Why does cronyism thrive so well in Czechia?

Czechia is second on the crony capitalism index compiled by The Economist, after Russia and just ahead of Malaysia, Singapore and Mexico. According to the paper, the Czech share of crony capitalism wealth is over 15 percent of GDP. I asked political scientist Jiří Pehe to explain why cronyism thrives so well in this country.

“There are several reasons for the rise of crony capitalism in the Czech Republic. The first was the way that the privatization process in the 1990s took place. It was basically done by the political elite in cooperation with selected economic actors who, as a result of this political protection, became very rich, very quickly and that created the foundations of this system.

“There was a chance that this could be changed when the Social Democratic Party took over in 1998, but then the party decided to sign the so-called “opposition treaty” with the Civic Democratic Party which had presided over the privatization process in the 1990s. And so all of these new economic actors who became very rich by having political cover were cemented in their positions.

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Author: Daniela Lazarová