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The impact of the EU on governance reforms in post-communist Europe: a comparison between first and second-wave candidates.

1. Introduction

Transition from communism to capitalism had an uneven development. A short glimpse at some institutional and economic indicators (e.g. from World Bank, the EBRD etc.) at the end of the 1990s reveals a more or less clear variation between "first-wave" and "second wave" EU candidate countries. The former, also labeled as the "Luxembourg group" (Czech Repub-lic, Estonia, Hungary, Slovenia, Poland) started accession negotiations two years earlier be-cause they were in general more advanced than the latter, the less developed "Helsinki group"(Bulgaria, Latvia, Lithuania, Slovak Republic, Romania) (2). Why did the Luxembourg group until recently have for many years a higher institutional (governance) quality than the Helsinki group? What explains variation in governance quality among post-communist transition countries and what explains the recent catch-up of the laggards?

Several authors try to explain variation by emphasizing the difference in historical and institutional legacies. They point to the incompatibility of Western-type institutions with pre-communist institutions and claim that this incompatibility increases transaction costs and makes the enforcement of the new laws more difficult, resulting in a slower institutional change (3). Their argument is basically that the German or Habsburg legacy is more beneficial for economic and institutional performance than the legacies of the Ottoman or Russian Empires. It is, however, hard to prove such claims because it is difficult to tell whether pre-communist legacies persisted, especially when we additionally consider communist legacy (4) or post-communist developments. Because institutional quality is a complex and interrelated process, monocausal explanations which focus only on historical legacies and ignore the recent history or future developments are not sufficient to provide the answer. The recent catch-up of the less advanced Helsinki group (which had the "less beneficial", mainly Russian or Ottoman historical legacy) speaks clearly for the importance of recent factors, for instance the impact of the European Union.

In this article I argue that that the recent improvement of judicial and administrative quality (or governance) was driven by EU membership, which was conditioned on the fulfillment of democratic, economic and institutional (administrative) requirements. The argument of EU-driven governance reforms is less convincing for first-wave countries, which to a great extent reformed their institutional framework already in the early 1990's and had a sufficient gover-nance quality already by the mid 1990s. Since the involvement of the EU the less advanced countries from the Helsinki group caught-up and developed faster than the advanced Luxembourg group countries. I compare the recent governance development of both groups and demonstrate that EU conditionality had on average a stronger impact on the former laggards from the Helsinki group. I also demonstrate that the impact on governance (and especially administrative) reforms was limited as improvement concerned more formal and efficiency-related aspects and less structural power-related aspects. My comparative and historical grounded analysis contributes to the debate on institutional change during transition by highlighting the importance of a more differentiated approach which includes the interplay of different factors (e.g. structural legacies, domestic factors and the EU as an external actor) and different levels of analysis (formal and informal institutions). This analysis shows that communist legacies played a role mostly at the beginning of post-communist transition. It equally shows that the effect of EU conditionality is diffused and depends on the domestic conditions of each country, as well as of the subsector in focus.

The paper is structured as follows. The second section discusses the role of pre-communist legacies for governance quality and shows how pre-communist institutions and actors, de-spite certain continuities in some countries, were to a great extent replaced by imported institutions from the West (before World War I) and especially by communist institutions (after World War II). These two institutional ruptures at critical junctures produced distinct communist legacies which produced different starting conditions at the beginning of transition. Due to the "positive" (i.e. modernizing, capacity increasing) and negative effects (i.e. politicization) of communism these initial conditions were not always worse for Ottoman successor countries. The third section argues for the need to include the EU as an external and non-historical driver of governance reforms in recent years. It answers how (mechanisms of Europeanization) and under which conditions the EU generates institutional change in candidate countries and reveals empirically when and where (i.e. in which candidate countries and on which dimensions on governance) reforms were successful. The last section concludes.

2. The role of historical legacies for governance quality

With regard to pre-communist institutional legacies, different types of legislative and administrative systems can be identified in pre-communist Central and Eastern Europe (CEE). A more favorable Habsburg judicial and administrative system--in general relative efficient, and less corrupt, based on an effective legal system (5)--was present in the Czech Republic, Slovakia, Hungary, Slovenia and parts of Romania (Transylvania, Banat, Bukovina) and Poland (Galicia). Additionally, the favorable Prussian-German administrative system was installed in the Western parts of Poland. In contrast, the Baltic States were under the influence of the Russian administrative system, which despite the importance of the law, was characterized by close relations between politics and civil service, strong centralisation and hierarchy (6).

After independence from Russia in 1918/1920, the Baltic States borrowed legislative and administrative institutions from Western Europe, particularly from Germany (7). Bulgaria and parts of Romania (Moldavia, Wallachia) inherited the less favorable administrative and judicial system from the Ottoman Empire which in its final centuries was characterized by a huge, badly paid and inefficient bureaucracy, corruption, and low enforcement of legislation (8). Briefly and simplistically stated, one could argue that the differences in historical legacies reflect the variation during transition. Such an argument, which was used until recently (9), was facilitated by the inferior institutional and economic development of non-Habsburg successor countries. Can the different pre-communist institutional legacies account for the diverse institutional performance of first and second-wave countries during the last two decades?

The answer on the importance of pre-communist legacies depends upon the degree of institutional break with the Ottoman, Russian and Habsburg institutions and the subsequent penetration of the following ones. In this regard, we have to consider that already at the turn of the 19th century a formal institutional break from the former Empires had occurred, which can be considered a critical juncture (10), especially for formal institutional development. This transition was accompanied partly by changes in personal structures but in general less by a deep and structural modernization. Central and Eastern European Countries (CEECs) had become independent nation states and had to build up new independent structures (legal system, administrative system). During this transition process native civil servants replaced the former Russian judicial and administrative officials in Poland and the Muslim ones in Bulgaria (11). In contrast to Ottoman successors, Habsburg countries did not have to replace so many civil servants and judges as they had mainly employed native personal. This fact con-tributed to a more pronounced elite and personal continuity in Habsburg territories (12) and indicates a less pronounced break with the pre-communist legacy.

However, in all countries a formal institutional change occurred, which implied the trans-plantation of institutions and practices from more advanced Western Europe. In order to strengthen national unity and power, the newly established states (e.g. Bulgaria, Romania, partly also Poland) were centralized and bureaucratized (13). The formal institutional change was however weaker in the countries with Habsburg legacy. In Hungary, for instance, legal continuity could be upheld until 1945. (14) Although CEECs succeeded often to copy Western legal systems and import formal institutions, they were not able to fully catch up with regard to economic development and informal institutions. This is why some scholars claim that only forms without content were imported (15). In general, institutional reforms were more successful in former Habsburg states than in Ottoman successor states (16). Especially Bulgaria and Romania had to deal with difficult structural and economic conditions and lack of quali-fied staff (17) which lead to an insufficient implementation of newly imported institutions and superficial modernization (18). Such a formal institutional change of a small group of elites makes it probable, that informal institutions and former administrative practices (especially at the countryside) could persist during the first decades after the breakdown of the two Em-pires (19).

The second and much more intensive institutional and structural break occurred in 1945. The introduction of communism after World War II can be seen as a significant critical juncture which changed both the formal institutions (e.g. new constitutions) and the informal institu-tions (e.g. habits, attitudes and behavior of citizens) (20). Changes of informal institutions oc-curred through the transformation of society structure, triggered by the emphasis on indu-strialization and education. Inefficient structural patterns manifested in a strong bureaucratic state, the separation between state elites and society, corruption and the evasion of law. In-doctrination and totalitarian control led to defensive and reverse effects like non-obedience of rules, non-respect of laws, distrust and double standards of talk and conduct (21).

The break occurred additionally at the agency level. One reason why Ottoman, Russian or Habsburg administrative legacy could hardly persist is that former political elites (as well as administrative and judicial bureaucrats) were abruptly eliminated after World War II (22). This sudden elite change in turn changed power relations and led to new institutional choices. A consequence from such new ideological and institutional choices was the all-embracing role of the state (communist party), which used the administrative system as an "implementation machine" for its decisions or for the suppression of citizens (23).

Through its central planning mechanisms and strong state control the Communist system equalized regional pre-communist administrative differences. Romania, for instance, with its inherited Habsburg regions (Transylvania, Banat, Bukovina) and Ottoman Empire ones (Moldova, Wallachia) adopted a common system which engendered uniform structural and behavioral patterns in the administrative and legal domains. Of course, regional cultural particularities remained; however, through strong centralized governance which punished dissident practices and thinking, former historical structures merged more or less into a single one (24). A recent proof of this uniformity is the inquiry made by Badescu/Sum which shows that Romanians have similar opinions on democracy or levels of informal trust in all regions. (25) Also in Poland the interwar system and communist rule replaced most of the former bureaucratic traditions of the Russian, German and Habsburg Empires and introduced a single centralized administrative system. (26)

Communist legacy--the common norms and patterns of behaviour engendered by socialist ideology and planned economy--is considered to be a stumbling block on the way to market economy, Capitalism and effective governance. (27) Communist public administrations were characterized by political influence, no consequent separation of competencies, high centrali-zation, no precise career patterns, autocratic style, corruption and an overall low quality of bureaucracy (28). Communist legal and judicial systems were described by the World Bank as follows: "The entire purpose of the legal system under communism was to enforce the inter-ests of the working class, as represented by the communist party. Courts and judges were part of the executive branch and fully subordinated to the political leadership of the com-munist party. There was no idea of limited government, checks and balances, or individual or corporate rights vis-a-vis the state. The position of judge was not particularly prestigious and was often staffed on a part-time basis. Courthouses were drab and unwelcoming, designed for an inquisitorial system of criminal prosecution where the defendant was almost always found guilty." (29) Communist administrative and judicial ideology had therefore many negative features, which led to deterioration in judicial and administrative independence.

