected by de Melo
44
and other research
colleagues concerning the impact of manifold inequalities after the collapse of the East Bloc
certainly influenced a transition country's pace and quality of development, but that negative
economic and political conditions are gradually levelled by means of appropriate stabilisation
politics.
45
< table 1 about here >
For the present work, this scholarly dispute is of inferior significance because most of the features
of disparity in initial conditions which are commonly cited refer to macroeconomic facts and lie
consequently astray of a view on CEE integration based on cross-cultural studies part the status
gap of Pl and Uk in terms of relations to the EU.
1.1.3 Revising literature in quest of accounts of transformation models
41
J.F. Linn, 2004, Economic (Dis)Integretion Matters: The Soviet Collapse Revisited,Transition in the CIS:
Achievements and Challenges, Academy for National Economy, Moscow, p. 9.
42 ibid. p. 2.
43
I. Burakovski, L. Vinhas de Souza, R. Schweickert, V. Movchan and O. Bilan, 2005, Ukraine: «Sandwiched»
between the European Union and Russia, GDN, New Dehli, India, p. 2.
44
M. De Melo, C. Denizer, A. Gelb and S. Tenev, 1997, Initial Conditions - Transition Economies, op. cit. table
6.
45
B. Merlevede, 2000, Growth in transition economies: A review of the literature, University of Antwerp,
abstract and p. 23
8
Now that some light has been shed on the nature of transition in post-socialist countries and on the
meaning of disparate initial conditions, the moment is appropriate to review the corresponding
literature in the purpose to retrieve clearance on what steps of transition can be distinguished and
what are its characteristics. Such a compilation of chronological and semantic models may be
helpful for the problem to discern on which stage of economic and institutional transition Pl and Uk
probably are. In fact, findings on overt and thus directly measurable features of transition
constitutes a basis for the exploration of most often covert, upstream influences of NC on this
process.
1.1.3.1 Approaches based on GDP growth
During the research of publications, one soon encounters approaches like the change of GDP (Gross
Domestic Product), studies on the influence of institutional change on economic development or
corruption perceived by inhabitants of CEEC, but these proposals have two severe drawbacks:
Generally, all solutions are based on only one indicator of transition and thus lack of substance if
studied on their own; furthermore, GDP as independent variable is ambiguous because it is not
sufficient to consult the pure numeric modification of GDP, but one should also study the error
variables which distort the results, e.g. massive aid in the case of Albania.
46
< table 2 about here >
The approaches of corruption and institutional change seem more promising, especially the latter
one in which Reiser found out strong correlation between institutional reforms and economic
upturn;
47
however they are not utilizable for the purpose to examine transitional stages because both
models omit the important early phase of transition, since their time row begins in 1995 resp. 1993.
1.1.3.2 A stepwise model of the transformation process presented by EBRD
In contrast, the EBRD offers a more comprehensive, diversified model on the single phases of
transitions and its indicators, departing from a two-step evolution path:
In the years following the collapse of the central planning system, a formal economic and
institutional framework has to be established, i.e. privatisation (small-scale) , liberalisation of
economic activities (market operation according to the free game of supply and demand forces,
quasi free interior and foreign trade) and rebalancing macroeconomic frame conditions.
48
One could
baptise these measures static or structural phase of transition.
46
R. Aidis and A. Sauka, 2006, Entrrepreneurship changing environment... , op. cit., appendix 6.
47 M. Raiser, M. Di Tommaso and M. Weeks, 2001, The measurement and determinants of
institutional change: Evidence from transition economies, EBRD working paper series, London, p. 1.
48 European Bank of Reconstruction and Development, 1997, Transition Report 1997, op. cit.
9
In the second phase, the achievements of the initial transition years are extended in order to thrust
the drive of economic growth. Major challenges are in this respect the accomplishment of
privatisation (large-scale), structural and organisational improvement of company output,
installation and implementation of a reasonable competition policy, establishment of modern
infrastructure and reforms of the financial sector.
Given that all efforts of this step comprise market and institutional circumstances in the purpose to
accelerate the development path to a stable market economy,
49
this period may be called dynamic or
deepening phase of transition.
A striking comment Aidis and Sauka add to the compilation of particularities of the second phase is
that institutional reforms and the liberalisation of markets intends to change the behaviour of
economic subjects in CEEC.
50
A first attempt of interpretation would be that in the first years after
the overthrow, people were firstly excessively occupied by relaunching vital domains of private and
public life and were still considerably biased by socialist-style economic and institutional processes
whereas in the era after the country's stabilisation a change of mindset began.
For the present thesis, the mentioning of changes in behaviour within the post-socialist societies
constitute a crucial part of the EBRD transition process model because behaviour represents the
most obvious, tangible element of NC according to the N-B-V-A continuum
51
, the Cultural Iceberg
model
52
and other depictions of cultural levels. Thus, this elaboration may serve as a gateway
towards the inner layers of Polish and Ukrainian NC.
The EBRD solution already delivers important facts on the chronological process of transition, yet
it is rather roughly subdivided into only two steps and lacks a.o. of assumptions of how long the
single stages of transitions are likely to last.
