Do We Need New Methodology in Macroecono

ISSN 2081- 9633
Warsaw Forum of Economic Sociology

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WFES Warsaw Forum

of Economic Sociology
Volume 1 Number 1 January 2010 Pages 1 – 560

Volume 1 Number 2 (2) Autumn 2010
Warsaw School of Economics


Collegium of Socio-Economics – Department of Economic Sociology
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WARSAW FORUM OF ECONOMIC SOCIOLOGY – WFES
Editorial Board:
Juliusz Gardawski (Chief Editor, Warsaw School of Economics),
David Ost (Hobart and William Smith Colleges),
Guglielmo Meardi (University of Warwick, Warwick Business School),
Jan Czarzasty (Warsaw School of Economics),
Horacy Dębowski (Warsaw School of Economics),
Krzysztof Kozłowski (Warsaw School of Economics).
Advisory Board:
Sabina Avdagic (University of Sussex),
Katharina Bluhm (University of Osnabrück),
Leszek Gilejko (Alexander Gieysztor Academy of Human Sciences),
Jarosław Górniak (Jagiellonian University in Cracow, Institute of Sociology),
Urszula Grzelońska (Warsaw School of Economics),
Jerzy Hausner (Cracow University of Economics),
Krzysztof Jasiecki (Polish Academy of Science – Institute of Philosophy and Sociology),
Wiesława Kozek (Warsaw University, Faculty of Sociology),
Jolanta Kulpińska (University of Łódź),
Maria Matey-Tyrowicz (Polish Academy of Science – Institute for Legal Studies),
Witold Morawski (Warsaw University, Faculty of Sociology),
Maria Nawojczyk (University of Science and Technology in Cracow, Faculty of Humanities),
Wojciech Pacho (Warsaw School of Economics),
Bazyli Samojlik (Warsaw School of Economics),
Andrzej Sławiński (Warsaw School of Economics),
Mieczysław Socha (Warsaw University, Faculty of Economics),
Zbigniew Staniek (Warsaw School of Economics),
Sławomir Sztaba (Warsaw School of Economics),
Urszula Sztandar-Sztanderska (Warsaw University, Faculty of Economics),
Rafał Towalski (Warsaw School of Economics),
Victor Zhukov (Shevchenko National University of Kiev, Faculty of Sociology).
Editorial Assistants:
Czesława Kliszko,
Małgorzata Madej
Submission of articles:
Department of Economic Sociology,
Wiśniowa 41, 02-520 Warsaw, PL
Website: http://www.sgh.waw.pl/wfes
e-mail: wfes@sgh.waw.pl
tel. +48 22 564 9112
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WFES Warsaw Forum
of Economic Sociology

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Contents
In this Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Bogusław Czarny
Ecomomics as an Empirical Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Marek Garbicz
Slight Crisis of Mainstream Economics? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Wojciech Pacho
Do we Need New Methodology in Macroeconomics? . . . . . . . . . . . . . . . . . . . . 43
Leszek Gilejko
Sectoral Interest Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Juliusz Gardawski, Guglielmo Meardi

Keep Trying? Polish Failures and Half-successes in Social Pacting . . . . . . . . 69
David Ost
Illusory Corporatism in Eastern Europe: Neoliberal Tripartism
and Postcommunist Class Identities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Joachim Osiński
Constitution of the Republic of Poland as the Foundation
of Democratic Society and State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Instructions for authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