Nonetheless, communism was not a uniform experience and differed widely across communist Europe. (30) This diversity of "communist legacies" is best expressed in the words of Ekiert/Hanson: "... it becomes clear that the types of communist takeovers; the degrees of enforcement and institutionalization of Marxist ideology, Leninist party rule, and Stalinist economics,--modalities of transition to a post-totalitarian regime,--and modes of deconstruction in the final years of state socialism varied widely across the region". (31) This variation is also reflected in the different administrative systems, which despite a common communist approach, began to distinguish themselves as some countries started reforms in the 1980s. Poland and Hungary abolished in 1971/1972 the subordination of national soviets and of the special organs and divided local administration competencies. (32) Other states (Bulgaria, Romania, Baltic States) in which communist leaders remained strongly committed to central planning and authoritarian rule experienced fewer reforms, leaving the relationship between the executive and the bureaucracy (or judiciary) unchanged. Thus, in terms of political, administrative and organizational changes only few countries reformed. Yet, communism turned out to be economically beneficial for Ottoman successor states. Bulgaria's and Romania's economic and structural indicators (GDP per capita, illiteracy, rates, urbanization rate) as well as the relatively high ranking of these countries in the EBRD Initial Conditions Index (see Table 1) suggests an economic and structural catch-up which was reflected in increased administrative and judicial capacity as well.

Bulgaria's governance catch-up is reflected in the data provided in the International Country Risk Guide (ICRG) from the PRS group. According to the composite governance indicator, Bulgaria had a similar level of governance as Poland and Czechoslovakia in the last years of communism. This development would speak for the importance of communist legacy, as opposed to pre-communist legacy (see table 2). On the other hand, the governance values for Hungary and Romania would speak for the persistence of pre-communist legacies. Thus, a clear verdict for or against the importance of pre-communist legacy depends on the country and period in focus. What becomes evident, however, is that similar historical legacies do not have to engender a similar institutional development in the future.

Pre-communist and communist legacies (or initial conditions for the transition) are important in the sense that they provided a certain continuity of political, social and economic aspects of the governance system during the first years of transition. As a consequence of more fa-vorable or less favorable communist legacies, post-communist countries entered transition with diverse structural starting conditions. These initial conditions seem to have facilitated the transition towards market economy in the first years and laid down a different starting basis for economic and governance reforms. They were especially bad for the Baltic States which did not possess independent governance structures as they were strongly integrated in the centralized system of the Soviet Union. After their independence from the Soviet Union the Baltic States had to build up their administrative and judicial structures almost from scratch. But this less favorable communist legacy could be overcome some years later.

To sum up, the inherited pre-communist and communist stumbling stones on the way to an efficient institutional framework and effective governance differed across post-communist countries, i.e. communist states had a considerable structural diversity, resulting in different initial conditions for economic and governance reforms. It should have become clear that administrative and judicial pre-communist institutions became less important during the communist period. I argue that the same happened for communist legacies during the last years as well. While communist legacies played certainly a role at the beginning of transition, they cannot explain why most countries from the Helsinki group managed to catch-up with the Luxembourg group in recent years. Besides historical legacies, non-path dependent fac-tors, such as external influence (e.g. ELI conditionality) account for the recent improvement in governance quality. In the following section, I will analyze the role of the ELI as a crucial recent factor for governance reforms.

3. The role of the EU for governance reforms

3.1 Mechanisms of Europeanization and conditionality effectiveness

The influence of international financial organizations (e.g. IMF, World Bank, Council of Eu-rope) on governance and institutional change has been acknowledged (34). While the World Bank exerted influence in sectoral projects, the IMF especially influenced macroeconomic policies. (35) As ten transition countries from CEE obtained a perspective to join the ELI, at least from 1998/2000 onwards, the impact of ELI-legislation on institutional performance should be taken into consideration. While ELI impact played an important role in the institutional choices of CEEC, it would be wrong to ascribe the whole impact on governance reforms to Europeanization effects. The triggers and support for governance reforms came as well from other donors (e.g. Council of Europe, USAID), but the ELI was the most important external actor. Evidence for the dominant role of the ELI as the principal external actor in CEE comes from the Official Development Assistance (ODA) database, OECD. ELI financial aid ac-counted almost every year for more than 50% of the total aid provided by all international donors. On average the relative aid allocated by the ELI was with 73% higher for the Luxembourg group than for the Helsinki group (65%), which can be explained with lower allocated financial aid to Bulgaria and Romania during this period (which however increased until 2007) (36). The net sum of the ODA disbursements during 2001-2004 ranged from 245 million USD for Estonia to 2.7 billion USD for Poland. Some numbers for Phare support to Public Administrative and Judicial Capacity reform in Romania and Bulgaria reflect the financial importance of the ELI. The total allocations for administrative and judicial capacity reforms between 1998 and 2006 amounted to 452 million EUR for Romania and 260 million EUR for Bulgaria. (37)

The central role of the ELI for domestic reforms in CEE is appreciated in the Europeanization literature (38). Most scholars speak of Europeanization "... when something in national political systems is affected by something European" (39) or as "the impact of EU rules on domestic change". (40) Domestic change as the dependent variable refers to the capacity of the ELI to engender either institutional change or policy change. (41)

This becomes clear in the definitions of Europeanization. According to Mair, Europeanization encompasses "... the penetration of European rules, directives and norms into the otherwise differentiated domestic spheres". (42) Radaelli's definition covers besides the formal rules also many informal ones: "Europeanisation consists of processes of a) construction, b) diffusion and c) institutionalisation of formal and informal rules, procedures, policy paradigms, styles, 'ways of doing things' and shared beliefs and norms which are first defined and consolidated in the EU policy process and then incorporated in the logic of domestic (national and subnational) discourse, political structures and public policies". (43)

In contrast to Europeanization as a two-way interaction process between member states and European institutions, Europeanization of former post-communist countries was a one-way process as they did not have a formal mechanism to influence the EU prior to accession. The EU membership negotiations were in fact a top-down process of hierarchical, "asymmetrical bargaining" in which the EU was a dominant influencing power. (44) That is why bargaining is in fact a misleading term as the governments of candidate countries can only bargain about transitional periods and some exceptions, but on the whole have the obligation to fulfill the fixed "Copenhagen criteria" prior to their entry. These criteria consist of stable democratic institutions (rule of law, human rights), the existence of a functioning market economy, as well as the capacity to cope with the competitive pressure and market forces within the EU, the ability to take the obligations from the membership, i.e. to adopt the acquis communau-taire. At the Madrid Council in 1995 a fourth criterion with a similar importance was announced, namely the creation of administrative capacity (45) to enforce the acquis communau-taire in practice. (46)

In the following section I will explain the mechanisms (how?) and the requirements of effec-tive Europeanization in CEECs. With regard to the "how" question, conditionality is men-tioned as the main Europeanization mechanism to transfer EU institutions into candidate countries. (47) Conditionality basically means that the EU offers membership and pre-accession support to candidate countries and, at the same time, maintains a strong pressure on the fulfillment of the accession requirements. In fact, conditionality consists of multiple conditionalities which are related to democratic, economic and administrative requirements which have to be fulfilled in order to achieve accession. However, these partial conditionalities are interrelated. Administrative conditionality is for instance linked to the democracy requirement (rule of law, reform of judiciary) and the capacity to implement the internal market acquis. (48)

Regarding administrative conditionality/acquis conditionality, Grabbe distinguishes between five different conditionality mechanisms through which the EU stimulates institutional and governance changes: gate-keeping (i.e. the access to negotiations and further stages in the accession process), benchmarking and monitoring (i.e. evaluation in the country progress reports), aid and technical assistance to improve the administrative capacity for the implementation of the acquis communautaire (i.e. PHARE, pre-accession funds SAPARD and ISPA), policy advice and twinning (i.e. the secondment of EU officials and experts to improve appli-cant countries' civil administrations). (49) While Grabbe mentions a fifth mechanism, namely models (i.e. provision of legislative and institutional templates), she notes that the EU was reluctant "to provide administrative models in areas where member states' administrations remain so diverse". (50)

Regarding the conditions of effective Europeanization (when conditionality is effective), scholars agree on the necessity of a "misfit" or a "mismatch" between EU requirements and the domestic status quo. (51) Such a misfit thesis assumes that the bigger the institutional gap between EU requirements and current domestic institutional setup, the stronger the Euro-peanization effect. Or in the words of Borzel/Risse: "The lower the compatibility between Euro-pean and domestic processes, policies, and institutions, the higher is the adaptation pressure on the Member States." (52) However, rule adoption is also possible without adaptation pressures (53) and although misfit is a necessary condition, it is not considered to be a sufficient one for institu-tional change: "Whether misfit produce a substantial effect at the domestic level depends on the pres-ence of various factors facilitating adaptation and serving as catalysts for domestic change". (54)

Some of these facilitating and impeding factors for effective rule transfer/conditionality are identified in the external incentives model. (55) According to this rationalist bargaining model of external governance, the EU establishes rules and conditions which the CEECs have to fulfill in order to receive rewards. As the governments of applicant countries use cost-benefit calculations, they will only adopt EU rules if the economic and political benefits from EU membership exceed the costs of domestic adoption (costly domestic reforms). Besides the costs of adoption, conditionality depends on the preferences of the government and on opposing groups (veto players). Such political and economic elites, which have higher benefits from the status quo and strive to preserve their power, often oppose EU rule transfer and delay institutional change. After all, rule adoption and implementation is done by the national government which has to balance EU and domestic pressures in order to maximize its own benefit. Given the immense benefits of EU membership, national governments of applicant countries had the will and could finally push through policy and institutional reforms against the resistance of domestic anti-reformist groups. Because of the immense reward of EU membership which comes at the end of a "much longer and more structured conditionality process", EU conditionality is perceived as more effective than conditionality of other international financial organizations such as the World Bank or the IMF. (56)

Despite the existence of several tools and conditionality mechanisms, the EU's influence is regarded as diffuse because of several factors: a lack of institutional templates, uncertain lin-kage between requirements and benefits, the late reward of accession, no transparency in the evaluation of progress and inconsistencies within EU's advice. (57) The EU has been criticized that it could not provide a specific blueprint for public or administration or judicial reforms. (58) Indeed, there was no administrative acquis (specific administrative rules) which had to be transposed. But why should the forceful application of an abstract administrative blue-print be desirable? The lack of an EU blueprint left the candidates more flexibility to choose from different national administrative traditions and practices of member states which served as models for their own transformation. (59) Although the EU, jointly with the OECD group SIGMA (60), developed specific criteria and guidelines for administrative reforms in the late 1990s, they never reflected common EU administrative norms. (61)

What seems to be more important for governance change is not the lack of administrative blueprints but the continued EU pressure on candidate states to fulfill the administrative criterion. And despite the lack of clear administrative rules, the EU could nonetheless trigger administrative reforms in some candidate countries. The next section will try to provide some empirical data and explain when and where EU generated governance and institutional change.

