Divide and Pacify: Strategic Social Policies and Political Protests in Post-Communist Democracies

2. The Unexpected Peacefulness of Transitions

CHAPTER 2 The Unexpected Peacefulness of Transitions “The East has become the South.” Adam Przeworski (1991, 191) Deep economic reforms, however urgent, often have short and turbulent life spans. During the 1970s and 1980s, a large number of countries in Latin America and the developing world experienced repeated waves of protests, strikes, riots, and casualties in reaction to socially costly austerity policies. By many yardsticks, the emerging democracies of Central and Eastern Europe found themselves in similar conditions shortly after 1989. Expanding protest opportunities combined with higher-thanexpected social costs in the form of generally increasing poverty rates and unemployment levels, and falling real wages, real incomes, and output levels. Not surprisingly therefore, a number of observers feared that the early 1990s in this region were likely to involve similar scenarios of disruption in the polity because of large-scale protests. This chapter revisits earlier findings on post-communist protests, notably by Greskovits (1997; 1998) and Ekiert and Kubik (1998b; 1999). I also present a new set of indicators of industrial action in six Central and Eastern European countries between 1990 and 1995. I compare these with six countries from the three worlds of advanced welfare capitalism and with four Latin American democracies during the 1980s. Post-communist transitions, it turns out, have actually been surprisingly quiescent. 2.1. Social costs and early breakdown prophesies Post-communist transitions were characterized by a reduced scope for government intervention, the hardening of budget constraints, the partial dismantling of communist firms and social benefits, and “great contrac- 10 Divide and Pacify tions” of economic output similar only to the Great Depression.1 The initial social costs that accompanied these reforms have been higher and longer-lasting than originally expected, although the Czech Republic is an exception in some ways. Compared to 1989 levels, average real income per capita was down by 12 percent in Poland by 1993, by 13 percent in Hungary, and by 18 percent in the Czech Republic. Real wages were down by 12 percent in Hungary by 1991, by a quarter in Poland, and by over thirty percent in the Czech Republic. In subsequent years, real wages recovered in the Czech Republic, while remaining stable in Poland and further eroding in Hungary.2 Given the evident need to liberalize and privatize the economy, many East European citizens had expected , and a handful of politicians had predicted, that economic reforms would initially “make things worse before making them better” (Przeworski , 1991; 1993). Yet reform losers could still be forgiven for becoming increasingly disaffected with reforms, given that even the prior expectations of economic experts turned out to have been overly optimistic. As one World Bank economist acknowledged, “nobody expected such massive drops in outputs and incomes.”3 Combined with cuts in social expenditures and in subsidies for basic goods, these transitional costs hit citizens who had been accustomed to extensive social protection. This made for a potentially explosive cocktail . As Greskovits (1998) and others have shown, in the decades preceding the post-communist transitions in Europe, socially costly reforms in Latin America and the developing world were frequently accompanied by large-scale disruption in the form of prolonged strikes, riots, looting, violence, and casualties. Between 1976 and 1989, altogether 85 mass waves of austerity protests occurred in 26 countries across Latin America, Asia and Africa.4 According to Walton, in this period “half the countries of Latin America had experienced a singular and unprecedented wave of social unrest in response to domestic policies of their governments for dealing with a redoubling of foreign debt.”5 Among the countries that experienced austerity riots were some where democratic reforms and market reforms were undertaken simultaneously, such as in Argentina, Brazil, Ecuador, Mexico and Nicaragua. In most instances, the protesters demanded measures to soften the hardship inflicted by austerity policies, through lower prices, restored subsidies, compensatory wage increases, and more or better-protected jobs.6 On many occasions, reform protests turned violent in the extreme. Between 1976 and 1984, at least seven protests against basic commodity The Unexpected Peacefulness of Transitions 11 price hikes resulted in more than thirty casualties, and at least forty protests in up to ten casualties (Bienen and Gersovitz, 1986, 29–36, 44). The latter cases included both relatively stable democracies (such as Costa Rica and Venezuela) and democratizing countries (such as Mexico). In later years as well, some of the bloodiest riots occurred in democracies, often with...