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State, Labor, and the Transition to a Market Economy

Egypt, Poland, Mexico, and the Czech Republic

By Agnieszka Paczyńska

Publication Year: 2012

In response to mounting debt crises and macroeconomic instability in the 1980s, many countries in the developing world adopted neoliberal policies promoting the unfettered play of market forces and deregulation of the economy and attempted large-scale structural adjustment, including the privatization of public-sector industries. How much influence did various societal groups have on this transition to a market economy, and what explains the variances in interest-group influence across countries? In this book, Agnieszka Paczyńska explores these questions by studying the role of organized labor in the transition process in four countries in different regions—the Czech Republic and Poland in eastern Europe, Egypt in the Middle East, and Mexico in Latin America. In Egypt and Poland, she shows, labor had substantial influence on the process, whereas in the Czech Republic and Mexico it did not. Her explanation highlights the complex relationship between institutional structures and the “critical junctures” provided by economic crises, revealing that the ability of groups like organized labor to wield influence on reform efforts depends to a great extent on not only their current resources (such as financial autonomy and legal prerogatives) but also the historical legacies of their past ties to the state.

Published by: Penn State University Press


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pp. 1-4

Copyright Page

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p. iv-iv

Table of Contents

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p. vii-vii

List of Tables

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p. ix-ix

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pp. xi-xiii

The idea for what eventually became this book first came about in the early 1990s in Cairo during a lecture by a World Bank official. He compared Egypt’s economic reform program to the one that Poland was implementing at the time, and in particular the debt-forgiveness deal both countries made with their international creditors. This unlikely comparison intrigued me and would ...

List of Acronyms

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p. xv-xv

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pp. 1-20

In the 1980s, sharp increases in foreign debt and severe macroeconomic instability combined to produce urgent economic crises throughout the devel-oping world. Drawing on newly influential economic analyses that identifiedstate intervention as the primary culprit, reform programs sought to confinethe state to a minimal regulatory role while permitting unrestrained market...

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Chapter 1: Parties, Unions, and Economic Reforms

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pp. 21-38

As we saw in the Introduction, the ways in which organized labor reacted to changes associated with structural adjustment—and, more important, whether it succeeded in influencing the shape of privatization policies—differed markedly in Poland, Egypt, Mexico, and the Czech Republic. As we have also seen, the extant literature, while providing many important insights into the dynamics ...

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Chapter 2: Ruling Parties, Organized Labor, and Transitions to Democracy: Poland and Czechoslovakia

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pp. 39-82

When the Polish and Czechoslovak governments initiated economic reforms following the fall of Communism, they encountered very different labor organizations. Polish unions, as will be examined in Chapter 4, emerged as influential actors and significantly shaped the process of privatization design and implementation. Unions in Czechoslovakia, however, were unable to play such a ...

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Chapter 3: Ruling Parties, Organized Labor, and Continued Authoritarianism: Egypt and Mexico

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pp. 83-128

Unlike Poland and Czechoslovakia, neither Egypt nor Mexico experienced a political transition as it initiated economic reforms. As we will see in the chapters that follow, the persistence of authoritarianism in these two latter cases shaped the strategies that organized labor used to influence public sector reform policies. The effectiveness of the strategies, however, was shaped more by the legacies of ...

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Chapter 4: Labor and Privatization in Poland

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pp. 129-161

The Roundtable discussions that took place in 1989 between opposition forces and General Jaruzelski’s Communist regime laid the foundation for a transition to democracy and market economy. Although the displacement of the Communist ruling elite was not the intended goal of the agreement, the first partially free elections made clear that Polish United Workers Party’s (pzpr’s) ...

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Chapter 5: Labor and Privatization in Egypt

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pp. 163-189

In 1991, unable to resolve the persistent economic crisis and with the patience of its international creditors waning, Egypt began reforming its economy. The first phase of the program focused on stabilization, including unifying the exchange rate, liberalizing the banking system and the financial sector, bringing the budget deficit under control, and lowering inflation. The second phase of ...

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Chapter 6: Labor and Privatization in the Czech Republic and Mexico

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pp. 191-220

Like Poland and Egypt, Mexico and the Czech Republic embarked on a fundamental restructuring of their economies. Mexico initiated reforms in 1982 in response to a profound economic crisis. The Czech Republic began its transition to a market economy in the 1990s following the fall of the Communist government. In both, the restructuring and privatization of the public sector was ...

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pp. 221-234

Beginning in the 1980s, numerous countries across the developing and post- Communist world began the difficult process of reforming their economies, moving away from state-led development models toward a greater reliance on market mechanisms. Advocates of economic restructuring identified state intervention in the economy as the main cause of low productivity, inefficiencies, ...

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Epilogue: The Uprising of 2011

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pp. 235-241

In December 2010, a wave of protests swept through Tunisia, fueled by anger at the self-immolation of a young street vendor, Mohamed Bouazizi. Soon the protests spread to other countries in the region. In Tunisia and Egypt the uprisings succeeded in deposing the countries’ presidents, Ben Ali and Mubarak, respectively. There the military was unwilling to back the countries’ rulers and ...


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pp. 243-263


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pp. 265-276


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p. 294-294

E-ISBN-13: 9780271061207
Print-ISBN-13: 9780271034379
Print-ISBN-10: 0271034378

Page Count: 288
Publication Year: 2012

Edition: Second Edition