Thereafter, Poland and the Czech Republic were required to provide evidence concerning their compliance with the requirement to improve their commitment to environmental standards as well (Medvec 2009). Both Poland and the Czech Republic were successful in satisfying the EU's leadership of their commitment to full integration by providing evidence of their commitment to improving their track record on environmental issues and achieved membership in the EU in 2004; in fact, the Czech Republic even assumed the presidency of the EU in 2009 (Medvec 2009). Both Poland and the Czech Republic have also become more fully integrated into the EU in other ways as well, including a transition from their former status as members of the Soviet Union's Warsaw Pact to become members in the North Atlantic Treaty Organization in 1999 (Medvec 2009). Despite these achievements, both Poland and the Czech Republic are still confronted with a number of constraints to their continuing economic development and disparities in income levels became even more pronounced in these two countries during the transition period from 1990 to 2000 (Mcintyre 2001).

3.

Objectives of the Study

The main objective of this study is to demonstrate the fundamental importance of Europeanization on environmental policy-making development in both the Czech Republic and Poland in tandem with other economic policymaking initiatives that have focused on the environment as a top priority in their transformation and the reasons for these initiatives. To achieve this objective, the study provides an analysis concerning how, in their capacity as some of the most flagrant polluters in Eastern Europe, the Czech Republic and Poland changed their policy-making processes and how these changes contributed to improvements in environmental quality with a specific focus on air pollution in the region. By researching journals, articles, policies and media pieces from each time period of analysis, this study provides valuable new insights into the political, economic and social changes that have taken place in Eastern Europe during the transition period from 1990 to 2000 and how they have impacted the EU and new members' integration into a rapidly growing global economy.

4.

Hypothesis and Research Questions

The study was guided by the hypothesis that based on their respective geopolitical and economic importance to the rest of Europe, the countries of Poland and the Czech Republic have been transformed from two of the most prolific polluters in Eastern Europe in the pre-1989 era to emerge in the 21st century as solid examples of what can be done to reverse the process when environmental considerations are made a high priority and policymakers accept the responsibility for achieving progress in reducing the impact of their nation's industries on the environment. Indeed, both Poland and the Czech Republic have been highly successful in reducing their air pollution emissions in recent years for these reasons and the others discussed in the introduction. Because much of the progress by both countries was achieved during the difficult transition years of 1990 to 2000 with the dual goal of improving the health conditions for their nations' citizenry as well as facilitating their integration into the European Union and international community, this success is all the more remarkable. Based on the foregoing, the research questions that guided this study relate to the effects of radical economic reforms, policy and EU influence that initiated such environmental policies in these two countries as follows

1. How did selected critical policy, economic and institutional factors such as rising incomes (e.g., GDP per capita), regulatory structure (i.e., environmental expenditures to GDP) and the structure of the respective country's economy (i.e., index of small-scale privatization) relate to improvement in the indicators of air quality such as CO2, SO2 and solid particulate levels?

2. Why did market economy...

What was the influence of accession in the European Union in facilitating improvements in environmental standards in Poland and the Czech Republic? To answer this research question, an assessment concerning the importance of EU membership and integration as a principal change driver for policy integration and compliance with EU standards is provided, as well as what EU environmental investment funds incentives (i.e., PHARE) have encouraged compliance and enforcement regimens in Poland and the Czech Republic to date.
CHAPTER 2

THEORETICAL FRAMEWORK

Introduction

The EU enlargement process includes embracing of the free-market system has had some very deep political, social and environmental consequences for these former Communist states. This chapter will review theories on European integration and internationalization and how they are related to the objective of this study.

Economic Reform, Investment and Psychic Distance

It is clear that market forces have played a major role in many of the sweeping changes, including significantly improved environmental standards, that have been implemented by Poland and the Czech Republic in an effort to become more fully integrated with the European Union. Indeed, the Czech Republic and Poland were the very first former Eastern Bloc countries to implement economic reforms in an effort to become fully integrated into the EU (Hassan, Haque & Lawrence, 2006). These economic reforms contributed to the accession of these two countries to the EU, of course, but they also helped to diminish the so-called psychic distances between Poland and the Czech Republic and the other member states of the EU. In this regard, the process of internationalization involves dealing with various additional costs of conducting business in other countries, but companies with managers who have learned through previous experience with other countries, the costs associated with internationalization are reduced (Cuervo-Cazurra, 2006).

The theoretical framework of the incremental internationalization process or Uppsala model can be used to better understand the selection of countries in which to internationalize based on the notion of how much "psychic distance" exists between the different countries involved (Cuervo-Cazurra, 2006). In this regard, Armario, Ruiz and Armario (2008) report that to the extent that companies enjoy the benefit of solid information and experience with other countries will likely be the extent to which the psychic distance between them is reduced. According to Cuero-Cazurra, "Psychic distance is the difference between countries in terms of language, culture, education, business practices, industrial development, and regulations, all of which may limit the transfer of information. This distance reduces the ability of the firm, and particularly of its managers, to understand foreign information" (p. 807). The Uppsala and like-minded frameworks depict the process of internationalization as being a learning process wherein the knowledge required for future initiatives is obtained through a sequential series of international decisions (Armario et al., 2008). The more alike that countries are in terms of a wide of a cultural dimensions such as those articulated by Geert Hofstede and other sociologists will be the extent to which investments flow between them and the process of internationalization will be accelerated. As Armario and her associates emphasize, "Internationalization is thus perceived as an evolutionary process in which companies develop growing levels of commitment to foreign markets as they travel through a series of sequential steps and accumulate decisions" (p. 486).

As can be seen in Figures 1 below, there is a high level of congruence between the cultural dimensions developed by Hofstede (2009) for Poland and the Czech Republic (see definitions of these cultural dimensions at Appendix a). There is also a high level of congruence between these cultural dimensions for Poland and the Czech Republic with other major members of the EU such as Germany and France as shown in Figures 2 and 3 below (Poland's cultural dimensions are used as a basis for comparison based on the similarities with the Czech Republic).

Figure 1. Comparison of Cultural Dimensions of Poland and the Czech Republic

Source: Hofstede, 2009

Figures 2 and 3. Comparison of Cultural Dimensions of Poland with France and Germany

Key:

Power Distance Index

Individualism

MAS

Masculinity

UAI

Uncertainty Avoidance Index

LTO

Long-Term Orientation

Source: Hofstede, 2009

As can be readily seen