P21 - Socialist Systems and Transitional Economies: Planning, Coordination, and ReformReturn

Banks which underwent the privatization process in the Czech Republic, i.e. Česká Spořitelna, a.s., Československá Obchodní Banka, a.s., Investiční a Poštovní Banka, a.s., Komerční Banka, a.s., Živnostenská Banka, a.s., have been very widely discussed by both professional and lay public from several perspectives. Namely, what the actual economic condition of these banks was on the date of completion of the privatization, as well as the transfer of graded loans, or rather low-performing assets, which the state took over and reimbursed to the banks through consolidation institutions (hereinafter CI), and all this obviously in relation to the purchase price obtained within the scope of privatization. The aim of this article, within the possibilities stipulated by its scope, is: 1) To analyse the development of the banks' economic condition in the time interval of 1990-2010; 2) To identify factors that determine the volume of income from the sale of the state's investments in privatized banks; 3) To confirm or refute the hypothesis that the bank rescues before the completion of the privatization process were excessive; 4) To analyse the overall balance of the privatization process, or rather the efficiency of the sale of the banks; 5) To test the practical applicability of the economic theories connected to the issue in question. With regard to the above, the article is structured in the following manner. Firstly, literary research of articles on the theme of The Privatization Of Commercial Banking in reputable economic impact magazines is processed. This is followed by the actual economic analysis of the privatized banks in the Czech Republic, where economic parameters are examined in an interval of approximately 20 years - total assets, costs, revenue, profit, capital adequacy, etc. The conclusion firstly evaluates the development of the economic condition, then identifies factors that determine the volume of income from privatization, the excessiveness of the banks' rescue, the overall balance of the privatization process, and the practical applicability of the economic theories in question.

The transformation of centrally planned economy to a market economy has confi rmed that the basic premise for the economic policy, characterized by liberal market economy, is democratically established property rights. This text analyzes the National Economic effects of one of the most complex transformation processes, which is the process of privatization. This publication examines all three legal regimes through which were the entire privatization process implemented. These are "The Small Privatization" according to the Act no. 427/1990 Coll., "The Large-scale Privatization" according to the Act no. 92/1991 Coll. and "The privatization of agricultural and forestry property" according to the Act no. 229/1991 Coll. and the Act no. 95/1999 Coll., with respect to the: affected economic theories, theory of property rights in particular, transaction costs theory, theory of interested groups, rent-seeking theory, theory of government failure, etc.; macroeconomic analysis of the process itself; macroeconomic analysis of the use of the proceeds from the privatization process; evaluation of the National Economic effects, whether positive or negative, of the privatization process in the Czech Republic. The aim of this text is to provide professional and comprehensive overview of the National Economic effects of the privatization process as a whole, which has not been published until now by any author in view of the fact that the perception of the privatization process of the professionals and the general public has been narrowed to a process implemented by the National Property Fund and the Ministry of Finance (by selling shares through vouchers). Finally, the aim of this publication is to analyze the application of economic theories within the privatization process in the Czech Republic which describes the pros and cons of this unique economic and national economy "experiment".

In the paper we analyze economic university research and education in transition countries. University system differs from industry in the nature of output that it produces. University system is engaged in production of public goods rather than private goods. The sector also suffers from the measurement problem of quality of its output. We argue that because of these factors reforms were slower in this sector leading to low productivity growth. Pressure groups succeeded in gaining significant control inside administrative structures regulating the sector. By creating the accreditation commission the state decreases the communication cost of pressure groups making lobbing activity cheaper. A case study from the Czech Republic and Slovakia shows that the accreditation commission which is composed from representatives of state universities and established research institutes succeeded in maintaining their dominant position and set evaluation criteria fitting their interests. This institutional setting led to low university research productivity. The results also show that in Slovakia economic research is still predominantly carried out by central research institutes and universities are engaged mainly in teaching.