1.1.3.3 Van de Mortel`s three-stage depiction ode transformation process
Van de Mortel`s three-step models remedies these imperfections by arguing that a short additional
phase precedes the process of economic and institutional stabilisation and dynamics (grouped on
one level). According to Van den Mortel, transformation is already determined by the question if a
country can decide its strategy of reform before the overthrow or if its development path is imposed
by the sudden breakdown of the old system. If the country was not surprised by the changes, the
selection of an appropriate transformation strategy can only succeed if the reigning political
structures allow this step a promise which is seldom fulfilled since the political leaders of the
49 ibid.
50
R. Aidis and A. Suka, 2006, Entrepreneurship changing environment, op. cit., p. 9-10
251
R. Culatta, Richard and S.A. Goldberg, 1995, Stuttering therapy..., op. cit.
52 G.R. Weaver , 1993, Contrasting and Comparing Cultures, University Press of Mississippi, p. 160.
10
incumbent apparatus are usually all but inclined to think about the country´s future after the system
they are involved in will have disappeared. The first stage of transition is the more likely to be
accomplished the huger past experience with systemic changes are within a certain country. Thus,
Van de Mortel seems to be part of the camp of economists who attribute great importance to
differences in starting conditions, in particular NI elements like language and values compared to
the cultural sphere transition is meant to head for in our case EU-27 conglomerate.
The first transition stage is normally short and ends when the concrete reform process of legislation
and restructuring begins.
The procedures which takes place in the second transition stage are roughly congruent with the ones
in the EBRD compilation, yet they differ in the perception of privatisation and the focus on
behaviour. In fact, Van de Mortel poses a demand on the quality of disintegration of formerly state-
owned companies which appears like a cue for contemplations on EN and values systems treated in
the last chapter of this work when she argues that companies have to be transferred to the private
hand in the way that the new proprietors are instructed in decision-making, i.e. in behaving like true
businessmen.
According to Van de Mortel, the troubling consequence of insufficient deployment of legal and
economic framework is the regression to the initial stage so-to-speak a countrywide penalty lap.
Moreover, this model stresses the change of corporate behaviour, personal attitudes and cultural
traits as part of the overall stabilisation of the country's economy.
53
This last comment is certainly interesting, however, it remains to be explored partly in chapters 5
and 6 below - whether the NC for post-socialist countries will be so adaptive
54
that it will change in
fact within one single transition stage - albeit a long one - , even until the supposed end of
transition anyway.
In the final stage of transition, the institutional framework is established and economic subjects tend
to optimize their business behaviour in order to gain maximum output. Unlike the EBDR model,
Van de Mortel includes at this stage the risk a transition country bears to relegate to the second
level when the population does not achieve the expected level of wealth. Yet, the most important
comment connected to this thesis is that transition can only be completed successfully if the formal
and informal institutional conditions are well coordinated. In the attempt to decipher informal
factors, Aidis` and Sauka`s interpretation is adopted, saying that the term comprises cultural
53
E. Van de Mortel, 2002, Institutions - Transition Processes, op. cit. p. 23
54
L.A. Samovar, E. Porter and L.A. Stefani, 1998, Communication between Cultures A Reader, Wadsworth
Company, Bemont, California, p. 47.
11
elements, especially values and attitudes.
55
< figure 2 about here >
All in all, Van de Mortel`s solution is more refined than the EBRD approach and gives the
impression to suit better for the general issue of transition and NC as for subtopics like EN.
However, neither of the contributions delivers concrete estimations on how many years the single
measures of reforming state institutions, restructuring markets and redistribution of property rights
will last. This void is coarsely stuffed by Foley et al.,
56
who have established a time-scale and bar
graphs depicting the duration of major matters of change on the macro level.
< figure 3 about here >
To conclude the passage about nature and process of the transition process, critical voices shall not
be forsaken the opportunity to contribute to the discussion. Scholars like Aidis
57
and Gelb
58
find a
severe drawback of common transition stage models that the end of the process is either not
described at all or definitions are kept very vaguely, e.g. the modulation of the accomplishment of
transition to an "advanced market economy"
1.1.4 A stub of controverse on the possible endpoint of CEEC transition
When it comes to the temporal end point of transition, not all researchers are pessimistically
disposed. In fact, Dabrowski et al. deliberate that the transition from communism must be
completed because in expert circles, its course was being analysed like the one of a historical era.
However, Dabrowski et al. exclude explicitly the accomplishment of capitalist structures in CEEC,
but only the assortment into countries which probably catch up Western Europe in medium term
and those which dropped out of the convergence process.
59
Aidis goes as far to deliberate that since
all eight CEE members of the EU have installed this market system, the transition process is already
over.
60
However, it should be reflected here that Aidis is not serious to assume that the concerned
CEEC have tackled the transformation process en bloc, but that she rather used this overstated
formulation to underline that the solutions offered in literature are short-sighted and linked to
isolated variables like market structure of GDP growth which are torn out of the complex construct
55 R. Aidis and A. Sauka, 2006, Entrepreneurship changing environment, op. cit., p. 12.
56
P. Foley, J. Hutchinson, A. Kondej and J. Mueller, 1996, Economic development in Poland: a local
perspective, European Business Review, Bingley, UK, p. 25.