3.2 Measuring EU impact on governance

Europeanization has become a trendy theoretical concept which is used as a general explana-tion for numerous phenomena of change. Yet, a remaining challenge of Europeanization re-search is to provide indicators and empirical methods to measure and operationalize the impact of the EU on institutional development. Some recent studies attempted to do 50. (62) However, to separate EU influence from globalization (IMF, World Bank) or domestic effects is not an easy task. According to Borzel "... it is often difficult to isolate the 'net effect' of Europe and to disentangle it from other sources of domestic change not only at the global, but also at the national level and local level". Although comparative case studies can offer thorough analysis and a partial solution, they concentrate on particular policies or few countries and do not solve the lack of large-N studies and the problem of intentional selection of cases. Thus, a more general comparison of governance performance over time is necessary. The crucial question which I will try to answer is: Which impact (deep or superficial) has EU's transformative power in the area of governance in EU candidate countries during the last decade?

For the purpose of the analysis, I use the concept of governance as the quality of bureaucracy and the judiciary, including both legal rules and players. Good governance is reflected in a non-politicized, impartial, uncorrupt and efficient bureaucracy and judiciary which provide stability and certainty for human interaction. In detail the quality of bureaucracy and the ju-diciary are assessed by formal and efficiency-based aspects (e.g. new legislation, creation of new bodies and agencies, increased budget etc.) and structural and power-related aspects (e.g. merit-based recruitment promotion; the extent of politicization, impartiality, and administrative and judicial corruption). I will not consider the often included dimension of political stability in my concept of governance, as the political conditions were met in both groups until the mid 1990s, except for Slovakia, which met the Copenhagen political criteria in 199966. The comparative analysis deals mainly with the period after the year 2000, i.e. when ELI membership requirements became a driving motor for governance reforms.

3.2.1 Quality of the bureaucracy

a. Formal and efficiency-related aspects

Formal legal or constitutional change was the first step of a public administration reform in ELI candidate countries. However, there was a considerable variation in terms of the launch-ing administrative reforms. Most first-wave countries were early reformers (Hungary in 1992, Poland in 1996, Estonia in 1995/1996), except for the Czech Republic which adopted the civil service legislation required by the ELI only in 2002. With increasing ELI pressure to focus more on administrative reforms, most first-wave countries adapted and revised the earlier passed laws and amended formal administrative legislation between 2000 and 2003. (67) In contrast, the second-wave countries can be characterized as partial reformers (Latvia, Lithuania) or late reformers (e.g. Romania, Bulgaria, Slovakia which started reforms only at the end of the 1990s). Lithuania and Latvia, for instance, introduced administrative reforms quite early (1993-1995), but had difficulties with their implementation and continued administrative re-forms. With increasing pressure from the ELI, since 2000 they advanced from laggards to frontrunners later on.

The reasons for a later start and an insufficient implementation of administrative reforms can be attributed to less favorable economic conditions (lack of capacity) or political resistance (lack of will). In contrast to early reformers from the Luxembourg group, second wave-countries had much weaker economies and faced sharper economic downturns in the wake of the Russian financial crisis in the mid 1990s. While some authors saw these external shocks as a hindrance for administrative reforms (as countries had to focus on macroeconomic stabilization), others reported that the external economic shock was a trigger to reform governance in the Baltic States. (68) Most probably, both authors are right. A weak economy reduced the government's capacity and the political leeway to advance with administrative reforms for a while. (69) But the economic shock was especially for the Baltic countries a new impetus to learn from old mistakes and improve governance structures. Similarly, Romania's public administration reforms advanced after economic recovery in 1999/2000. (70)

Besides these economic-related reasons politics played a role as well. In Slovakia, an economically more stable country, non-economic factors, such as the desire for power and control of the illiberal Meciar government, hindered administrative reforms. Only after the Meciar government was replaced in 1998 could the new government under the leadership of Dzurinda successfully launch reforms and even catch-up with the performance of the first-wave countries. (71)

While government changes and the consecutive replacement of officials impacted in Slovakia, Bulgaria and Romania on the administrative memory and thus on the effectiveness of administrative reforms, this was less the case in the Baltic States. In this context, authors argued that the structure of party competition affected the degree of politicization. (72)

With the increased pressure of the ELI since 1999/2000 (the announcement of the opening of ELI membership negotiations at the December 1999 Helsinki Council), accelerated formal and legal development occurred. The ELI's impact on formal administrative change was in general more effective in the Helsinki group (and especially in Bulgaria and Romania) as these countries lacked the formal administrative and legal structures and agencies which had already been introduced in the mid 1990s in the Luxembourg group (except for the Czech Republic). Most countries from the Luxembourg group had already achieved a substantial level of formal administrative capacity during the mid 1990s and had to make relatively smaller adaptations to comply with ELI requirements.

Evidence from the ELI progress reports shows how all candidate countries built up new agencies, designed new strategies or action plans and made formal legal changes. Examples are numerous, such as the establishment of training and coordination institutes (e.g. Institute for Public Administration and European Integration in Bulgaria, National Institute of Administration in Romania, Office of Public Administration Reform in Estonia etc.) and diverse administrative Commissions and Councils to monitor the implementation of the civil servants law. Besides, different amendments to the Civil Service law were made, which intro-duced mandatory competitive selection for new entrants to the civil service and a strengthen-ing of the merit principle (73). To make the civil service more accountable and less corrupt, codes of conduct (or codes of ethics) for the civil service as well as obligatory asset declarations of high-ranking civil servants were introduced. Organizational measures included the establishment of performance appraisal systems and databases of trained civil servants (74). Salaries and the number of officials (except for Estonia) increased continually. New islands of excellences were for instance reflected in Hungary's new "civil servant elite" which received outstanding salaries (75). The Twinning program provided training for public officials from different sectors and focused especially on less developed candidates who benefited from more joint training projects (see table 3).

In sum, despite some structural and inhibiting factors during the mid 1990s (worse starting conditions and economic crisis) which delayed administrative reforms in the Helsinki group, the ELI membership provided a new impetus for reforms. While formal and efficiency-related change occurred in all countries, it was especially pronounced in the countries of the Helsinki group.

b. Structural and power-related aspects

How effective were the ELI-driven administrative reforms? Despite the formal and legal change, in practice politicization and favoritism continue. In terms of the creation of a depoli-ticized and merit-based bureaucracy reforms mostly failed. Persistence of politicization is reflected in the data provided by the International Country Risk Guide, ICRG (table 4). The ICRG data indicate the general failure of post-communist countries to get rid of the legacies of communism. The scores remained unchanged except for two negative trends (Hungary's decline after accession and Estonia's decline in 2002) and two success stories (Latvia and Lithuania).

Some recent case studies confirm these less encouraging results of reforms. The cases of Ro-mania (76), Hungary (77) , Slovenia (78) and the Czech Republic (79) show that despite the introduction of formal legislation and new agencies to reduce politicization, power structures (political-administrative relations) were hardly changed. The new created bodies and agencies were often politically weak and after accession were even dismantled in Poland and the Slovak Republic. Politicization continued in the appointment of top level bureaucrats in Hungary as well (80). As the legislation had become quite protective, informal pressure was applied in Ro-mania to dismiss people (81). According to Verheijen, only Latvia and Lithuania "constitute the main exceptions to the general trend towards increasing politicization of appointments and career management" (82). These countries also experienced more administrative reform continuity despite a rapid turnover of governments (83).

Despite the increase of administrative and judicial capacity, some scholars point out that this improvement did often not affect the whole bureaucracy and created sectoral "islands of ex-cellence". (84) These bureaucratic islands were filled with skilled and motivated bureaucrats who were responsible for innovative tasks, mostly related to EU funding (EU funded pro-grams) as opposed to the majority of the officials who performed routine tasks. (85) Unfortu-nately, hardly any spill-over occurred from these excellence centers to the periphery of the bureaucracy (which remain underfinanced) or to other core ministries (which remain politi-cized). Even where the EU impacts positively on the creation of these new centers which are filled with a new young generation of well educated bureaucrats, sustainability is seldom achieved as "after gaining experience and improving their skills "they leave for better condi-tions either in the private sector or in international and non-governmental organizations". (86)

Impartiality is an important feature of a modern Weberian bureaucracy. Survey data from the Global Competitiveness Report (World Economic Forum) on favoritism in decisions of government officials speak for a mixed impact of the EU (table 5). On the one hand, the data reveal that some success during the accession period was achieved in the Czech Republic, Estonia and Slovakia. On the other hand, the indicators show that some countries (Hungary, Slovenia, Bulgaria) experienced even deterioration during the accession period. Finally, deteriorating values after accession indicate a backlash of reforms and speak against a sustainable effect of the EU to create an impartial public administration.

An important goal of administrative reforms was to reduce corruption. This goal was mostly attained. Irregular payments to government officials show an overall positive trend towards less administrative corruption (see table 6). This positive development is in line with corrup-tion ratings provided by Freedom House or Transparency International and reflects the gen-eral trend of less petty corruption in CEE. It is noteworthy, however, that shortly after acces-sion several countries from both groups experienced a decline (Estonia, Hungary, Lithuania), which again raises the question of sustainability of corruption reforms.