In this Issue
Having delivered the initial issue of the Warsaw Forum of Economic Sociology
(WFES), we are happy to present our sophomore effort. In this edition, we would like
to turn the attention of our readers to two fields: mainstream economics and social,
as well as civic, dialogue.
The issue contains eight articles, which have been divided into two main
thematic blocks. The first block consists of three articles associated with mainstream
economics.
Bogusław Czarny forwards questions which may seem trivial but eventually
turn out to be challenging and inspirational: what is economics and what does it
exactly mean that economics is an empirical science? The author discusses basic
epistemological and methodological issues along with the problems of rhetorical
nature encountered by economists, peculiarities of economics, and future directions
for economic research.
Marek Garbicz adds another set of reflections on the crisis of mainstream
economics, arguing that the discipline has reached its methodological turning point
with the neoclassical paradigm being steadily challenged. The author argues the need
for close interdisciplinary cooperation in studying subjects traditionally at the centre
of economist interest.
Wojciech Pacho confronts readers with another essential question asking
whether we need a new methodology in macroeconomics. The author concludes that
contemporary macroeconomics stands at a methodological crossroads, and focuses
on the weaknesses of the Representative Agent Model.
The second block comprises of four articles that are related to social dialogue
and civil society.
We begin with two previously published articles, by David Ost and by Juliusz
Gardawski and Guglielmo Meardi, in order to present a broader context of ongoing
6 In this Issue
discussions concerning social dialogue and social partnership in Poland and Central
and Eastern Europe (CEE).
David Ost’s seminal article (which was first published in 2001) examines the
nature of neo-corporatism introduced in CEE after 1989. The author dismisses
the regional mutation of neo-corporatism as ‘illusory’. The thesis presented in the
article, conceived by some as controversial, sparked discussions on the true nature
of relations between governments and “social partners” in the region (Ost objects to
the assumption of equality implicit in the term). Although published 10 years ago,
the article remains an important frame of reference, frequently employed in the
debate on social dialogue in the region. We include the paper in order that it serve
as a starting point for future discussions on tripartism and social partnership in the
following issues of WFES.
Juliusz Gardawski and Guglielmo Meardi describe the meanderings of Polish
social dialogue and analyze several attempts to conclude a national-level social pact.
Acknowledging that the results of social pacting thus far have been moderate, the
authors insist on the continued need for such an agreement. They combine a broad
theoretical approach, introduced to the discussion concerning social dialogue by
Ost, with specific empirical studies, in order to characterize the evolution of social
partnership in Poland since 1994. They presented the outcomes of these studies in
the international conference on “European Social Pacts and Social Partnership,”
organized by the Warsaw School of Economics in October 2010, and intend to
examine further developments of social dialogue in Poland in subsequent issues of
this journal.
Leszek Gilejko’s contribution deals with sectoral interest groups in modern
Poland and investigates how special interests pushed by various socio-occupational
groups affected industrial restructuring in the 1990s and 2000s.
Joachim Osiński provides readers with an account of the Polish constitutional
debate, which consumed a total of eight years before the adoption of the 1997
Constitution. The author explores the question of whether such a lengthy debate
caused more harm than good to the young democracy.
This second issue of WFES expands the field of debate by discussing such issues
as tripartite dialogue, social partnership, and civic society. These are important
topics of academic study not only in the domain of economic sociology but also in
other disciplines of social science, such as political economy and political science. In
future issues we plan to spread the debate even further, beginning with a discussion
on the forms of capitalism that have emerged in Central and Eastern Europe in recent
decades. We welcome contributions related to these topics.
WFES 1:2 2010
Ecomomics as an Empirical Science

Bogusław Czarny*
Abstract
The author seeks an answer to a complex question whether and on what conditions
economy may be considered an empirical science. In the first part, basic epistemological
and methodological issues along with the problems of rhetorical nature encountered by
economists are discussed. In the next part peculiarities of economics are explored, in
particular limited possibility of experimenting, uncertainty and generality of forecasts,
how research and publication of results influence an object of research and the linkages
between economics and human interests. Finally the future directions for economic
research are debated, especially, the possible potential of experimental economics and
observation, as well as whether and to what extent results of a research can be predicted
I. What is Economics?
Strange though it may seem it is not easy to say ‘What is economics?’ There are many
definitions (for example by Adam Smith, Alfred Marshall, Lionel Robbins).
1. Economics – the Science of Economic Management
In this paper I will stick to the following definition of economics: economics is a science
that collects and classifies the general knowledge of economic management (production
* Department of Economics II, Warsaw School of Economics.