57 R. Aidis, 2005, Entrepreneurship - Transition Countries, op. cit. p. 3.
58
A. Gelb, 1999, The End of Transition?, chapter one in A. Brown, When is Transition Over?, W.E Upjohn
Institute for Employment Research, Kalamazoo, Michigan, pp. 39-40.
59
M. Dabrowski, S. Gomulka and J. Rostowski, 2000, Whence Reform? Critique Stiglitz, op. cit. p. 1.
60 R. Aidis, 2005, Entrepreneurship transition, op. cit. p. 39-40.
12
of economic, social and cultural transformation.
61
1.2 Economic and general conditions in late communist Poland and Ukraine, activity of
protest movements in the pre-transition period
In Poland, most people were not very fond of losing their independence once again after the three
Polish partitions. So, it was already in 1956 that workers protested in Pozna against the shortages
of provision with basic goods of everyday life. These riots were certainly not fruitful, but they can
be considered as starting point of the workers` protests on the shipyards of Gdask in 1970
62
and
the foundation of the Solidarity movement in 1980. Until the last date, the objective of the striking
groups was not to abolish the whole system, but to change it into a more liberal, market-orientated
one
63
. In fact, the preliminary conditions would have been relatively advantageous in Poland, since
the agricultural sector was never completely collectivized, i.e. most farmers remained proprietors of
their land in 1989, 76 % of he cultivable surface were exploited by some 2.7 million private
farms, which to over 90 % comprised less than 15 hectares of farmland
64
. Moreover, a small
private market survived also in communist times.
65
A powerful factor which made it difficult for the Polish communist party to install and maintain its
reign was firm and widespread Catholicism, a characteristic in people's belief system which not fit
satisfactorily with the atheist socialist world view. In 1979, the Polish got an organ which spread his
anticommunist posture all over the World Karol Wojtyla who became then pope John Paul II.
This clergymen hardly let anything unattempted to call his compatriots, but also people in other
communist countries to stand up against the regime
66
In fact, religion is a microculture which seems to exert a great influence on Poles in past and
present. That is why it should be interesting and probably fruitful for our examination of Poland's
transition towards capitalism to analyse how faith determines the development of certain branches
of the economy in special, but also the countrywide activity in total, for instance indirectly through
61 Van de Mortel, 2002, Institutions transition process, op. cit. p. 23.
62
N. Birnbaum, 2005, Remember Solidarity! Poland´s journey to democracy, open Democracy, London,
paragraphs 1 and 2, URL:
www.opendemocracy.net/democracy-protest/polish_democracy_2782.jsp
.
(02.25.2007)
63
A.
slund, 2002, Building Capitalism The Transformation of the Former Soviet Block, Cambridge
University Press, p. 52.
64
Cultural Dimensions Poland: Agriculture, URL: www.country-
studies.com/poland/agriculture.html
(03.16. 2007).
65
B. Sall, 1989, Private entreprises in Poland, The Foundation of Economic Education, The Freeman online
journal series, New York paragraph 4, URL:
www.theadvocates.org/freeman/8905sall.html
(10.12.2007).
66
P. Polaski, 2006, Pilgrimage of Dignity: Popo John Paul II`s June 1979 Visit to Poland, University of
Richmond, Virginia, US, p. 2.
13
work ethics, shop closing hours, attitude towards unemployment etc.
Yet, now the moment is apt to return to the display of the overall economic situation over almost
five decades of socialism:
Roughly put, the central planning commissions were eager to control he destiny of economic
progress in the largest scope possible. This is why they fixed prices, i.e. eliminated the free game of
market forces, and adapted wages constantly in order to equalize inflation. Socialist planners´ pride
and economic vision was a powerful industry with huge, autarkic combines which were thought to
profit from considerable EoS (Economies of Scale)
67
. The first Schumpeter hypothesis about
productivity and efficiency of companies function to large-scale production advantages
68
consequently hit these bureaucrats` taste exactly yet the disadvantage of huge factory
agglomerations like high transaction costs and x-inefficiencies did not diffuse in their economic
mind. Excessive stress of industry, esp. of branches which extracted natural resources or produced
unfinished goods,
69
is also translated by the method planning commissions calculated the national
income balance namely not taking into account all performances delivered by the economy, but
only industrial production and the attached services.
70
Other macroeconomic particularities for CMEA countries were huge gaps between nominal and real
incomes, rising inflation until hyperinflation in Poland and the Soviet Union and high foreign debts
due to bonds used both for investment and consumption. In Poland, these debts reached the number
of almost 41 billion US-dollars a high figure compared to the roughly 53 billions attributed to the
SU.
71
About anti-governmental protest movements in Ukraine corresponding macroeconomic data will
be treated in subchapter 1.6.2 the odds are to affirm that a strong wish for independence existed
in both parts of Ukraine yet, the eastern part was closer attached to Russia than the West of the
country, many Western Ukrainians speaking Russian. Unlike Poland, the cohorts of the population
missed who could have organized such a large-scale protest movement like Solidarity
72.
The question to be posed is whether it is adequate to speak of one Ukrainian national culture only or
the western and the eastern one, yet here the author dares to simplify reality a bit in order to cohere
to the NC concept and not be entangled in opaque regional diversity requiring more specific
67
A.
slund, 2002 Building Capitalism Transformation..., op. cit. p. 38.