3.2.2 Quality of the judiciary

a. Formal and efficiency-related aspects

In general, all countries experienced increased formal and efficiency-related changes during the pre-accession period. One area of formal legal change where the ELI had a strong impact was the adaptation and adoption of civil and penal codes and procedures, as well as the obligation to conform to international conventions. The legislative changes also involved new procedures for the selection, promotion and assessment of judges. As regards judicial governance, several new structures and agencies were created to enhance administration (e.g. court administrators), improve law enforcement (e.g. the bailiff service was privatized in most countries) and training (e.g. training institutes, judicial academies). Judicial councils were introduced in all countries to increase the independence and the self-government of the judiciary (selection, promotion, evaluation and training of judges).

Despite these general improvements, some indicators speak for a stronger impact of the ELI on judicial quality in the Helsinki group. For instance, annual data on the annual judicial budget indicate that the relative budget increase was more pronounced in the laggard coun-tries from the Helsinki group, where budget figures more than doubled between 2002 and 2006 (see table 7).

In contrast, the Czech Republic, Hungary, and Slovenia had already in 2002 a sufficiently high court budget which did not increase in the following years so strongly. Most of the budget was spent on salaries, but also on training (e.g. creation of Judicial Academies or Judicial Training Centers), court administration (e.g. introduction of court directors and court managers) and equipment (e.g. computers, office equipment). Similarly, organizational changes led to an increase of the number of judges and court staff between 2002 and 2006. While the number of professional judges increased in both groups almost to a similar extent (+15% for the Luxembourg group and +19% for the Helsinki group), the number of court staff augmented much more in the Helsinki group (+75%) than in the Luxembourg group (+10%). (87) The data suggest that while ELI-driven judicial infrastructure reforms improved judicial ca-pacity in all countries, the impact was in general bigger for countries from the Helsinki group.

Indicators of judicial independence provided by the World Economic Forum's Executive Opinion Survey reflect in general a beneficial role of the ELI (see table 8). Several interesting trends can be noticed. First, most countries (except for Slovenia, Poland and partly for Bulga-ria) advanced judicial independence until 2004, the year of accession. This trend reflects the pressure of the ELI and the general attitude of other external donors to stress reform of judi-cial independence. Second, while the more advanced Luxembourg group experienced deterioration after accession (except for Poland), almost all countries from the Helsinki group continued to catch up and advanced further.Thus, while the momentum for judicial reform was kept up in the laggard countries, it was lost in the frontrunner group. According to Pridham evaluation of the Latvian case, "Judicial reform did not stop with ELI entry. The accession process had created a certain dynamic". (88) It seems that the ELI had a bigger leverage on less advanced countries and especially on Bulgaria and Romania where ELI conditionality worked through the Special Cooperation and Verification Mechanism. (89)

b. Structural and power-related aspects

While it was easier to adopt laws and regulations on judicial independence and increase the judicial budget (together with salaries, training and equipment), the effective implementation of new rules as well as learning how to use the new resources was more difficult to achieve. Daniela Piana, who analyzed the development of judicial quality in Hungary, Poland and the Czech Republic, concluded recently that "the preaccession strategy was not able to subvert the distribution of power that already existed in the candidates at the beginning of the pre-accession negotiations, mainly because of the technical and apolitical nature of EU conditionality". (90) She pointed out that "organizational changes have been introduced to the extent they were not detrimental to the allocation of power inherited from the first wave of reforms" so that the status quo could be upheld, especially in terms of the governance of the court system, the appointment, promotion, evaluation, and training. (91)

Power-related enforcement aspects of judicial governance remain an issue in Romania and Bulgaria. For instance, judicial councils, which should guarantee more judicial independence, do not have real power in practice as they are understaffed and not permanent bodies. (92) Despite the newly introduced ethical codes, "there is little evidence of enforcement of these ethical codes, including by the SJC as far as the ethical codes for the three categories of magistrate are concerned".93 Recently, the ELI reported that "progress in the judicial treatment of high-level corruption is still insufficient". (94)

Despite the positive trend towards and independent judiciary, absolute levels of independence remained low--especially in Bulgaria and Romania--as new legislation which aimed to reduce politicization of the judiciary were not put into practice. In Romania, this lead to an intervention by the ELI in 2004 and a new reform endeavor to bring an end to the political appointment of judges. (95) The main instrument for an increased pressure was the introduction of the "safeguard clause" which speeded up Romanian judicial reforms after 2004. (96)

Despite certain power-related enforcement problems there are signs that the overall judicial capacity increased. There is also some evidence that judicial quality improved relatively more in the Helsinki group than in the Luxembourg group. BEEPS (Business Environment and Enterprise Performance Survey) data provided by a World Bank survey of firms which use courts, measures several components of judicial quality (enforcement capacity, affordability, speed, honesty/corruption and fairness). This data show that in countries where a certain judicial quality was reached already in 2002 (e.g. Czech Republic, Slovenia, Hungary) no progress was made 3 years later (figure 1-10 in appendix). Estonia and Poland (little improvement) are positive exceptions in the Luxembourg group. In contrast, the picture looks much friendlier in the Helsinki group where all countries (except for Bulgaria) experienced an improvement. Taking into account Bulgaria's and Romania' lagged progress which occurred in 2006 and 2007, the data suggest that the Helsinki group together with Estonia made a significant improvement on judicial quality in general. The data reflect also the difficulty to advance with reforms after a certain threshold is reached. The more pronounced positive trend of the Helsinki group is confirmed by survey data on irregular payments in judicial decisions, from the World Economic Forum's Global Competitiveness Report which reflects a better on average development in terms of less bribes in the Helsinki group (+0.62) than in the Luxembourg group (+0.24) (see table 9.

To sum up, a number of general observations can be drawn from the comparison of the two groups of countries. First, in terms of judicial and administrative quality the EU mattered more for the less advanced countries from the Helsinki group. The catch-up of the Helsinki group suggests a stronger EU leverage on countries with a lower level of governance. Second, deterioration of governance indicators after EU accession speaks against the sustainability of reforms for countries (e.g. Hungary, Slovenia, Poland) which had started administrative and judicial reforms before the EU got involved. Third, formal and efficiency-related reforms were more successful than structural and power-related reforms (except for the decreasing irregular payments to government officials).

What are potential explanations for the limited EU impact on governance reforms? First, there are EU specific reasons for the limited impact. They include the lack of a public admin-istration orjudicial model which could enable a visionary and coherent strategy of transfor-motion, based on specific criteria for the governance area. Although European principles for public administration (reliability, predictability, transparency, and a basis in law) were out-lined by the joint EU-OECD initiative SIGMA, there was no methodology for how to put these abstract principles into practice or how to monitor their implementation. Regarding judicial capacity and independence, regular reports failed to translate these abstract concepts into a set of well-defined criteria. One could also argue that the EU has not done enough, especially as concerns public administration reforms. The question is whether training (e.g. through Twinning) was effective and sufficient enough to produce a critical mass of well-trained bureaucrats and will remain in the civil sector. Besides, the general technocratic ap-proach was requesting fast visible results in the form of formal and efficiency-based aspects of governance, too often neglecting the pressure on domestic power-related aspects of gover-nonce. The punctual approach which aimed at one final point in time (entry into the EU as the main goal) and not at a long-term vision of governance transformation led after accession to a reversal of governance reforms in the Luxembourg group. This approach questions the sustainability of ELI-driven reforms in some candidate countries (mainly in the Luxembourg group) and calls for the need of a post-accession conditionality (e.g. like in Romania and Bul-garia).

Second, there are domestic reasons for a limited impact of EU conditionality. These reasons are basically related to enforcement problems of new rules (lack of implementation), which can be capacity-related and power-related. The capacity-related lack of enforcement (97) nor-mally occurs because of a weak state capacity and missing financial resources. While this problem has been to a great extent reduced by the financial help of the EU (and the economic growth in the last years), power-related lack of enforcement was neglected. The EU was in most cases (except for the Baltic States) not able to change power structures (e.g. networks of senior officials, favoritism, politicization) which turned out to survive in a parallel, often less formal way. This already entrenched parallel system hardly changed and was big and resistant enough to block possible spill-over from islands of excellence. Governance reforms could not mutually enhance each other (lack of complementarity), especially as other sectors of the political economy were not reformed (e.g. health and social system, education system). In contrast to the other states here in focus, the newly created Baltic States had different facilitating conditions which could explain their success under increased EU conditionality. First, they experienced a bigger rupture in political, administrative and judicial elites after the exit of the Soviet Union and could build up new administrative and judicial structures almost form scratch. Second, despite a lack of administrative capacity in the first years they could overcome this burden as they are relatively small states and additionally experienced favorite economic conditions (e.g. GDP growth, Foreign Direct Investment influx). Under these favorable conditions, EU's leverage was higher than in the other countries.

4. Conclusion

The goal of the comparative analysis was to explain divergent development between the first-wave countries (Luxembourg group) and the second-wave countries (Helsinki group), two groups of post-communist transition countries which experienced EU conditionality during the pre-accession period for several years. In order to consider alternative explanations for post-communist variation--such as explanations based on pre-communist and communist legacies--I traced back the persistence and change of historical institutions and actors and demonstrated that historical legacies are not sufficient to explain the some accelerated breakthroughs in governance reforms at different critical junctures in time. Rather, I discovered the relevance of more recent factors, such as the influence of the EU. The impact was however uneven depending on the subsector or the country in focus. In terms of crosscountry impact, the analysis has shown that EU conditionality had on average a stronger impact on second-wave candidates than on first-wave candidates. The reform reversals after accession in most first-wave countries confirm the limited (unsustainable) impact of the EU. In terms of subsector impact, my indicator-based analysis suggests a stronger impact on judicial reforms than on administrative reforms. In this context, most countries improved their administrative and enforcement capacities relatively more than the power-related aspects (e.g. impartiality, independence) of their judiciaries and bureaucracies. The Baltic States are a positive exception in this regard.

