CREATING A MARKET OF PROPERTY RIGHTS: THE CASE OF CZECHOSLOVAK PRIVATIZATION

Abstract

Year 2016 marked the 25^th anniversary of an introduction of the main measures of the Czechoslovak transformation process, which moved the country from a centrally planned economy towards a free market economy. Approach to the transformation varied among economists, who promoted two main ways of transformation – slow-paced gradualist approach and fast, decisive turn towards capitalism, which prevailed in the society. The paper sums up four main pillars of the Czechoslovak transformation: liberalization of prices and international commerce, macroeconomic stabilization and re-allocation of property rights. The focus is placed on a creation of a market with property rights through privatization and a restitution process. The last part of the paper describes macroeconomic development of transforming Central European countries and concludes that Czechoslovakia fared the best in inflation and unemployment while suffering not as deep drop in output as other countries.