68
A. Heertje, 2006, Schumpeter on the Economics of Innovation And the Development of Capitalism, Edward
Elgar publishing, Cheltenham, UK, p. 8.
69
C. Denizer, 1997, Stabilizaton, Adjustment and Growth Prospects in Transition Economies, The World Bank,
Washington D.C., Policy Research Department, Macroeconomics and Growth Division, p. 7.
70
A.
slund , 2001, Building Capitalism..., op. cit. p. 35.
71
ibid. pp. 48-49.
72
ibid. pp. 62-63.
14
knowledge to satisfy this matter of fact.
Why should one deal with events which are now over for 15 years and whose roots are set at the
end of World War II? Well, the answer could sound like this: These events are assumedly essential
to understand in what direction our selected countries will develop in the future and which cultural
factors have an effect on this way. An interesting question in this context is for instance whether the
general personal predisposition of Poles and Ukrainians has changed through 40 years of
communist leadership and the clash with Westerners` way of life without "quarantine" phase in
between.
What inferences does it have when state authorities order the population not to think freely and
when this reasoning is shifted to privacy, when basic human needs like free travelling and security
are not guaranteed by the authorities?
Before namely being able to determine the impact of national culture on visible econo-political
processes, it is desirable to have at least a vague concept of how this NC looks like in Pl and Uk.
1.3 The rapid breakdown of a decade-long morbid economic system Soviet trade shock of
1989 - 91
In the respect of starting conditions, the Soviet trade shock, which disturbed the economic structure
of former satellite states in non-conform ways, helps us to draw inferences on the general condition
of these countries by the beginning of the nineties.
Since in the calculations of the planning agencies foreign trade was treated as disruptive factor
73 74
and in consequence only little trade was effected with imperialist (CP propaganda jargon) Western
countries, CMEA members depended considerably on the Soviet Union as far as activities of
foreign trade in vital branches are concerned. For instance, Hungary exported 28% of its
engineering products to the Soviet Union in 1989 and Czechoslovakia 19% in 1988.
At the same time, Poland exported only 11 % of this category of goods to the USSR (Union of
Soviet Socialist Republics) in 1990 an indication of the fact that economic dependency to the
USSR was not identical with all associated nations.
75
73
S. Wennekers, R.A. Thurik, A. van Stel and N. Noorderhaven, 2007, Uncertainty Avoidance and the Rate of
Business Ownership Across 21 OECD Countries, 1976-2004, ERIM, Rotterdam, p. 5.
74
M.K. Goodrich, 1991, Soviet Union: Foreign Trade, Library of Congress: Country Studies - Soviet Union
(Former), Washington D.C., chapter 15, paragraph 1,
URL:
lcweb2.log.gov/cgi-bin/query/r?frd/ctsdy:@field(DOCID+su0391)Library of Congress Call Number:DK17
.S6396 1991,
website consulted on September 25th, 2007
75
Rodrick 1992, Soviet Trade Shock, op. cit. pp 2 and 36, table 1.2.
15
< table 3 about here >
In fact, apart of the issue that Poland with its population of 38 million people represented a huger
interior market than e.g. Hungary or the CSSR (Czechoslovak Socialist Republic), this country was
more than its brother states eager to be as independent from the "Big Brother" as possible. After all,
the anticommunist protest movement began as early as in 1956, was pursued in 1980 by the creation
of "solidarno" (solidarity) among Lech Walsa and ended successfully with the liberation and
democratisation of Poland.
76
In the course of the crisis suffered by the Soviet economy, the GDP in Pl and Uk fell remarkably
by almost 20 % cumulatively in 1990
77
. This negative shock on the aggregated production function
can be above all explained by three effects: the ToT (terms-of-trade) , the market loss - principally
caused by the introduction of the dollar pricing system and the chute of the transferable rouble into
meaninglessness - and the subsidy removal effect. The result of these phenomena was that products
from those countries even lost in value on Western markets, that purchasing agents in the USSR
bought less goods from its trade partners in eastern Europe and that production sites, which most
often were already in a lamentable state, could not maintain their production in conditions profitable
to a modest degree.
< table 4 about here >
In total, the loss of this negative shock which appeared in 1990/91 is estimated to reach 2.2 billion
$ in Poland. For Ukraine, the consequences of this economic collapse are less clearly discernible
because it did not play the role as satellite state, but was part of the Soviet Union itself. This is why
separate statistics on economic actions in Ukraine before the crumbling of the east block are only
difficultly reconstructible.
< table 5 about here >
1.4 Link between economic growth and uneven initial conditions among CEEC
In order to approach our countries of interest, Pl and Uk, the first step is to divide CEE countries in
the core country of Leninist communism, the FSU itself and the other CMEA members. De Melo et
al. state
78
that since the fall of the Iron Curtain, these two categories of centrally planned economies
have chosen fairly different paths of economic and political development. According to these
scholars, disparities in the transformation process can, however, at utmost partly be explained by
differences in history and economic situation prevailing around 1990, given that all post-socialist
76
N. Birnbaum, 2005, Remember Solidarity! ..., open Democracy, London, paragraph 6.
77
D. Rodrik, 1992, Soviet Trade Shock..., op. cit. p. 45.
78
M. de Melo, C. Denizer and A. Gelb, 1996, From Plan to Market: Patterns of Transition, The World Bank
Policy Research Department, Washington D.C. p. 25.