What can we learn from the comparative analysis for further analysis of institutional change? First, variation in institutional development is not only a consequence of structural or historical legacies. Similar historical administrative and judicial legacies do not necessarily bring about a similar development in the future. Variation can be equally explained by temporally more proximate and external factors, like the impact of EU conditionality. This does not mean that historical legacies do not matter, however their effect can be intensified or diffused by more recent factors (be it external conditionality or spill-over from economic crisis or wars). Consequently, it is the interplay of different external and domestic factors which shapes the institutional path of a policy or the overall governance development of a country. Unfortunately, this complex interplay can be context and time-specific so that only the right combination will produce a breakthrough in governance reforms.

Second, it is important to distinguish between superficial and deep effects of external donors. This calls for a more nuanced analysis of EU conditionality as the impact can vary according to the country or the sector in focus. Depending on which aspects of governance one takes as a measure for success, external conditionality can be successful or not. In this regard, it was demonstrated that the EU impact was often limited to the technical, efficiency increasing fa-cets of governance (capacity) and less able to transform the political and power-related as-pects (e.g. independence of bureaucracy). This result should make alert those practitioners who tend to design reform strategies that are based on short-term performance indicators or efficiency benchmarks and do not condition reforms on a change in political-administrativefjudicial relations. Such nonpolitical, non-comprehensive and short-term ac-tivities are prone to reforms reversal and non-sustainable change.

Appendix

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By Martin Mendelski (1)

(1) Martin Mendelski is currently a PhD candidate at Frankfurt University, running research on institutional divergence during transition. So far, he held various visiting positions with prestigious institutions such as the EUI in Florence and Max Plank Institute. His main research interests are European integration, transition economics and democratization.

(2) I excluded the candidate countries Cyprus and Malta from both groups and from the analysis because they are not post-communist countries.

(3) Valentina. P. DIMITROVA-GRAJZL, Essays on the Historical and Current Institutional Development of South East and Cen-tral European States, Dissertation, 2006, https://drum.umd.edu/dspace/bitstream/1903/3403/l/umi-umd-3216.pdf; Carsten GOEHRKE/Seraina GILLY, Transformation and historisches Erbe in den Staaten des europaischen Ostens, Bern: Peter Lang Verlag, 2000; Stephan M. PANTHER, "Cultural Factors in the Transition Process: Latin Center, Orthodox Periphery?", in: Jurgen G. BACKHAUS/Gunter KRAUSE (eds.), Issues in Transformation Theory, Marburg: Metropolis, 1997 p. 95-122; Jan WINIECKI, "Determinants of Catching Up or Falling Behind: Interaction of Formal and Informal Institutions", in: Post-Communist Economies, 16 (2004) 2, pp. 137-152; Svetozar PEJOVICH, "Toward a Theory of the Effects of the Interaction of Formal and Informal Institutions on Social Stability and Economic Development", Freiburger Diskussionspapiere zur Ordnungsokonomik, 1998 (2). Douglass C. NORTH, The Contribution of the New Institutional Economics to an Understanding of the transition Problem, WIDER Annual Lectures 1, 1997.

(4) Ken JOWITT, "The Leninist Legacy", in: Ken Jowitt (ed.), New World Disorder: The Leninist Extinction, Berkeley: University of California Press, 1992, pp. 284-305.

(5) Barbara JELAVICH, A History of the Balkans, Eighteenth and Nineteenth Centuries, Volume 1, Cambridge: Cambridge University Press, 1983; Robert A. KANN, A History of the Habsburg Empire, 1526-1918, Berkeley: University of California Pres, 1974.

(6) Barbara LIPPERT/Gaby UMBACH, The Pressure of Europeanisation: From Post-Communist State Administrations to Normal Players in the EU System, Baden-Baden; Nomos, 2005, p. 63.

(7) Stanley VANAGUNAS, Civil Service Reform in the Baltics, paper prepared for presentation at Civil Service Systems in Comparative Perspective, School of Public and Environmental Affairs, Indiana University, Bloomington, Indiana, April 5-8, 1997.

(8) David SUGAR, Southeastern Europe under Ottoman Rule, 1354-1804, Seattle, London: University of Washington Press, 1977; Bernard LEWIS, What Went Wrong? Western Impact and Middle Eastern Response, New York: Oxford University Press, 2002; Carter V. FINDLEY, Ottoman Civil Officialdom: A Social History, Princeton: Princeton University Press, 1989.

(9) Valentina. P DIMITROVA-GRAJZL, Essays on the Historical and Current Institutional Development of South East and Central European States, Dissertation, 2006, https://drum.umd.edu/dspace/bitstream/1903/3403/l/umi-umd-3216.pdf; Jan WINIECKI, "Determinants of Catching Up or Falling Behind: Interaction of Formal and Informal Institutions", in: Post-Communist Economies, 16 (2004) 2, pp. 137-152.

(10) Ruth. B. COLLIER/David COLLIER, Shaping the Political Arena: Critical Junctures, the Labor Movement, and Regimes Dynamics in Latin America, Princeton: Princeton University Press, 1991, p. 29; Barbara JELAVICH, A History of the Balkans, Eighteenth and Nineteenth Centuries, Volume 1, Cambridge: Cambridge University Press, 1983; Paul PIERSON, Politics in Time: History, Institutions, and Social Analysis, Princeton: Princeton University Press, 2004, p. 51.

(11) On Bulgaria see Bernard LORY, Le sort de l'Empire ottoman en Bulgarie, Istanbul: Isis, 1985, p. 63; on Poland see Christopher HAMILTON/Wojciech ROSZKOWSKI, "Bureaucratic Poland: Organized Life inside the Maverick Society", in: Jaroslaw Piekal-kiewicz/ Christopher Hamilton (eds.), Public Bureaucracies between Reform and Resistance. Legacies, Trends, and Effects in China, USSR, Poland and Yugoslavia, New York: St. Martin's Press, 1992, pp. 131-178, p. 137.

(12) A. J. P. TAYLOR, The Habsburg Monarchy 1809-1918. A History of the Austrian Empire and Austria-Hungary, London: Hatmish Hamilton, 1948, p. 86 and p. 185.

(13) Wolfgang HOPKEN, "Zentralstaat and kommunale Selbstverwaltung in Bulgarien 1880-1910. Zum Charakter eines "Modernisierungskonfliktes", in: Jahrbucher fur Geschichte Osteuropas 39 (1991), pp. 199-213, p. 200; R. F LESLIE, The History of Poland since 1863, Cambridge: Cambridge University Press, 1983.

(14) Tomasz GIARO, (2006): Modernisierung durch Transfer-Schwund osteuropaischer Rechtstraditionen, in: Tomasz Giaro, (ed.): Modernisierung durch Transfer im 19. and fruhen 20. Jahrhundert, Rechtskulturen des modernen Osteuropa. Traditionen and Transfers, vol. 1, Frankfurt, pp. 275-332, p. 304.

(15) Holm SUNDHAUSSEN, "Die "Modernisierung" der Balkanlander in vorsozialistischer Zeit: ein Missverstandnis and seine Folgen", in: Ilina GERGORI/Angelika SCHASER, (eds.), Rumanien im Umbruch. Chancen and Probleme der europaischen Integration, Bochum: Winkler, 1993, pp. 23- 34, p. 25.

(16) Tomasz GIARO, (2006): Modernisierung durch Transfer-Schwund osteuropaischer Rechtstraditionen, in: Tomasz Giaro, (ed.): Modernisierung durch Transfer im 19. and fruhen 20. Jahrhundert, Rechtskulturen des modernen Osteuropa. Traditionen and Transfers, vol. 1, Frankfurt, pp. 275-332, p. 313.

(17) Bernard LORY, Le sort de l'Empire ottoman en Bulgarie, Istanbul: Isis, 1985, p.77.

(18) Holm SUNDHAUSSEN, "Die "Modernisierung" der Balkanlander in vorsozialistischer Zeit: ein Missverstandnis and seine Folgen", in: Ilina GERGORI/Angelika SCHASER, (eds.), Rumanien im Umbruch. Chancen and Probleme der europaischen Integration, Bochum: Winkler, 1993, pp. 23- 34.

(19) Bernard LORY, Le sort de l'Empire ottoman en Bulgarie, Istanbul: Isis, 1985 ; Wolfgang HOPKEN, "Zentralstaat and kommunale Selbstverwaltung in Bulgarien 1880-1910. Zum Charakter eines "Modernisierungskonfliktes", in: Jahrbucher fur Geschichte Osteuropas 39 (1991), pp. 199-213.

(20) Jon ELSTER/ Claus OFFE/ Ulrich. K. PREUSS, Institutional Design in Post-Communist Societies: Rebuilding the Ship at Sea, New York: Cambridge University Press, 1998, p. 158.

(21) Piotr SZTOMPKA, Civilisational Competence: A Prerequisite of Post-Communist Transition, 2000, p. 6. http://www.ces.uj.edu.pl/sztompka/competence.rtf.

(22) Higley and Lengyel would term such a process replacement circulation. See John HIGLEY/ Gyorgy LENGYEL, "Introduction", in: John Higley/Gyorgy Lengyel (eds.): Elites after State Socialism. Theories and Analysis, Lanham: Rowman & Littlefield, 2000, pp. 1-24, p. 6.

(23) Tony VERHEIJEN, "Administrative Reform: Public Administration in Post Communist States", in: Guy B. PETERS/Jon PIERRE, (eds.), Handbook of Public Administration, London: Sage, 2003, p. 489-497, p. 490.

(24) Zsolt K. LENGYEL, "Politisches System and Minderheiten in Rumanien 1918-1989", in: Zeitschrift fur siebenburgische Landeskunde, 24 (2001) 2, pp. 190-212, p. 199.

(25) Gabriel BADESCU/Paul. E. SUM, "Historical Legacies, Social Capital and Civil Society: Comparing Romania on a Regional", in: Europe-Asia Studies, 57 (2005) 1, pp. 117-133.

