Work detail

Invisible Industrial Policy in the Czech Republic

Author: Mgr. Eva Kreuzbergová
Year: 2003 - summer
Leaders: doc. Ing. Pavel Mertlík CSc.
Work type: Economic Policy
Language: Czech
Pages: 119
Awards and prizes: Karel Engliš Award by Charles University Rector for the best diploma thesis
M.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good masters diploma thesis
Abstract: The thesis reviews state interventions in the industrial sector realized through the transformation institutions, mainly the Consolidation Bank (later the Czech Consolidation Agency) that was converted into an instrument of indirect, selective bailouts. The aim is to show that the state practised rather extensive unofficial industrial policy during the economic transition as well as in later years that was based on ad hoc state aid in selected distressed companies. The extent, methods and causes of unobserved state involvement are analysed as well as the results of the interventions and consequences for the overall economic environment. Cases studies of several supported enterprises demonstrate that selected companies were in fact subsidized with significant amount of state resources to be kept afloat without conditioning the bailouts with restructuring measures, and its effect thus did not last for long. It is also argued that the non-transparent conditions and vague rules of state involvement opened potential for rent-seeking practices and influences of interest groups. The revitalisation program in late 1990s is described as an attempt to avoid ad hoc solutions and introduce a system into government policy towards significant industrial companies, however, the program was gradually suppressed and paralelly the asystemic interventions were still carried out. It is shown that the phenomenon of invisible involvement realized through the state institution is deep-rooted and even at present it still can be detected (even with its negative consequences) in dealing with bad assets accumulated in Czech Consolidation Agency.
Downloadable: Diploma Thesis - Kreuzbergová




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