16
countries weathered the communist era in more or less the same intensity and duration, and last but
not least an disparate equipment by natural resources.
79
What economic phenomena are hidden between these key words, however, and how do they affect
the countries` efforts to become market economies according to the Western ideal?
Well, in terms of disparities in the economic mechanisms, it seems plausible to cite a.o.
macroeconomic distortions like repressed inflation and trade dependence between adjunct states and
the USSR.
In the field of history, the picture of how each single CEE state at the time of the overthrow of
190/91 was shaped by effects which are not directly part of economic actions, but which influenced
the framework of production and trade. For instance, the countries´ adhesion time to CMEA seems
to be a factor with a certain impact on the starting position of each single former COMECON
(Council for Mutual Economic Aid) member. The presumption in this case is that the longer a CEE
country was exposed to the principle of central planning and state ownership, the more run-down
and unproductive the economy is.
Though, according to a synopsis published by de Melo and Gelb, the span of years of CMEA
membership spreads from 41 (Poland) to 47 (Albania and FYR of Montenegro).
80
By evaluating the
arithmetic average of 43.8 and an estimated standard deviation S of 2.39 years, it becomes evident
that this parameter has a negligible influence on the economic starting situation of CEE countries.
Moreover, the sample contains CMEA members like the CSSR whose economy functioned fairly
well compared to other Warsaw Pact states and adhered to the eastern trade block nearly at the same
time as e.g. Poland whose economy suffered more and more severely from malfunctions. Thus, one
could argue that Polish employees expressed their dissatisfaction with the communist system partly
overtly through the solidarity movement, but also silently by doing work-to-rule and thus using the
economy as a "battlefield" on which the population fought communism.
81
So, one difference in the transition of Poland and the CSSR was that in the further country, firstly
the economy was morbid and secondly a strong popular movement counting about 10 million
adherents
82
claimed the abdication of the state apparatus and called for general, democratic
elections which took place in June 1989. The outcome of these growing resistance against
authoritative power was that Solidarity won the elections sovereignly and was allowed to form a
79 M. De Melo, C. Denizer, A. Gelb and S. Tenev,1997, Initial Conditions-Transition Economies, op. cit. p. 2
80 M. de Melo, C. Denizer and A. Gelb, 1997, Initial Conditions..., op. cit. table 2.
81 D.M. Nuti, 1981, The Polish Crisis: Economic Factors and Constraints, Socialist Register, Monmouth, UK, p. 124.
82
M.J. Rosenfeld, 2007, The Rise and Fall of Solidarity, Robert Morris University, Moon Township,
Pennsylvania, US, URL:
=
www.rmu.edu/OnTheMove/findoutmore.open_page?iPage=66804&it=&icalledby=umbraco&iattr
(11.01.2007)
17
coalition government which was presided by Tadeusz Mazowiecki as Prime Minister and Leszek
Balcerowicz, a famous economist, as Minister of Finance and even vice Premier.
83
The basis of
these early democratic governments was the so-called Balcerowicz Plan envisaging the re-erection
of Polish economy in direction to the system of liberal markets.
84
In the CSSR, the political leaders were old and tired of bearing the charge of political power over
their country, so the way to a peaceful political change was open and led to the "velvet revolution"
85
. So, in the CSSR, the end of communism was reached not by a huge protest movement, but above
all by comprehension of the communist leaders and student mass demonstrations in November
1989.
86
1.5 Gradualism versus Big Bang
As far as the reorganisation of macroeconomic conditions, e.g. the redistribution of property rights,
87
political leaders and above all economists were unanimous what tasks had to be initiated, and like
with the field of examination concerning number, content and interdependencies of phases of
transition in CEEC as well as institutional reaction thereon,
88
different theoretical concepts were
developed; yet, scholars split up in two camps in context to the problem how the existing misfits
should be cured.
89
Radicalists demanded that the old communist structures should be overcome as soon as possible
and desirably in one huge effort, the Big Bang also called shock therapy. Besides the reasoning
that without crucial variables like a hardened budget constraint have to be set up before the
economy is able to begin its trajectory towards market economy
90
, some representatives seemed to
fear that the former communist political and bureaucratic apparatus regained power in countries
which had experienced "hour zero". So, Balcerowicz
91
speaks of a "political window of
opportunity" in which firstly the ancient elites are weakened and secondly the population is
83
A. Åslund, 2002, Building Capitalism - The Transformation of the Former Soviet Block, Cambridge
University Press, p. 53.
84
Anonymous, 2007, Leszek Balcerowicz-«Plan
Balcerowicza»,URL
:balcerowicz.wirtualia.pl/planbalcerowicza.htm
, (03.23.2007).
85
ibid. p. 55.
86
T.G. Ash, 2002, The Polish Revolution: Solidarity, Yale University Press, New Haven, Conneticut, US, 3rd
edition.