(26) Christopher HAMILTON/Wojciech ROSZKOWSKI, "Bureaucratic Poland: Organized Life inside the Maverick Society", in: Jaroslaw Piekalkiewicz/ Christopher Hamilton (eds.), Public Bureaucracies between Reform and Resistance. Legacies, Trends, and Effects in China, USSR, Poland and Yugoslavia, New York: St. Martin's Press, 1992, pp. 131-178, p. 139.

(27) See Ken JOWITT, "The Leninist Legacy", in: Ken Jowitt (ed.), New World Disorder: The Leninist Extinction, Berkeley: University of California Press, 1992, pp. 284-305.

(28) Barbara LIPPERT/ Gaby LIMBACH, The Pressure of Europeanisation: From Post-Communist State Administrations to Normal Players in the EU System, Baden-Baden; Nomos, 2005, p. 71. Georg BRUNNER "Verwaltungsstrukturen in den kommunistischen Einparteidiktaturen Osteuropas, in: Erk. V. Heyen, (ed.), Die offentliche Verwaltung im totalit5ren System, Baden-Baden: Nomos, 1998, pp. 153-182, p. 161; Stanley VANAGUNAS, Civil Service Reform in the Baltics, paper prepared for presentation at Civil Service Systems in Comparative Perspective, School of Public and Environmental Affairs, Indiana University, Bloomington, Indiana, April 5-8, 1997.

David COOMBES, Politics and Bureaucracy in the Modern Administrative State: Comparing Western and Eastern Europe, in: Tony VERHEIJEN (ed.): Politico-Administrative Relations: Who rules?, Bratislava: NISPAcee, 2001 p. 26-44, p. 36.

(29) James H. ANDERSON, /Cheryl W. GRAY (2007): Transforming Judicial Systems in Europe and Central Asia, Washington: Worldbank paper, http://siteresources.worldbank.org/INTECA/Resources/ABCDE.pdf.

(30) Ed CLARK/Anna SOULSBY, "Transforming Former State Enterprises in the Czech Republic", in: Organization Studies, 16 (1995) 2, pp. 215-242, p 223.

(31) EKIERT, Grzegorz/ Stephen. E. HANSON, "Time, Space and Institutional Change in Central and Eastern Europe", in: Grze-gorz Ekiert/Stephen. E.Hanson (eds.), Capitalism and Democracy in Central and Eastern Europe: Assessing the Legacy of Commun-ist Rule, Cambridge, New York: Cambridge University Press, 2003, pp. 15-48, p. 29.

(32) Barbara LIPPERT/ Gaby LMBACH, The Pressure of Europeanisation: From Post-Communist State Administrations to Normal Players in the EU System, Baden-Baden; Nomos, 2005, p. 74.

(33) On the role of initial conditions see Martha DE MELO/DENIZER, Cevdet/Alan GELB/Stoyan TENEV, "Circumstances and Choice: The Role of Initial Conditions and Policies in Transition Economies", World Bank Policy Research Working Paper (1998) no. 1866; FISCHER, Stanley/ Alan GELB, "The Process of Socialist Economic Transformation", in: Journal of Economic Perspectives, 5 (1991) 4, pp. 91-105; Oleh HAVRYLYSHYN/Ron VAN ROODEN, "Institutions Matter in Transition but so do Policies", IMF Working Paper no. WP/00/70, 1999.

(34) Wade JACOBY, "Tutors and Pupils: International Organizations, Central European Elites and Western Models", in: Gover-nance, 14 (2001) 2, pp. 169-200; Ronald H. LINDEN, Norms and Nannies: The Impact of International Organizations on the Central and East European States, Lanham: Rowman & Littlefield, 2002; Randall W. STONE, Lending Credibility: The International Mone-tary Fund and the Post Communist Transition, Princeton: Princeton University Press, 2002; Janine R.WEDEL, Collision and Collu-sion: The Strange Case of Western Aid to Eastern Europe, London: Macmillan, 1998.

(35) Lucian CERNAT, Europeanization, Varieties of Capitalism, and Economic Performance in CEECs, Basingstoke, New York: Pal-grave Macmillan 2006, p. 127 and p. 161.

(36) The only exception made Bulgaria with approx. 40% in the year 2002 an 2003. Data extracted on 13 Oct 2009 10:53 UTC (GMT) from OECD.Stat.

(37) EU Commission 2006 Support to Public Administrative and Judicial Capacity in Bulgaria and Romania. Thematic Evaluation Report of the European Union Phare Programme

(38) Heather GRABBE, "How does Europeanization Affect CEE Governance? Conditionality, Diffusion and Diversity", in: Journal of European Public Policy, 8 (2001) 6, pp.1013-1031; Frank SCHIMMELFENNIG/Ulrich SEDELMEIER (eds.), The Europeanization of Central and Eastern Europe, Ithaca: Cornell University Press, 2005; Barbara UPPERT/Gaby UMBACH/Wolfgang WESSELS, "Europeanization of the CEE Executives: EU Membership Negotiations as a Shaping Power", in: Journal of European Public Policy, 8 (2001) 6, pp. 980-1012; Geoffrey PRIDHAM, "Romania and EU Membership in Comparative Perspective: A Post-Accession Compliance Problem?--The Case of Political Conditionality", in: Perspectives on European Politics and Society, 8 (2007) 2, pp. 168--188; Geoffrey PRIDHAM, "Romania and EU Membership in Comparative Perspective: A Post-Accession Compliance Problem?--The Case of Political Conditionality", in: Perspectives on European Politics and Society, 8 (2007) 2, pp. 168-188; Milada Anna VACHUDOVA, Europe Undivided. Democracy, Leverage, and Integration After Communism, Oxford: Oxford University Press, 2005.

(39) "Maarten VINK/Paolo GRAZIANO, Introduction, in: Paolo GRAZIANO/Maarten VINK (eds.): Europeanization: A Handbook for a New Research Agenda, Houndmills: Palgrave Macmillan, pp. 1-38, p. 4.

(40) Frank SCHIMMELFENNIG/Ulrich SEDELMEIER (eds.), The Europeanization of Central and Eastern Europe, Ithaca: Cornell University Press, 2005, p. 1.

(41) Kevin FEATHERSTONE, "Introduction: In the Name of Europe", in: Kevin FEATHERSTONE/Claudio M. RADAELLI (eds), The Politics of Europeanization, Oxford: Oxford University Press, 2003, pp. 3-26, p. 7.

(42) Peter MAIR, "The Europeanization Dimension", in: Journal of European Public Policy, 11 (2004) 2, pp. 337-348, p. 341.

(43) Claudio M. RADAELLI, "The Europeanization of Public Policy', in: Kevin FEATHERSTONE/Claudio M. RADAELLI (eds), The Politics of Europeanization, Oxford: Oxford University Press, 2003, pp. 27-56, p. 30.

(44) Claudio M. RADAELLI, "Europeanisation: Solution or problem?", in: European Integration online Papers (EIoP), 8 (2004)16, http://eiop.or.aVeiop/texte/2004016a.htm. Antoaneta L. DIMITROVA, "Europeanization and Civil Service Reform in Central and Eastern Europe", in: Frank Schimmelfennig/UIrich Sedelmeier (eds.), The Europeanization of Central and Eastern Europe, Ithaca: Cornell University Press, 2005, pp. 71-90, p. 71. PAPADIMITRIOU, D./PHINNEMORE, D., "Europeanization, Conditionali-ty and Domestic Change: The Twinning Exercise and Administrative Reform in Romania", in: Journal of Common Market Studies, 42 (2004) 3, pp. 619-639, p. 623.

(45) Administrative capacity refers to sectoral capacity (capacity to implement the specific areas of the aquis) and to a horizontal capacity (general reform of administrative structures and the judiciary system). See Antoaneta L. DIMITROVA, "Enlargement, Institution Building and the EU's Administrative Capacity Requirement", in: West European Politics, 25 (2002) 4, pp. 171-190.

(46) The relevant literature on the Europeanization of administrative reforms is: GOETZ, Klaus "Making Sense of Post- Communist Central Administration. Modernization, Europeanization or Latinisation?", in: Journal of European Public Policy, vol. 8 (2001) 6, pp. 1032- 1051; Barbara NUNBERG, The State After Communism: Administrative Transitions in Central and Eastern Europe, Washington, D.C.: The World Bank, 1999; Heather GRABBE, "How does Europeanization Affect CEE Governance? Conditionality, Diffusion and Diversity", in: Journal of European Public Policy, 8 (2001) 6, pp.1013-1031; Barbara LIPPERT/ Gaby LIMBACH, The Pressure of Europeanisation: From Post-Communist State Administrations to Normal Players in the EU System, Baden-Baden; Nomos, 2005, p. 178.

(47) see Frank SCHIMMELFENNIG/Ulrich SEDELMEIER (eds.), The Europeanization of Central and Eastern Europe, Ithaca: Cornell Uni-versity Press, 2005.

(48) Antoaneta. L. DIMITROVA, "Europeanization and Civil Service Reform in Central and Eastern Europe", in: Frank Schimmelfennig/Ulrich Sedelmeier (eds.), The Europeanization of Central and Eastern Europe, Ithaca: Cornell University Press, 2005, pp. 71-90, p. 80.

(50) Heather GRABBE, "How does Europeanization Affect CEE Governance? Conditionality, Diffusion and Diversity", in: Journal of European Public Poliq, 8 (2001) 6, pp.1013-1031, p. 1020ff.

(51) Heather GRABBE, "How does Europeanization Affect CEE Governance? Conditionality, Diffusion and Diversity", in: Journal of European Public Poliq, 8 (2001) 6, pp.1013-1031, p. 1023.

(52) Tanja A. BORZEL/Thomas RISSE, "When Europe Hits Home. Europeanisation and Domestic Change", in: European Integration online Papers (EIoP), 4 (2000)15, pp. http://eiop.or.at/eiop/texte/2000-015a.htm; Christoph KNILU Dirk LEHMKUHL, "How Europe matters: Different Mechanisms of Europeanization", in: European Integration on-line Papers, 3 (1999) 7, pp. 1-19. http://eiop.or.aVeiop/texte/1999-007a.htm.