The introductory parts of the paper analyse development of a local variety of capitalism in Slovakia from the institutional and evolutionary perspective. In early transition period privatisation policies were aimed at development of a liberal version of capitalism, based on fluid capital markets. These policies were confronted with institutional legacies of previous regimes. Privatisation, however, had major impact on structure of capital ownership and management. Next chapters compare contemporary Slovak capitalism with varieties found in other OECD economies. Major elements of institutional framework (labour market, business and financial environments) are subject to factor analysis. OECD member countries are compared via index of market coordination. Slovakia appears to be a market economy with middle levels of strategic market coordination and similar to Austria, Hungary and the Czech Republic. Reliance on bank finance and dual economy are another distinctive features of the contemporary Slovak capitalism.

This paper examines Friedrich von Wieser's theory of the socialist or communist planned economy. It identifies in Wieser's Law of Power (1926) the abiding interests that stimulated his attempt to use Carl Menger's theory of subjective value to present a theory of socialism, first in Natural Value (1889) and later in Social Economics (1914). It discusses his conception of a unit of marginal utility, or "natural value," as the basic unit of economic calculation in his imputation theory and his use of that building block in his consequent theory of production and distribution in a socialist economy. Lastly, it argues that Wieser's theory attempts to socially objectify subjective values and is actually a return to a pre-Mengerian supply-side, real cost approach to the theory of value. Wieser's theory of economic calculation under socialism thus represents a failure to understand the radical contribution of Menger's value theory to the theory of exchange.

Badly defined institutional framework caused many problems of the Czech transition. Designers of the economic reform did not respect the importance of precisely functioning market institutions. No doubts that building institutions supports the functioning of markets. The article analyses why Czech economists and politicians did not understand the problem in the beginning and how they attempted to correct this initial mistake. The Czech (Slovak) economy was in a worse situation if compared with other central European countries because any private sector did not exist there before 1990. Both formal and informal institutions were built here in the green field. After politically sensitive problems with financial crime the building of institutions was accelerated in late 1990s. The process of re-building Czech market institutions continues within EU now.

Czech economic thought during the 1948 - 1969 was full of sudden turns. Its development was determined by political conditions and spiritual climate that were result of Stalinist soviet type socialism. During the first half of the 1950s the plurality of economic ideas was substituted by the Stalinist version of marxist-leninist political economy using violent methods. Low efficiency of the command system and emerging reform climate in the USSR under N. S. Khrushchev opened the door to the reform thinking of the second half of 1950s and the 1960s in Czechoslovakia. During the 1960s the development of the reform thinking together with renaissance of the theoretical economic thinking culminated in the economic reform of Otto Šik and his team, and democratization process of the Prague Spring of 1968. Promising developments ended as a consequence of the Warsaw Treaty troops invasion in August 1968.

The paper investigates individual wage determinants in context of classic human capital methodology. Paper tries to confront economic assumptions with empirical findings for the Czech Republic and presents that in view of labour market during late-transition period. Czech labour force is relatively well educated and trained, price of labour is low to be competitive to developed economies. Education of employee plays very important role in wage determination and there are significant increase in returns to human capital during all transition process. But working in some occupation has major individual intensity of influence on wage level than level of education. Education and occupation are strongly correlated each other but nevertheless occupation plays major role in wage determination process. Comparing other results with hypothesis, paper concludes that main assumptions are confirmed by derived findings. Paper supports that wage-age profile, regional differences or gender wage gap are becoming similar to other developed countries.

Since the start of economic transformation, the Czech Republic has been viewed as the country enjoying the best starting position and the best results as regards its economic level and its macroeconomic stabilization, but also as a country where the institutional framework is less adapted to supplying the needs of a market economy than Hungarian or Polish institutional framework. The fact that prior to accession the Czech Republic will have to implement Community directives and other relevant Community acts in its national legislation and that on accession it will be subject not only to Community primary law, but also to secondary legislation (e.g. especially regulations), is of fundamental benefit, even though it cannot be quantified.