87
E. Hanley and D.J. Treiman, 2003, Did the Transformation to Post-Communism in Eastern Europe Restore
Pre-Communist Property Relations?, CCPR, Los Angeles, US, p. 2.
88
P. Murrell, 2003, Institutions and Firms in Transition Economies, Kluwer Academics Press, New York, pp. 6-
9.
89
C. Wyplosz, 1999, Ten Years of Transformation..., op. cit. p. 9.
90 ibid. p. 10.
91
L. Balcerowicz, 1994, Understanding Postcommunist Transitions, Journal of Democracy, Washington D.C.
pp. 77-86.
18
prepared to suffer a preliminary worsening of their living situation in the hope of being
recompensed for the deprivations in a near radiant future.
On the other side, gradualists claim in general that it is not only sheerly impossible, but even
dangerous to attack the bunch of economic tasks precipitously. More detailed objections to fast
transformation are a.o. that caretakers do not set about the most urgent problems, but about those
who are solvable most easily and quickly.
92
Another argument are high economic and social
adjustment costs (capital demolition, uncontrolled unemployment, loss of trust in transformation
process among the population),
93
discrepancies between requirement of abilities in new jobs and the
qualification status of the existing workforce
94
, time distortions of measures like abolishing state
subsidies and undesired, difficultly rebalancable effects, e.g. galloping unemployment, and finally
political discomforts (the losers of economic transformation might form coalitions and block the
transition process).
95
96
< table 6 about here >
So far general statements of radicalists and gradualists on the speed of transformation.
Though, which direction did the persons in charge of Poland`s and Ukraine`s socio-economic fate
select for their country?
Poland is commonly placed in the category of Big Bang countries,
97
but this judgement is largely
undifferentiated because whereas Poland e.g. opened itself soon to market economy, installed a
democratic regime, its privatisation rate is regrettably slow.
98
After one decade of transition, a growing number of economists is no longer certain whether the
gap between Poland as past royal example of successful radicalist reforms and Hungary as
representative of successful gradualism is still remarkably wide. Experience rather teaches us that
both theories are converging because the speed of change is forcedly slowed down resp. speeded
up.
Like in Hungary, political leaders of Ukraine have opted for the gradualist approach of transition,
however it has been implemented in a fairly different and, as it is assumed here and there, faulty
way.
99
It namely turned out that not few members of the circles of power have an interest of the
92
D.M. Nuti and R. Portes, 1993, Central Europe: The way forward, Centre for Economic Policy Research.,
London, p. 12
93
M. Dewatripont, and G. Roland, 1992, Economic Reform and Dynamic Political Constraints, Review of
Economic Studies, Blackwell publishing, Boston, pp. 298.
94 P. Aghion and O.J. Blanchard, 1994, Speed of Transition - Central Europe, pp. 303-307
95
P. Murrell, 1991, ...Economic Reform of the Centrally Planned Economies, op. cit. pp. 9.
96
C. Wyplosz, 1999, Ten Years - Transformation..., op. cit. p. 12.
97
G. Kolodko, 2004, Transition to a market system: Gradualism versus Radicalism, TIGER working papers,
Warsaw, paragraph 1, URL:
10.2139/ssrn.590864
(11.12.2007).
98 ibid.
99
P.R. Gregory 1999, Ten Years of Transformation, Frankfurt Institute for Transformation Studies,
19
Ukrainian status quo to be conserved be it because they are corrupt, keen on preventing from
bankruptcy companies they are attached to whatsoever or because they favour the old communist
model of managing people and economy to be maintained. The practical consequences of such
egocentric or backward-turned attitudes are that cost-inefficient enterprises are released of tax
payment as compensation for the deletion of state subsidiaries or that companies who have unsold
goods on stock can sell these to the state as exchange for tax exemptions.
100
This practice implies
that companies are not forced to sack employees even if their marginal product of labour is beneath
their salary and that investment funds are not canalized towards the place of their most effective
production. Gaddy and Ickes created the expression virtual economy whose hallmarks are an
economy which creates negative social excess because production costs are superior to prices of
finished goods, a state who decides arbitrarily which company has to pay taxes and which not, thus
not just relieving itself from the allegation of corruption
101
and finally a country where one finds
too many reasons to progress only sluggishly in the reform process.
102
1.6 General socio-economic facts of Pl and Uk today compared to 1990/91
103
1.6.1 Balance sheet line of Poland´s evolution in economy and politics since the previous mid-
generational timespan passed
In order to understand why Pl and Uk have been living a different political and economic
development since 1991 Poland is a member of the European Union since May 2004, Ukraine not
yet and the annual GDP growth is also disparate with around 7% in 2006
104
resp. 2.6 % in 2005
105
- it should be examined what kind of starting conditions the countries had and how this status,
which was detained at the end of the era of Soviet socialism, determined economic growth, political
and juridical reforms and fostered the process of social and economic liberation and thus the basic
requirement to launch EI on quite a few levels.
Frankfurt/Oder, Germany, p. 11.
100
C. Gaddy and B. W. Ickes, 2002, Russia`s Virtual Economy, op. cit. p. 36.
101
A. Shleifer and R. Vishny. 1993, Corruption, NBER, Cambridge, Massachusetts, US, p. 3.
102
P.R. Gregory, 1999, Ten Years of Transformation, op. cit. p. 11.