(53) Tanja A. BORZEL/Thomas Risse, "Conceptualizing the Domestic Impact of Europe", in: Kevin FEATHERSTONE/Claudio M. RADAELLI (eds), The Politics of Europeanization, Oxford: Oxford University Press, 2003, pp. 57-82, p. 61.

(54) Claudio M. RADAELU, "Europeanisation: Solution or problem?", in: European Integration online Papers (EIoP), 8 (2004)16, p. 7. http://eiop.or.aVeiop/texte/2004-016a.htm.

(55) Tanja A. BORZEL/Thomas Risse, "Conceptualizing the Domestic Impact of Europe", in: Kevin FEATHERSTONE/Claudio M. RADAELLI (eds), The Politics of Europeanization, Oxford: Oxford University Press, 2003, pp. 57-82, p. 63.

(56) Frank SCHIMMELFENNIG/Ulrich SEDELMEIER (eds.), The Europeanization of Central and Eastern Europe, Ithaca: Cornell University Press, 2005, p. 10.

(56) Milada Anna VACHUDOVA, Europe Undivided. Democraq, Leverage, and Integration After Communism, Oxford: Oxford Univer-sity Press, 2005, p. 7.

(57) Heather GRABBE, "How does Europeanization Affect CEE Governance? Conditionality, Diffusion and Diversity", in: Journal of European Public Policy, 8 (2001) 6, pp.1013-1031, p. 1025.

(58) Antoaneta L. DIMITROVA, "Enlargement, Institution Building and the EU's Administrative Capacity Requirement", in: West European Politics, 25 (2002) 4, pp. 171-190, p. 186; Daniela PIANA, "The Power Knocks at the Courts' Back Door. Two Waves of Postcommunist Judicial Reforms", in: Comparative Political Studies, 42 (2009) 6, pp. 816-840, p. 823.

(59) Barbara LIPPERT/ Gaby LIMBACH, The Pressure of Europeanisation: From Post-Communist State Administrations to Normal Players in the EU System, Baden-Baden; Nomos, 2005, p. 178.

(60) SIGMA stands for Support for Improvement in Governance and Management in CEEC. It was established in 1992 as a joint cooperation programme of the OECD and the EU's PHARE programme.

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(63) Tanja A. BORZEL, How the European Union Interacts with its Member States, Institut fur H6here Studien Political Science Series (2003)93, p. 18.

(64) Maarten VINK/Paolo GRAZIANO, Introduction, in: Paolo GRAZIANO/Maarten VINK (eds.): Europeanization: A Handbook for a New Research Agenda, Houndmills: Palgrave Macmillan, pp. 1-38.

(65) Markus HAVERLAND, "Does the EU Cause Domestic Developments? The Problem of Case Selection in Europeanization Research", in: European Integration online Papers (EIoP), 9 (2005) 2, pp. 1-14. http://eiop.or.at/eiopAexte/2005-002a.htm.

(66) COMMISSION COMPOSITE PAPER, Reports on Progress towards Accession by Each of the Candidate Countries, European Commission, 1999.

(67) Antoaneta L. DIMITROVA, "Europeanization and Civil Service Reform in Central and Eastern Europe", in: Frank Schimmelfennig/Ulrich Sedelmeier (eds.), The Europeanization of Central and Eastern Europe, Ithaca: Cornell University Press, 2005, pp. 71-90, p. 85.

(68) Iveta REINHOLDE, Challenges for Latvian public administration in the European Integration process, in: Antoaneta. L. Dimitrova, A. L. (ed.): Driven to Change. The European Union's Enlargement viewed from the East, Manchester: Manchester University Pres, 2004, pp.163-178, p. 164; Tony VERHEIJEN, Administrative Capacity in the new EU Member States. The Limits of Innovation?, Washington, D.C: The World Bank, 2007, p. XI.

(69) Stanley VANAGUNAS, Civil Service Reform in the Baltics, paper prepared for presentation at Civil Service Systems in Comparative Perspective, School of Public and Environmental Affairs, Indiana University, Bloomington, Indiana, April 5-8, 1997, p. 13.

(70) Calin HINTEA/Sorin Dan SANDOR/Veronica JUNJAN, "Administrative Reform in Romania and the European Union", in: Antoaneta L. DIMITROVA, (ed.), Driven to Change. The European Union's Enlargement Viewed from the East, Manchester: Man-chester University Press, 2004, p. 145-162, p. 152.

(71) Milada Anna VACHUDOVA, Europe Undivided. Democracy, Leverage, and Integration After Communism, Oxford: Oxford Univer-sity Press, 2005, p. 200.

(72) Anna GRZYMALA-BUSSE, Rebuilding Leviathan: Party Competition and State Exploitation in Postcommunist Democracies. Cam-bridge: Cambridge University Press, 2007; Conor O'DWYER, Runaway State-building: Patronage Politics and Democratic Devel-opment, Baltimore, MD: Johns Hopkins University Press, 2006.

(73) "EUROPEAN COMMISSION 2004, 2004 Regular Report on Bulgaria's progress towards accession; EUROPEAN COMMISSION 2005, Roma-nia 2005 Comprehensive Monitoring Report.

(74) EUROPEAN COMMISSION 2004, 2004 Regular Report on Bulgaria's progress towards accession.

(75) EUROPEAN COMMISSION 2001, 2001 Regular Report on Hungary's Progress Towards Accession, p. 16.

(76) Alexandru-Leonard IONITA/Annette FREYBERG-INAN, "Public Administration Reform in the Context of European Integra- tion: Continuing Problems of the Civil Service in Romania", in: Southeast European and Black Sea Studies, 8 (2008) 3, pp. 205-226.

(77) Jan-Hinrik MEYER-SAHLING, "The Bumpy Road to Depoliticization: Civil Service Reform in Postcommunist Europe", in: West European Politics, 27 (2004) 1, pp. 69-101; Jan-Hinrik MEYER-SAHLING, "The Changing Colours of the Post-communist State: The Politicisation of the Senior Civil

Service in Hungary", in: European Journal of Political Research, 47 (2008) 1, pp. 1-33.

(78) Miro HACEK,'The Relationship between Civil Servants and Politicians in a Post-Communist State: A case of Slovenia", in: Public Administration, 84 (2006) 1, pp. 165-184.

(79) OlgaVIDLAKOVA, "Performance and Regulation in Public Administration", paper presented at the conference A Performing Public Sector, Leuven University, Belgium, 1-3 June, 2006. http://soc.kuleuven.belo/performance/paper/WS2/WS2 Olga%20Vidlakova.pdf

(80) Tony VERHEIJEN, Administrative Capacity in the new EU Member States. The Limits of Innovation?, Washington, D.C: The World Bank, 2007, p. 11.

(81) Alexandru-Leonard IONITA/Annette FREYBERG-INAN, "Public Administration Reform in the Context of European Integra- tion: Continuing Problems of the Civil Service in Romania", in: Southeast European and Black Sea Studies, 8 (2008) 3, pp. 205-226.

(82) Tony VERHEIJEN, Administrative Capacity in the new EU Member States. The Limits of Innovation?, Washington, D.C: The World Bank, 2007, p. 35.

(83) Tony VERHEIJEN, Administrative Capacity in the new EU Member States. The Limits of Innovation?, Washington, D.C: The World Bank, 2007.

(84) Geoffrey PRIDHAM, Designing Democracy: EU Enlargement and Regime Change in Post-Communist Europe, Basingstoke: Pal-grave Macmillan, 2005; Alexandru-Leonard IONITA/Annette FREYBERG-INAN, "Public Administration Reform in the Context of European Integration: Continuing Problems of the Civil Service in Romania", in: Southeast European and Black Sea Studies, 8 (2008) 3, pp. 205-226; Tony VERHEIJEN, Administrative Capacity in the new EU Member States. The Limits of Innovation?, Washington, D.C: The World Bank, 2007.

(85) Alexandru-Leonard IONITA/Annette FREYBERG-INAN, "Public Administration Reform in the Context of European Integra- tion: Continuing Problems of the Civil Service in Romania", in: Southeast European and Black Sea Studies, 8 (2008) 3, pp. 205-226, p. 173.

(86) Alexandru-Leonard IONITA/Annette FREYBERG-INAN, "Public Administration Reform in the Context of European Integra- tion: Continuing Problems of the Civil Service in Romania", in: Southeast European and Black Sea Studies, 8 (2008) 3, pp. 205-226, p. 221.

(87) Calculation based on the data provided by Council of Europe. See COUNCIL OF EUROPE, European judicial systems Edition 2008 (data 2006): Efficiency and quality of justice, 2008; COUNCIL OF EUROPE, European judicial systems Edition 2006 (data 2004): Efficiency and quality of justice, 2006; COUNCIL OF EUROPE, European judicial systems Edition 2002 Facts and figures on the basis of a survey conducted in 40 Council of Europe Member States, 2002.

(88) Geoffrey PRIDHAM, "Romania and EU Membership in Comparative Perspective: A Post-Accession Compliance Problem?--The Case of Political Conditionality', in: Perspectives on European Politics and Society, 8 (2007) 2, pp. 168-188, p. 182.

(89) Geoffrey PRIDHAM, "Romania and EU Membership in Comparative Perspective: A Post-Accession Compliance Problem?--The Case of Political Conditionality', in: Perspectives on European Politics and Society, 8 (2007) 2, pp. 168-188, p. 179.

(90) Daniela PIANA, 'The Power Knocks at the Courts' Back Door. Two Waves of Postcommunist Judicial Reforms", in: Com- parative Political Studies, 42 (2009) 6, pp. 816-840, p. 835.

(91) Daniela PIANA, 'The Power Knocks at the Courts' Back Door. Two Waves of Postcommunist Judicial Reforms", in: Com- parative Political Studies, 42 (2009) 6, pp. 816-840, p. 818.