8 Bogusław Czarny
and distribution of goods). Please notice that this definition excludes ‘technological
knowledge’ (such as for example the knowledge of methods of metal working by spin
forming) outside the scope of economics, which I consider, is of advantage.
The management, for its part, comprises the production of goods and their
distribution among different people. A good is anything that meets the needs:
a thing (e.g. a table, a 2 zloty coin), a service (e.g. haircut, or the performance
of Górecki’s Symphony of Sorrowful Songs), and legal rights (such as copyrights
or Coca-Cola trademark).
Picture 1. Place of economics among other sciences
I would like to add that economics by this definition is an empirical science (see
picture 1). What it means is, its theorems should be true, they should describe the real
process of management, and not be true in the logical sense only.
The empirical character of economics is well summarised by the classical
formulation made by Milton Friedman 50 years ago. Friedman says: ‘… theory is to
be judged by its predictive power for the class of phenomena which it is intended to
‘explain’. Only factual evidence can show whether it is ‘right’ or ‘wrong’ or, better,
tentatively ‘accepted’ as valid or ‘rejected’ (Friedman 1953). Therefore, the truthfulness
of an economist’s statement is decided by the observation of economic phenomena
and the effectiveness of actions based on this observation.
2. The Method of Economics
In studying the process of producing and distribution of goods, economists, like other
scientists, use the method that provides a tool of verification of the obtained results.
Picture 2 shows the operation of this specific ‘knowledge production machine’, which
economics is (see Woll: 16).
Ecomomics as an Empirical Science 9
The method is what sets apart the work of economists from the work of artists and
priests, who also claim they know the truth. Reasonable people can argue whether
they like paintings by Paul Klee and never reach an agreement. The existence of elves
is likewise an object of indeterminate debate. However, the figures concerning the
excess in state expenditure over the revenues during a budget year can be more or
less defined objectively, which means the truthfulness of economists’ knowledge is
verifiable by anyone who is properly prepared to do it.
Picture 2. How the economic knowledge is made
The economists’ method involves several subsequent actions. They are:

1) observation of economic process,
2) generalisation (induction),
3) drawing conclusions (deduction),
4) scientific critique.
10 Bogusław Czarny
Observation is a deliberate act of noting and recording something. An economist