103
M. de Melo, C. Denizer, A, Gelb and S. Tenev, 1997, Initial Conditions - Transition Economies, op. cit. p.
42.
104
Bureau of European and Eurasian Affairs, 2007, Background Note: Ukraine, U.S. Department of State,
Washington D.C., paragraph 4, URL:
www.state.gov/r/pa/ei/bgn/3211.htm
(03.16.2007).
105
World Bank, 2007, country official data, Country Brief 2007: Ukraine,
URL:
web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/UKRAINEEXTN/0,,menuPK:328543~pagePK:14
1132~piPK:141107~theSitePK:328533,00.html
(03.19.2007)
20
Almost 20 years after Mikhail Gorbatchev released the Poles into a future beyond central planning
and Soviet control in December 1988
106
, Polish economy has fairly well recovered - the more so
that in 1989 and 1990, the output had declined by 6 %. Compared to other CEE countries, Poland`s
GDP shrank only during 2 years and then changed the sign towards growth.
107
By 2000, annual
national yield has already reached 144 % of the level of 1990 the highest growth of all CEE
countries or 398 billion US-dollars compared to 232 as expression in absolute figures.
108
More
recent sources like country statistics of the OECD state the GDP with 483 billion dollars in 2004 at
a growth rate of 5 %. Converted in GDP per capita, the average individual wealth grew from $ 6030
in 1990 to $ 12650 in 2004.
Yet, there are also domains where present Poland finds itself in a worse position than in communist
times, e. g. the unemployment rate. Yet, after the breakdown of the socialist economist system, the
figures had to rise because the zero unemployment was artificial, so to speak state-decreed
109
with
low productivity (unsatisfactory marginal product of labour).
Since 1990, unemployment rose, reaching 14 %, slightly fell in the mid-nineties to reach a bottom
value of 10 % and rose in the new millennium to oscillate around 19% until today.
110
< table 7 about here >
Other important macroeconomic transformation figures:
exchange rates
In 2005 and the first half of 2006, the Polish Zloty gained in value towards the US-Dollar and the
Euro, the exchange rate being 3,23 resp. 3.10 PLN for one dollar and 4.03 resp. 3.90 PLN for one
Euro. In this respect, the revaluation of the Polish currency by effacing four zeros in 1995 seems to
have positively contributed to the purchasing power of the Zloty. According to data provided by
the European Central Bank for the Zloty rates between 1999 and 2007, the Polish currency
compared to the Euro oscillated between 3.4 in June 2001 and 4.9 in February 2004.
111
In close
connection to the strengthening of the national currency, the financial institutions of the country
managed to get the inflation rate, expressible through the customer price index (CPI), under control.
106
A. Åslund, 2002, Building Capitalism..., op. cit. p. 52.
107
World Bank, 2007, country official data: Poland Country Brief 2007,
URL:
www.worldbank.org.pl/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/POLANDEXT
N/0,,menuPK:304804~pagePK:141132~piPK:141107~theSitePK:304795,00.html
(03.19.2007).
108
World Bank, 2007, country data Poland, op. cit. Table 1.
109
J. Kornai, 1986, Contradictions and Dilemmas: Studies on the Socialist Economy and Society, MIT Press,
Cambridge, p. 126.
110
OECD country statistical profiles: Poland, 2006, URL:
stats.oecd.org/wbos/default.aspx?DatasetCode=CSP6
,
(03.10.2007).
111
European Central Bank, 2007, Statistical Data Warehouse, Exchange rates 1999-2006,
URL:
sdw.ecb.europa.eu/quickview.do?SERIES_KEY=120.EXR.A.PLN.EUR.SP00.A
, (03.2.2007).
21
At the beginning of the Soviet trade shock in 1989
112
, the CPI rose by astonishing 259.5 %
113 114
a
sign that the suppressed inflation of the previous decades could no longer be confined whereas the
present augmentation rates in the 21
st
century with 2000 as reference year rose by 3-5 %.
115
The
evolution of the CPI goes hand in hand with low inflation rates, the GDP deflator having decreased
from 7 % in 2000 to 3 % in 2004
116
and even to 2 % in 2005.
117
privatisation ratios
Profiting from a modest private market also in communist times and thanks to huge privatisation
efforts achieved by the Polish telecommunication and energy sector, the GDP share of the private
sector rose from 60 % in 1995 to 69.5 % in 2000, and the percentage of overall activity augmented
in the same period from 64 % to 73 %.
118
Switching to the situation of the Polish labour market, the ratio of self-employed people in relation
to the total number of active persons is particularly interesting for our study since the influence of
culture on the spirit of EN is part of our culturally-moulded observation of the transition of Pl and
Uk. According to statistics published by the OECD, the rate of SO (self-employment) as percentage
of the total civilian employment oscillated between 26 and 30 % from 1990 till 2004. This means
that the opening of the country to Western Europe obviously did not boost the number of start-ups,
which is strange considering the relatively high unemployment and the opportunity to reach self-
actualisation in the job a thing which had been impossible under communism. Causes for this
theoretically illogical individual behaviour shall be discussed in this last chapter of this thesis.