(92) EUROPEAN COMMISSION 2006, Bulgaria. May 2006 Monitoring Report, p. 5; EUROPEAN COMMISSION 2006, Romania. May 2006 Monitoring Report, p. 7.

(93) EUROPEAN COMMISSION 2005, Bulgaria. 2005 Comprehensive Monitoring Report, p. 10.

(94) Report from the Commission to the European Parliament and the Council on accompanying measures following Acces- sion, Brussels, 27.6.2007.

(95) Geoffrey PRIDHAM, "Romania and EU Membership in Comparative Perspective: A Post-Accession Compliance Problem?--The Case of Political Conditionality", in: Perspectives on European Politics and Society, 8 (2007) 2, pp. 168-188, p. 182, p. 178.

(96) Sorana PARVULESCU/ Bogdan VETRICI-SOIMU, Evaluating EU Democratic Rule of Law Promotion: Country report--Romania, Bucharest: National Association of the Romanian Bars, 2005, p. 11.

(97) Already the internal market scoreboard--a benchmarking study which evaluates institutional compliance of internal market directives--has revealed a gap between rule transfer (decreasing transposition deficit) and rule implementation (increasing infringement cases). See http://ec.europa.eu[internal market/score~index en.htm#score.
Table 1: EBRD Initial
Conditions Index

Country     Index
            Value

Czech         3.5
Republic
Hungary       3.3
Slovenia      3.2
Slovakia      2.9
Bulgaria      2.1
Poland        1.9
Romania       1.0
Lithuania     0.0
Latvia       -0.2
Estonia      -0.4

Source: EBRD Transition Report, 1999, p. 29.

Note: The initial conditions index is a weighted average of different
indicators which represents the starting conditions at the turn of
the 1990s. A higher the index value reflects better structural
conditions at the start of transition. The structural indicators
include: GDP per capita in 1989, pre-transition growth rate,
urbanization rate, rate of over industrialization, endowment with
natural resources, years spent under central plaru1ing, distance to
the EU, trade dependence on the CMEA, macroeconomic disequilibria.

Table 2: Composite governance quality indicator

                 1987   1988   1999   1990   1991   1992   1993

Bulgaria         3.67   3-67   3.33   3.33   3.33   3.67   4.00
Czechoslovakia   3.67   3.67   3.67   3.67   4.33   4.33   4.33
Hungary          4.00   4.00    400   4.00   4.33   4.33   4.33
Poland           3.00   3.00   3.00   3.00   4.00   4.33   4.67
Roinania         1.33   1.33   1.33   1.33   2.67   2.67   3.00

Source: ICRG, PRS group

Note: The composite governance indicator is the average of three
indicators (Bureaucracy Quality, Corruption, Law & Order). Higher
values on a scale 0-6 indicate higher governance qualify.

Table 3: Twinning projects per sector in SEE, 1998/2000-2005

                                       Helsinki group

Sector                             CZ   EST   HU   SI   PL

Public Finance & Internal market   14    11    8    9   27
Justice & Home Affairs             26    18   14   10   27

                                      Luxembourg group

Sector                             BG   RO   LV   LT   SK

Public Finance & Internal market   34   42   14   17   10
Justice & Home Affairs             42   50   18   18   18

Source: Twinning. Key Facts and Figures 2006, presentation by the
Twinning and Sigma Coordination Team, Institution Building Unit.

Table 4: Bureaucracy Quality (merit-based and non politicized
bureaucracy)

                   1999   2000   2001   2002   2003

Luxembourg group
Czech Republic      3      3      3      3      3
Estonia             3      3      3     2.5    2.5
Hungary             4      4      4      4      4
Slovenia            3      3      3      3      3
Poland              3      3      3      3      3

Helsinki group

Bulgaria            2      2      2      2      2
Latvia              2      2      2     2.5    2.5
Lithuania           2      2      2     2.5    2.5
Slovakia            3      3      3      3      3
Romania             1      1      1      1      1

                   2004   2005   2006   2007   2008

Luxembourg group
Czech Republic      3      3      3      3       3
Estonia            2.5    2.5    2.5    2.5     2.5
Hungary             4      3      3      3       3
Slovenia            3      3      3      3       3
Poland              J      3      J      3       3

Helsinki group

Bulgaria            2      7      2      2       2
Latvia             2.5    2.5    2.5    2.5     2.5
Lithuania          2.5    2.5    2.5    2.5     2.5
Slovakia            3      3      3      3       3
Romania             1      1      1      1       1

Source: ICRG, PRS group

Note: High points are given to countries where the bureaucracy has the
strength and expertise to govern without drastic changes in policy
or interruptions in government services. In these low-risk countries,
the bureaucracy tends to be somewhat autonomous from political
pressure and to have an established mechanism for recruitment and
training. For instance, Germany, Sweden or Great Britain have a very
good quality of bureaucracy and have received 4 points.

Table 5: Favoritism in decisions of government officials

                   2002   2003   2004   2005   2006   2007   2008

Luxembourg group

Czech Rep.         2.8    2.9    3.1    3.1     3     2.7    2.5
Estonia            3.6    3.7     4     3.6    3.6    3.5    3.5
Hungary            3.1    2.9    2.9    2.8    2.7    2.6    2.4
Slovenia           3.6    3.4    3.3    3.2    3.3    3.4    3.2
Poland             2.6    2.9    2.1    2.6    3.4    3.1    2.5

Helsinki group

Bulgaria           2.7    2.3    2.3    2.3    2.2    2.4    2.4
Latvia             3.1    3.8    3.1     3      3     2.9    2.9
Lithuania          3.6    3.6    3.5    3.1    2.6    2.9    2.9
Slovakia           2.5    2.6    2.3    2.5    2.8    2.6    2.3
Romania            2.1     2     2.6    2.5    2.2    2.3    2.4

Source: World Economic Forum. The Global Competitiveness Report

Average responses of business executives surveyed to the following
question (scale of 1 to 7): When deciding upon policies and confracts,
government officials: 1 = usually favor well-connected firms and
individuals, 7 = are neutral among firms and individuals.

Table 6: Irregular payments to government officials

                   2000   2001   2002   2003   2004   2005   2006

Luxembourg group

Czech Rep.         4.92   5.08   5.83   3.95   6.3     --    6.17
Estonia            6.91   7.32   7.38   7.86   7.8    7.31   7.59
Hungary            7.35   6.73    7     6.93   7.3    7.27   6.27
Slovenia           6.58   7.43   7.36   7.83   7.8    8.27   7.83
Poland             5.6    4.72   5.55   5.17   5.5    5.33   5.59

Helsinki group

Bulgaria           6.57   7.44   6.79   7.45   7.2    7.42   5.46
Latvia             5.84   5.44    6     5.98   5.8    6.44   6.18
Lithuania          8.29   8.01   6.67   6.81   6.9    6.86   6.21
Slovakia           6.47   5.06   5.6     6     6.3     --    6.32
Romania            5.18   3.84   3.48   4.81    5     5.18   5.14

Source: World Economic Forum's Global Competitiveness Report

Irregular, additional payments connected with import and export
permits, business licenses, exchange controls, tax assessments,
police protection, or loan applications are very rare. The
indicator is normalized from 0 to 10 with higher scores indicating
lower levels of irregular addition payments. This indicator
is a subcomponent of the Regulation of Credit, Labor, and Business
dimension of the Index of Economic Freedom.

Table 7: Annual budget allocated to all courts and
prosecution per inhabitant (EUR)

                   2002   2004   2006   change (%)

Luxembourg group
                    21     29     28       +33
Czech Rep.          12     18     24       +100
Estonia             27     38     39       +44
Hungary             51     34     75       +47
Slovenia            17     27     39       +129
Poland

Helsinki group

Bulgaria            4      9      12       +200
Latvia              7      14     22       +214
Lithuania           10     18     25       +150
Slovakia            11     20     27       +145
Romania            7.8     9      17       +118

Source: Council of Europe

Table 8: Judicial independence

                   2002   2003   2004   2005   2006   2007   2008

Luxembourg group

Czech Rep.         3.9    4.2    4.5    4.3    3.8    4.1    4.2
Estonia            4.7    5.3    5.5    4.7    5.3    5.3    5.3
Hungary            4.4    4.9    4.6    4.3    4.2    4.4    4.3
Slovenia             5    4.3    3.9      4    4.5    4.5    4.2
Poland             3.7    3.9    3.1    3.4    3.5    3.5    3.7

Helsinki group

Bulgaria           2.9    2.7    2.7    2.5    2.5    2.8    2.0
Latvia             3.5    4.2    3.4    3.5    3.8    3.8    3.8
Lithuania          3.1    3.3    3.3    2.8    3.4    3.6    3.8
Slovakia           3.2    3.2    3.6    3.3    3.6    3.6    3.7
Romania            2.7    2.4    3.0    2.6    2.9    3.1    3.3

Source: World Economic Forum's Global Competitiveness Report

Note: 1=lowest; 7=highest; Average responses of business executives
surveyed to the following question (scale of 1 to 7): The judiciary
in your country is independent from political influences of members
of government, citizens or firms: 1=no, heavily influenced; 7=yes,
entirely independent.

Table 9. Irregular payments in judicial decisions

                   2003   2004   2005   2006

Luxembourg group

Czech Rep.         4.5    4.5    4.7     5
Estonia            5.4    3.3    3.4    5.5
Hungary            3.3    5.1    5.3    5.4
Slovenia           3.3    5.8    3.6    5.9
Poland             4.2    3.9    4.3    4.3

Helsinki group

Bulgaria           4.7    5.2    5.1    5.2
Latvia             4.2     4     3.9    4.6
Lithuania          1.1    4.4    4.4    4.7
Slovakia           3.4    3.7    3.7    4.2
Romania            2.8    3.4    3.6    3.9

Source: World Economic Forum's Global Competitiveness Report

Note: Average responses of business executives surveyed to the
following question (scale of 1 to 7): In your industry, how
commonly would you estimate that firms make undocumented extra
payments or bribes connected with getting favorable judicial
decisions? 1=common; 7=never occurs.
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