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Business-Government Relations in EU-Acceding Countries: Towards a ...
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Topic: Government & Business
Sort Desciption: configurations of business-government relations at the EU level and the domestic ... of the Europeanization of the business-government relationship as a ...
Content Inside: 1 EUSA Tenth Biennial International Conference Montreal Canada May 17-May 19 2007 Business-Government Relations in EU-Acceding Countries: Towards a Model of Institutional Change Dr. Elena A. Iankova Lecturer in International Business The Johnson School at Cornell University Ithaca NY 14853 Tel. (607) 237 0314 Email: EAI1@cornell.edu 2 EU Accession and the Changing Business-Government Relationship in Post- Communist Europe The introduction of state ownership during communist rule fundamentally blurred the organizational boundaries between government and business. The state became the sole employer private employers were non-existent while the business function of state enterprises was highly politicized. The latter were controlled by the party-state through central planning and the nomenklatura system of recruitment and appointments. Central plan meant direct bureaucratic management of the economy by institutions of the state. The central plan rather than market mechanisms designated what enterprises should produce and at what cost. It further designated the suppliers and customers for enterprises the general framework for pay scales and terms of employment. Investment was provided primarily by the state which in turn had the right to income earned by enterprises and organizations under its ownership. The abundance of administrative orders for sales marketing and distribution resulted in lack of initiative and entrepreneurship. Competition was considered wasteful and unnecessary in a system of soft budget constraints (Kornai 1980; 1992). 1 Managers were thus not decision makers but only implementers of decisions taken at higher political levelthe main function of enterprise directors was the fulfillment of plan targets. Through the nomenklatura system managers were appointed on the basis of political not professional criteria. The total party control over enterprises and the economy was further secured by the appointment of party secretaries in all ...
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