Eastern European Capitalism in the Making.

By Elena A. Iankova. Cambridge: Cambridge University Press, 2002. 238p. $50.00.

Since Adam Przeworski's (1991) Democracy and the Market, scholars have stressed the need to involve society in postcommunist transformations. By engaging societies, this literature argues, governments facilitate difficult postcommunist economic transformations and build more socially accountable democracies (see also David Stark and Laszlo Bruszt, Postsocialist Pathways, 1998; Mitchell Orenstein, Out of the Red, 2001). Elena Iankova's book contributes to this argument through a close examination of “the institution of tripartism” in Poland and Bulgaria. While marred by occasional areas of ambiguity, the work provides a comprehensive and useful discussion of the postcommunist tripartite in both countries.

Iankova's broad claim is that preserving social peace and legitimizing and consolidating key social actors are “domestic necessities” for democratization and economic restructuring in postcommunist societies (p. 17). “The institution of tripartism” (p. 7) accomplished these tasks and thus played an important role in the Polish and Bulgarian transformations.

Iankova weaves a number of causal claims into this discussion. Tripartism served as a form of “temporary safety valve to prevent an explosion of social conflict” during a time of significant change. Successful tripartism built support for reform by, among other things, “fairly redistributing the burden” of economic reform; setting an acceptable minimum living standard and casting accompanying safety nets; consolidating the rules and norms of collective bargaining; and allowing meaningful worker and employer input into property transformation programs. By moderating and giving society a voice in painful change, tripartism thus reinforced the broader process of democratization. It kept important social actors at the table—providing an incentive for the identification and consolidation of interests, legitimizing their associational freedoms, and teaching rival groups the value and art of compromise (pp. 11–13).

The author's goal is to demonstrate these claims using a comparison of Polish and Bulgarian cases. The base of the comparison is variation along a number of factors—the most salient of which are legacies of state socialism and extrication and the degree to which key actors had a “strategic commitment” to social partnership (p. 19, but see the other variables discussed on p. 174). When commitment is low, as it generally has been under “right-leaning” local and national governments, social dialogue gets placed on the “slow track” (p. 113), resulting in higher levels of social tension.

At the risk of oversimplifying a complex story, Solidarity's long process of resistance to communism resulted in close ties between trade unions and parliament in 1989. With direct representation, there was little initial need for formal coordination of state–society institutions. In addition, Solidarity neoliberals like Polish Minister of Finance Leszek Balcerowicz had a low strategic commitment to the concept of social partnership. The neoliberals also felt that the government needed to avoid intervention below the national level. Finally, Solidarity's history of “ethical” rather than interest-based opposition to the regime delayed the crystallization of interest-based politics. These factors led to a diversified, informal tripartite negotiation process until 1993, when a committed “left” government negotiated the Enterprise Pact. This established an institutional mechanism for social dialogue in 1994.

The Bulgarian trajectory, by contrast, is rooted in a weak opposition to communism, a comparatively mild economic crisis, and the ability of party insiders to initially “manage” a controlled break with the old regime. These culminated in a subsequent polarization of the political system between opposition forces and the former communists. High levels of conflict, however, led to a more inclusive, broader, and more rapidly institutionalized tripartite coordination. Hence, while successive governments changed the face of the national tripartite between 1990 and 1993, there was greater continuity in substance that contributed to several early pacts on economic restructuring.

Iankova provides a detailed history of social dialogue through 2000, including detailed lists of tripartite mechanisms, the numbers of meetings, and the topics discussed. The effects of tripartism are harder to gauge, and here the book stumbles slightly. Although she dutifully records the numbers of strikes presumably wherever the data is available, it is not clear that she makes the case for her main claim that social peace aids in the development of markets and democracy. There is very little discussion of democratization in Bulgaria or Poland, and the discussion of each country's economic reforms and economic performance remains sketchy at best. Despite the author's assertion that property transformation was the source of greatest social tension in Central Europe (p. 14), there is only a peripheral focus on privatization.

In addition, many of the main economic breakthroughs in the 1990s—including the Enterprise Pact in Poland and the introduction of the currency board in Bulgaria—followed significant union unrest. Iankova could have focused more on these critical junctures and explained how the subsequent progress related to the absence or the restoration of tripartite bargaining.

Nevertheless, Iankova covers a lot of ground that has not been covered elsewhere, and Eastern European Capitalism in the Making is an important addition for specialists and research libraries. She makes a good case for the argument that postcommunist tripartism should be distinguished from Western variants. She also has an interesting discussion of the corporatist legacies of state socialism in Chapter 2 that centers on the concept of managing hypocrisy. In addition, there are case study–driven chapters on sectoral and regional tripartism to remind readers that not all politics occurs at the national level. There is also a useful appendix detailing the numerous changes in the Bulgarian tripartite from 1990 through 1993.

One contribution of particular interest is Iankova's excellent coverage of the role of international actors in promoting social dialogue. The International Monetary Fund, for example, has proven to be a strong supporter of tripartism in Bulgaria. It has made stabilization loans conditional on social peace between the government and its social partners. After the adoption of a currency board in 1997, the IMF set maximum limits on wages, linked wage increases to productivity, and sought out meetings with unions to justify its measures (pp. 85–86). Similarly, Poland's institutionalization of tripartism in 1994 followed an influential 1992–93 European Union Phare project. Later on, the accession process reinforced the importance of maintaining institutions for a social dialogue, even as those institutions came under pressure from the “right” government of Jerzy Buzek and Leszek Balcerowicz (pp. 121–22). International pressures have thus proven crucial to maintaining both countries' social dialogue in the face of low commitment.