This book provides a valuable analysis of the role of ideology in the development of mass privatization programs in postcommunist countries. Mass privatization was a unique program that defined postcommunist economic transitions in the 1990s and was adopted in numerous countries. Launched first in the Czech Republic in 1991, this innovative method of privatization was adopted in many other postcommunist countries. The rationale for mass privatization was simple: Since people did not have the money to buy state-owned enterprises, the state could give them away. To distribute ownership widely throughout the formerly expropriated population, the state would distribute shares in state-owned enterprises to millions of small shareholders in exchange for free or nearly free vouchers. Mass privatization would divest the state of thousands of state enterprises, while creating a broad-based class of shareholders after decades of communism.

Hilary Appel's study aims directly at the idealistic core of the mass privatization idea. The author argues with great clarity and originality that ideology accounted for a large role in the design and impact of the program. While her work makes this seem obvious, it should be remembered that throughout the 1990s, most economists and policymakers did their best to cloak mass privatization programs in well-grounded microeconomic theory. Doing so only revealed major gaps in applied microeconomics, for mass privatization proved a major disappointment. The program proved to be bad for the enterprises privatized by this method, bad for small investors, and bad for corporate governance economy-wide. After being promoted by the most brilliant minds in the modern economics profession and the leading international financial institutions (IFIs), mass privatization soon became a symbol of the hubris of market bolshevism. Today, mass privatization appears to be headed for the dustbin of history.

Appel's work provides new detail on the course of mass privatization in two leading cases—the Czech Republic and Russia—that later became templates for reform throughout the region. The author provides thorough and well-documented case studies of reform processes in these countries, as well as several theoretical chapters that parse important comparative arguments about the design of mass privatization programs and that draw on the experiences of Poland and Slovakia.

Appel's underlying argument is surprising and innovative: Despite enormous international enthusiasm and IFI support for mass privatization ideas, the actual design of these programs was determined almost entirely by domestic leaders, ideas, and debates. Appel devotes a full chapter to describing the extensive ideological, technical, and financial support that international financial institutions gave to the spreading of mass privatization ideas. However, her case studies show that despite this international activity, international organizations had very little impact on the design of mass privatization in either the Czech Republic or Russia. Ideas did not travel from international organizations to recipient countries on the backs of well-paid economic advisers, as some have suggested. Rather, such policy designs arose from purely domestic debates between officials and interest groups with strongly held ideological positions about the road to a capitalist economy. This conclusion is surprising within the context of a new literature on Central and Eastern Europe that emphasizes the influential role of the European Union and other international actors in socioeconomic policy.

A New Capitalist Order makes a major contribution to tracing the evolution of mass privatization ideas and debates among policymakers in the Czech Republic and Russia. In the Czech Republic, Appel shows how reform ideas emerged out of communist-era think tanks and dissident circles and then were debated between two major ideological camps after 1989: radical reformers grouped around Finance Minister Václav Klaus and gradualists led by Deputy Prime Minister Valtr Komárek. Appel chronicles the evolution of reform debates within the government and parliament and with business groups. She provides a very useful discussion of debates between the three leading designers of mass privatization in the Czech Republic: Klaus, Dušan Tříska, and Tomáš Ježek. The Russian chapter provides a sweeping review of domestic privatization debates, from the appointment of Yegor Gaidar and Anatoly Chubais in 1991 to the loans-for-shares scandal in 1995, the notorious program that enriched Russia's new oligarchs. In these debates, international organizations appear to matter not at all. Rather, the author argues that reform “grew out of its own domestic context and the specific actions of skilled and committed economic liberals” (p. 70).

Appel further argues that different ideological climates in the two countries affected the opportunity structure for material interests to express themselves. In particular, she explores the important question of why managers ended up with much greater power in the Russian privatization than in the Czech version. Her answer is that Czech managers had to contend with greater anticommunist sentiment that discouraged the pursuit of special privileges for former communist managers, while in Russia, managers were able to assert themselves to gain the lion's share of mass privatized assets. Ideology thus structures the ability of material interests to assert themselves.

While both of these arguments are provocative, the study has weaknesses in addressing alternative explanations. Appel makes a strong case for the importance of domestic over international influences in the spread of liberal reform ideas of mass privatization. However, the study provides little specific country-level evidence about international influences in domestic mass privatization debates. Case study chapters barely mention massive aid programs designed to support mass privatization legislative drafting and implementation. In the Russian case, for instance, it would have been interesting to see an assessment of the multimillion-dollar support for Chubais and his team by the U.S. Agency for International Development, since other accounts have suggested that this was critical to the liberals' authority in Boris Yeltsin's government. Similarly, there is sometimes insufficient attention to the role that material incentives and political power played in the calculations of reform leaders and interest groups.

Despite these issues, Appel's study of the role of ideology in mass privatization provides a crucial launching point for future debate. Its major contribution lies in drawing renewed attention to an increasingly forgotten policy of transition—mass privatization—that was once heralded as the keystone of the new economic order in postcommunist states. This study shows that explaining the design of such programs requires the challenging of prevailing views about the structural, material, and international determinants of postcommunist economic policy and points instead to the elusive power of ideas.