observing the economy does not have to deal with facts alone. Firstly, observation is
a deliberate act; so in selecting the object of observation, economists refer themselves
to their knowledge. Secondly, by interpreting the results of observation, economists
refer themselves to their knowledge.
For instance, in 2004, some people only noticed Poland had an extremely high
unemployment rate (at the end of the year the official rate of unemployment was
nearly twice as big as in other European states). According to other observers,
however, the situation was less dramatic than it seemed, because outside the statistics
bloomed illegal, unofficial economy, and thousands of officially unemployed Poles
found employment there. Briefly, observation does not only consist in a passive
recording of the facts.
Terms, defi nitions and classifications are formed as a result of observation
and preliminary interpretation of the facts. Terms (names) mark phenomena and
enable people to transmit information. Definitions are precise characterisations or
explanations of the used terms. Their precision is necessary for example because it
enables unambiguous statements. Classifications categorize objects encompassed
by the definition. The objects are grouped so that the objects of one group be more
similar to each other from the point of view of our interest, than objects taken from
different groups.
Generalisation (induction). Based on the results of observations we can make
generalisations. Induction is the generalisation of the results of observation in order to
name the permanent regularities of economic actions of management. Generalisation
is followed by hypothesis. Unfortunately, generalisation does not usually produce
solid knowledge. For example, when the fact is that in all analysed countries the
augmentation of state expenditure beyond the level of state revenues caused the rise in
prices, one cannot draw a firm conclusion that budget deficit causes inflation, because
it could be different in another country. Let us not forget, however, that the bigger the
number of the countries in the study, the more probable the hypothesis gets.
Drawing conclusions (deduction). The next stage of creation of an economic
theorem is deduction. Deduction consists in drawing logical conclusions, thanks
to which we have assumptions to consider certain judgements (conclusions) true.
Deduction is drawing logical conclusions. Therefore, if deduction is based on true
assumptions it produces true knowledge in a logical sense.
The function of assumptions, from which conclusions can be drawn, may be
played by generalisations. Hypotheses about regularities that characterise the process
of economic management result from the conclusions and generalisations as well.
Hypotheses can become economic laws, meaning theorems deemed true, which
describe recurring relations between economic actions. Everything depends on the
degree of their confirmation in confrontation with the reality.
Observations of the economic processes, generalisations and conclusions result
in the establishment of economic theorems, which are systematised, logically
connected sets of laws, hypotheses, defi nitions and classifications formulated
in a language. The value of theorems is in explaining causes of phenomena and
sometimes making possible their forecast. The ability to formulate theories is
a proof of the science’s maturity.
Scientific critique. If the freedom of science is guaranteed, economic theories are
constantly subject to scientific critique. The critique consists in confronting economic
theory with the reality and subjecting it to logical analysis.
The critique leads to: confirmation of the theory, amendment or rejections. The
concord of the result of observations with the existent knowledge does not authorise
scientists to consider this knowledge true once and for all. In the future facts may
occur that will contradict the existing convictions. A persistent discord between the
data resulting from observations and the existing conclusions has radical effects. It
usually leads to the amendment of a fragment of the existing theory or substituting it
with another, challenging theory. It is for this reason that many scientists encourage
looking for facts that would not so much confirm an economic theory as challenge
it. Submitting hypotheses to the most challenging tests speeds up acquisition of solid
knowledge.
Of course, the work of economists also requires intuition, imagination and faith.
They come handy when we select the object of research, formulate theses, plan tests
and choose the manner of presenting what we have to say. This makes scientific work
art-like.
3. The Language of Economic Theory
Let us have a look at those characteristics of economists’ statements that hold back
the accumulation of solid knowledge about economy. The statements are ambiguous,
deviated, unclear and incontrovertible (see: Nowak 1985: 100). They impede
observational verification of the reliability of the expressed opinions.
Ambiguity means that different definitions of the same term are used at the
same time. It results from the existence of different definitions of the used name.
For example the statement: ‘Growth is a condition of wealth’ may be true or false,
12 Bogusław Czarny
depending on the definition of the term ‘growth’. If ‘growth’ means ‘the process
of growing of a man’, the statement is false. On the other hand, if ‘growth’ means
‘economic growth’, the statement is true because indeed, the wealth of a society
depends on the rate of production growth.
Another problem is deviation of the statements. Deviation means that an
important part of the statement was omitted, which makes it unverifiable. The
error of deviation is committed when a statement is incomplete, which makes it
unverifiable. For example the author of the statement: ‘A company maximalises
profits’ did not specify which company they meant. In effect the statement may be
true or false, depending on which firm is observed.
It happens sometimes that economists make unclear statements too. The lack of
clarity means the meaning of the term is not precisely defined. The lack of clarity
occurs when definitions of terms imprecisely attribute objects to names. For example,
Polish economists have not reached an agreement whether the term ‘galloping
inflation’ means a rise in prices whose rate exceeds 30%, 40%, or 50% year-on-year.
As a result, the dispute whether ‘Poland had galloping inflation in 1992’ is impossible
to determine. (In 1992 the annual inflation rate was 43%).
Finally, a vice in economists’ statements can be their incontrovertibility.
Incontrovertibility means that a statement is impossible to dispute because of the
