Challenges for democracy in post communist EU countries as a consequence of privatization of state enterprises

Krystyna Bobińska

Abstract


The attempt has been made in this paper to show the possibility that the totalitarian states may influence the democracy in other countries through the economic means. The analysis shows that enterprises from the totalitarian states, usually state owned but even if partly private, are always state-controlled. They pursue the political goals of the state, which are different than the goals of commercial enterprises acting in market economies. By pursuing the goals of the state, they receive the economic public support to accomplish their mission. Competing on the international market, they always win against the companies from the democratic states of market economies for the “state aid” is not available due to international and national regulations. The analysis is limited to the energy sector. The analysis is conducted in two spheres. The first is the possibility to take control by Russia over the energy supplies to Europe. The analysis shows that no cost criteria are taken into consideration in order to hurt economically and politically the post communist countries. The second is international investment expansion by China and other totalitarian states. It is demonstrated that its political system makes China more competitive as an investor in undeveloped countries ruled by different kinds of patrimonial regimes. These asymmetric conditions of competition put the democratic market economies in unfavorable position ending up with withdrawal.

Keywords


state controlled enterprises; asymetric competition; patrimonial regimes

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"Intellectual Economics" ISSN online 1822-8038 / ISSN print 1822-8011