Political situation in Poland, state of reforms
At the beginning of the new millennium, i.e. from 2001 to 2005, a coalition of several parties took
over political power, out of which the SDL (Democratic Left Alliance) was the most powerful
group. Since November 2005, the country is governed by the conservative Law and Justice party
(PiS) presided by Lech Kaczyski
119
a long-lasting electoral campaign's outcome which was
surprising for political scientists as well for a major part of the Polish electorate.
112
D. Rodrik, 1992, Soviet Trade Shock - A Framework, op. cit. p. 1.
113
Economic Commission for Europe (ECE), 1991, European Bulletin for Europe,United Nations, New York,
pp. 224-226
114
Economic Commission for Europe (ECE), 1992, European Bulletin for Europe,United Nations, New York,
pp. 105-106
115
In the following years, consumer prices developed the following way: 105,4 in 2001, 108, 2 in 2003, 111,8 in
2004; OECD, 2006. country statistical profiles, op. cit.
116
OECD, 2006, country statistical profiles, op. cit.
117
K. Masojada-Chotowska, 2007, Poland: Commercial market review 2007, Knight Frank, department Poland,
Warszawa, p. 2
118
W. Quaisser and A. Reppegather, 2001, Polen, Osteuropa-Institut, Munich, pp. 5-9.
119
Government of Canada, 2007, About Poland, paragraph 3,
URL:
geo.international.gc.ca/canada-europa/poland/right_nav/about_poland_685-en.asp
(03.25.2007).
22
It is doubtful that this government will promote Poland´s promotion in the process of economic and
political transition and European Integration, given the president's aversion towards Europe in
general and Germany in special.
120
Unfortunately, the political guidelines seem to be profound, close-minded Catholicism and
nationalism and no liberal, pro-European spirit.
121
It is left to be researched if this legislature if no
second one follows only represents an insignificant slow-down of the transition process or a
serious threat.
Subsidies history and present situation
In many communist countries, the state had to grant generous financial support to factories and
agricultural exploitations so that food and commodities could be offered to the population at the low
prices which were guaranteed by the political leaders.
122
In Poland, this financial aid must have
been particularly important for the economic output since during the Soviet trade shock, the subsidy
removal effect was as high as 0.67 billion dollars.
123
Since Poland joined the European Union on May 1
st
, 2004, it has the right to receive subsidies,
mainly compensation and fallow ground payments in the agricultural sector and money versed
from EU structural funds in order to help Poland to reach the Objective 1 attributes, which mainly
should guarantee less developed regions of the EU to reach certain standards.
124
In the case of
Poland, the subsidies are above all allocated to recondition and extend the qualitatively and
quantitatively poor street, esp. motorway, network.
Although in Poland, lots of issues connected to infrastructure economic sectors etc. should be
promoted, it only received 4.2 % of the European Union´s overall regional aid expenditures, i.e.
about 4 billion Euro. Out of this sum, 1.5 billion Euro were spent on agriculture and rural
development. After all, financial support rose by almost 50 % in 2006 compared to 2004 (2.72
compared to 4.03 billion).
125
FDI
120
D. Crossland, 2006, Spiegel, 2006, Poland`s Hypersensitive Twins, Spiegel Online International, Berlin,
URL:
www.spiegel.de/international/0,1518,426197,00.html
(03.27.2007).
121
T. Kitlinski, P. Leszkowicz and J. Lockard, 2005, Poland´s Transition: From Communism to Fundamantalistic
Hetero-Sex, Bad subjects, paragraph 2,
URL:
bad.eserver.org/issues/2005/72/kitlinskileszkowiczlockard.html/view?searchterm=Kitlinski%20Poland%60s%20transiti
on
(05.12.2007).
122
J. M. Montias, 1962, Central Planning in Poland, Yale University Press, New Haven, Conneticut, US p. 251.
123
D. Rodrik, 1992, Soviet Trade Shock..., op. cit. p. 24.
124
Regionalpolitik Inforegio, 2007, Ziel 1: Unterstützung der Entwicklung der am wenigsten wohlhabenden
Regionen. European Commission, Brussels, paragraph 1,
URL:
ec.europa.eu/regional_policy/objective1/index_de.htm
(04.05.2007)
125
European Commission (Budget), 2006, Allocation of 2005 EU expenditure by Member State, Brussels, pp.
68-69, URL:
http://ec.europa.eu/budget/documents/revenue_expenditure_en.htm
(03.31.2007).
Details
- Seiten
- Erscheinungsform
- Originalausgabe
- Erscheinungsjahr
- 2008
- ISBN (eBook)
- 9783836612838
- DOI
- 10.3239/9783836612838
- Dateigröße
- 2.9 MB
- Sprache
- Englisch
- Institution / Hochschule
- Technische Universität Bergakademie Freiberg – Wirtschaftswissenschaften - Fakultät 6, Studiengang Betriebswirtschaftslehre
- Erscheinungsdatum
- 2008 (Mai)
- Note
- 1,7
- Schlagworte
- polen sozioökonomischer wandel wirtschaftsentwicklung europäische integration ukraine cross-cultural value national eastern europe countries entrepreneurship