language in which it was pronounced. Incontrovertibility (impossibility to faslify)
can be an effect of tautology of the statement or the use of names that do not have
any equivalent in objects. Tautology results from the definition of the used terms.
For example, observation constantly confirms the thesis that ‘the consumer pursues
happiness’. However, any act or behaviour, including suicide, can be considered
‘a pursuit of happiness’. On the other hand, the statement: ‘the productiveness of
labour of a male elf is approximately 34.6% higher that that of a female elf’ cannot
be proven false based on any observation, because we are not able to measure labour
productiveness of elves.
Ambiguity, deviation, lack of clarity and incontrovertibility impede observational
verification of the truthfulness of statements. As a result we get irrelevant disputes,
acceptance of false opinions and illusory explanations.
*
* *
Of course, many details of the picture of economics painted above raise doubts
and have been disputed for many years. Here are a few examples:
1. For centuries economists have been arguing about the meaning of the so-called
Hume’s Guillotine and the role of the ‘prescriptive statements’ in economics1.
The object of discussion in particular is the possibility of making value-free
‘positive economics’ usually opposed to normative economics that contains only
prescriptive judgements. The debates about this matter have been going on and on
at least since the mid-19th century, and the problem itself hasn’t been determined
once and for all yet2.
2. For many years economists have also argued whether the assumptions of
economics should be ‘realistic’. The question of discussion in particular has been
whether the assumptions used in deduction by authors of economic theorems
ought to or not ought to be a realistic reflection of reality. There are at least
three challenging positions on this matter. First, I mean the opinion, often
attributed to Milton Freidman that reality of assumptions, on which an economic
theorem is based, is of no importance. What is important, however, is that
the conclusions drawn from the theorem should be compatible with the reality
(instrumentalism). Secondly, there is the opposite position, which requires that
the assumptions faithfully describe the reality (realism). Thirdly, there is a middle
position, according to which the assumptions of economic theorem are idealised
(simplified) theories about economic processes. The most famous example of such
assumption is a statement that all actions of men are motivated solely materially,
in other words a man is an economic creature (in Latin: homo oeconomicus).
3. Yet another object of economists’ debate is the role of methodological
individualism in economics. According to the point of view of ‘methodological
individualists’ social phenomena should be explained in reference to the viewpoints
and decisions of individuals (see: Nowak 1985: 102; Nagel 1970: 458–469).
For instance, in the second half of 20th century this opinion took the form of
the quest for the so-called microfoundations of macroeconomics. The objective
of these efforts has been to explain all macroeconomic features of economy by
1 Hume’s Guillotine (Hume’s law) and Hume’s dictum is a recommendation of precise distinction
and restrictive division of facts and values. On the one hand, we have empirically verifiable or logical
descriptive statements, which say what ‘is’, what ‘was’ and what ‘will be’, and on the other hand
impossible to evaluate as true or false – prescriptive statements (about what ought to be) ‘what’s good,
and what’s bad’.
2 See, on this matter, for example (Czarny 2004).
14 Bogusław Czarny
referring to the rational behaviours of economic actors that have the character
assumed by microeconomy3.
My belief is the abovementioned controversies do not invalidate the image of the
science of economics presented on picture 2. I think all these ambiguities can easily
become and they indeed do so, an object of detailed research conducted as part of
economics in this sense. Speaking more directly, despite all reservations (suggestively
expressed for example by the advocates of the rhetorical approach to economcs,
including Deirdre McCloskey), I do not know a picture of economics which would
be more ‘thorough’ in the descriptive sense4. What’s more, I do not believe that some
other vision of economics could make it a more effective instrument of accumulating
solid knowledge of economic management.
4. Why is it so Bad, when it’s so Well?
The comments expressed so far may suggest that economics is a science very similar
to other empirical sciences, including natural sciences, such as physics, chemistry
or biology. But in reality, the methodological situation of social sciences, including
economics, is quite peculiar in comparison to natural sciences, which has been
emphasised by many authors since the times of Adam Smith.
Economics may be set apart from sociology and political science because it
manages somehow to provide rigorous, deductive theories of human action that are
almost wholly lacking in these other behavioural sciences (see: Blaug 1995: 14). But
on the other hand, economics has not so far managed to establish such a number of
useful theorems that would allow it to compete with natural sciences in the ability to
explain and predict phenomena. Neither can economists boast of such spectacular
3In this context it is worth to make a notice of the establishment at the end of 20th century of
a group of macroeconomic models which were part of the neoclassical economics, and in case of
which microeconomic methods of mathematical optimisation were applied in reference to singular
representative economic actor, whose actions next explained the operation of economy as a whole.
4 In the opinion of Deirdre McCloskey, the image of economics presented on picture 2 is not
realistic. The prevalence of a specific viewpoint in the course of an economists’ discussion does not
depend on the procedures presented on picture 2, but the persuasion applied by participants of the
debate. In arguing their points economists apply reasoning through analogy, metaphors, they refer
to authority, introspection, symmetry, etc. The objective of all these efforts is to persuade the listeners
to accept the speaker’s argumentation and reject someone else’s . Briefly, in McCloskey’s opinion the
reasons of accepting of economic theories have nothing to do with methodological rules referring to the
positivist ideas (McCloskey 1985: XVII–XVIII; 42; and all of chapter 4) [in Polish see also: (Czarny 2007)].
achievements as landing on the Moon, splitting the atom or heart transplant. In

