At the same time, as compared to Ukraine, in Poland "the hard budget constraint on state enterprises, together with sufficient standards of corporate governance" were the main governmental instruments to avoid a "large-scale asset stripping before privatization"
. This was one of the key reasons for which the economic rebound started quite early for Poland, as compared to Ukraine. The privatization process did not take the chaotic characteristics it had in Ukraine, where the state assets were often simply divided between groups of interests and individuals close to the decision factors and power leverages. The rational privatization process in Poland meant that many of these assets, still functional, could be used to resume economic growth. Further along, the fact that there was a rational privatization of these assets meant that the direct foreign investment could gradually start during the early 1990s.
There was another explanation for the economic evolution in Poland during the transition period as compared to that of Ukraine. The Polish governments during the 1990s promoted an environment in which the small and medium-size enterprises (SME) could develop. Any economic theory will argue that this is the sector of a national economy that best supports a sustainable market economy. In Poland, the fact that this SME segment was encouraged by the government and supported with the appropriate legislative and executive actions also meant that the enterprises inherited from the Communist period would have an important competitor on the market. None of these actually occurred in Ukraine or, whenever they did, it was an isolated act rather than a generalized, governmentally-supported approach.
One final element worth referring to with regard to the economic aspect of state building and to the role of the government refers to the fiscal reforms and, more notably, the pension reform in Poland, a key element to ensure that one of the most vulnerable categories, the elderly, could be somewhat cushioned against the effects of the economic transition. With a rational division of the pensions in different tiers, the Polish governments implemented fiscal and pension reforms during the early 1990s, while in Ukraine, the comprehensive pension reform only started around 2005 and has been stalled for the last years.
Civil society, along with political society and economic society, previously mentioned, is the third of the five interconnecting "arenas of democratization," as Juan Linz and Alfred Stepan have labeled them
. The role of the civil society is significant, especially in the early phases of post-Communist state building, both in terms of aiding the government in the institution and societal changes that need to be implemented, and also of providing the appropriate feedback and control mechanism as to how these reforms are being implemented.
In Poland, the civil society and its activism had been one of the direct causes of the fall of the Communist regime, starting with the Solidarity movement in the early 1980s. The tradition of an active civil society became even more obvious after the fall of the Communist regime, when, from 1989 to 1996, data reported a significant increase in the number of civil society organizations
. In 2003, there were 24,000 civil society associations and foundations in Poland
In Ukraine, this process was significantly slower than in Poland and it had different characteristics as well. Sources report around 28,000 NGOs in Ukraine in 2000
, but one has to consider that the population and size of Ukraine is significantly greater than the one in Poland. The other important issue was that an important part of these NGOs were either supported and financed by the Government or, in other cases, the government coordinated the NGO activity. This drastically reduced the capacity of these NGOs to act according to their monitoring objective.
There are probably other factors associated with the smaller influence of civil society on the shaping of post-Communist society in Ukraine as compared to that in Poland. Despite several arguments against this statement, the civil society in Ukraine did not have a tradition in this sense. The one in Poland...
The existence of a democratic tradition that supported a liberal and vibrant civil society was very important in Poland in the state building process and the post-Communist government used additional instruments to stimulate such a process, without interfering with the activity of these civil society groups.
Additionally, the Polish civil society was also more exposed to the positive influence of the Western civilization, where civil society had developed for a much longer period of time. The integration of the country in the Euro-Atlantic space and institutional framework also included the civil society and Polish NGOs, so that the Western world had all the interest to commit to training and shaping these organizations in Poland. In Ukraine, this was much less the case and, overall, it is safe to emphasize that the civil society in Poland, as is the case with some of the other segments discussed here, had a slow start and an influenced continuation.
The state building process was different in Poland and Ukraine, with different objectives and different results in the transition period, especially during the 1990s. This paper has aimed to analyze this assertion on three different levels: the political level, the economic level and the civil society level. In all these areas, the conclusions are similar.
First of all, the approach was well thought strategically in Poland, with clear objectives and plans of actions by which these could be reached. The fact that the political society and economic environment needed to be changed was an observation with which all or most of the political class agreed, which meant that there was a certain degree of political consensus from that point-of-view. There was also an agreement, in the first years after 1990, on how these are going to be reformed and the decision factors agreed on quick, despite sometimes painful measures, by which the economy could be transformed and made adaptable to the new market economy, as well as more competitive on the international market.
None of these happened in Ukraine, where change was very slow, with the government taking different ineffective measures to protect the population. While in Poland, the pension system was reformed to cushion the elderly population against the changes that would need to be made, in Ukraine this process started slowly only in 2005, which meant that during the 1990s, many of the underprivileged citizens found themselves facing the financial burden of a painful transition.
The transition, both political and economical, in Poland was also rational, as compared to the one in Ukraine, and the governmental decision factors, as well as the civil society, have the greatest merits for this. The fact that it was a rational transformation is seen in the way the former Communist assets were used and privatized so that they could still be efficient, with investments, in the new market economy. In Ukraine, the privatization process simply meant, in many cases, that these Communist assets were stripped of their value or delivered into the hands of different power players in the country.
This brings the conclusions to another important observation: a higher degree of transparency in Poland was also helpful in ensuring that the implemented measures could be checked and that a powerful control and feedback mechanism was in place in order to facilitate the implementation of all these measures. In Ukraine, during the 1990s, a group of obscure interests and power breakers were the ones that were actually doing all the deals and leading, in fact, the transition effort. At the same time, the government was encouraging such practices rather than taking the appropriate measures to reduce them. In Poland, a transparent governmental authority acted towards the best interest of the citizens who had voted it to power.
Some of the challenges that Ukraine faced were inherently much greater than those in Poland, especially in the political segment. In Ukraine, most of the institutions, as well as the relations between those institutions and the overall institutional framework, needed to be created. They did not exist previously, with Ukraine part of the Soviet Union. However, in Poland, many of the institutions from the Communist period could be used as the foundation for the new institutions. Even more so, the democratic tradition in Poland, dating back to the period between the two wars, meant that the Polish society already had the democratic tradition necessary for the successful…
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