addition, they often argue in public about the matters that seem elementary. And
they commit spectacular errors in their explaining and forecasting the course of
economic phenomena, which makes many observers doubt the scientific character
of economic occupation.
For instance, in the 12 edition of a famous textbook Economics, in 1985 Paul
A. Samuelson (with William D. Nordhaus) stated that since 1928 the Soviet Union
had been developing faster than the United States, Germany and Japan. Even a year
before the Berlin Wall came down they wrote: ‘the Soviet economy is proof that,
contrary to what many sceptics had earlier believed, a socialist command economy
can function and even thrive’ (Samuelson, Nordhaus 1989: 837). The word ‘thrive’
had not disappeared from the textbook until the 14 edition. Meanwhile, what had
been noticed for example by Roberts, is that already in 1988, thanks to perestroika
and glasnost, it was evident that Soviet economy had been stagnant for decades (see:
Roberts 2002; compare with: Skousen 1997).
In effect, when it comes to GDP forecasting, Blaug formulates the following
opinion: ‘We cannot accurately predict the growth of GNP in an economy more
than a year ahead and we cannot even predict the growth of NNP in individual
sectors of economy during the next two, three years’ (Blaug 1995: 355–356). Briefly,
the economists’ ability to forecast economic phenomena is negligible and it is not
even clear that it surpasses the abilities of an intelligent layperson. Polish examples
that confirm this diagnosis can be found for instance in critical evaluations of
the accuracy of macroeconomic forecasts made in Poland published regularly by
Borowski; (see for instance: Borowski 2007).
I presume the cause of this state of the affairs are the peculiar properties of the
very object of economists’ research. In the next chapter I will have a closer look at
the most important of these properties in order to see to what extent the peculiarities
of economics as a science impede the application of the rules of contemporary
methodology of empirical sciences in this area.
16 Bogusław Czarny
II. Peculiarities of Economics
The science of economics is essentially different from the most important natural
sciences in many aspects.
1. Limited Possibility of Experimenting
The properties of the object of interest of economists are the reason why experiment
plays a mediocre role in economy, while being a basic instrument of work of a scientist
who explores nature.
An experiment consists in deliberate changing of the selected properties of
a phenomenon in order to determine the relations between them and other
properties of the same phenomenon. An experimenter makes sure to eliminate
all secondary influence that could interfere with the relations described. Running
an experiment demands such things as: 1) a clear distinction and definition of the
analysed features of the phenomenon, meaning the potential causes and effects;
2) repeatability of effects, meaning the events caused by the change of causes;
3) possibility of directing the change of causes; see: (Nagel 1970: 387–394). In case
of economics these preconditions are especially difficult to fulfil. Economic process
is a complex and undividable entity and one cannot usually isolate and arbitrarily
change only some of its fragments.
For instance, let us imagine that economists want to run an experiment that
would explore the impact of changes in the investment expenditure on the growth
rate of the gross domestic product. This type of research would meet many obstacles.
First of all, how would you define ‘investment expenditure’? Do they refer to
a definite year? If so, which one? What should be the time interval between the years
when the gross domestic product increased and the period when the investment
expenditure changed? After all, the economic growth rate in a given year depends not
only on the machines acquired a year before but also those that had been in use for
more than a decade. Furthermore, the relation between investments and production
is very hard to isolate from the impact of other factors. The increase of production,
apart from investments, depends on the predominant form of corporate ownership in
an economy, competences of politicians responsible for economy, changes of prices on
foreign markets and natural disasters, which makes the matters ultimately complicated.
Secondly, the decision which part of the gross domestic product will be spent on
investments has a great impact on the life of the society. The bigger the investments,
the less can be spent on current needs. Therefore, political and economic power is
necessary to authorise the changes of investments, which is the necessary condition
of experimenting. Briefly speaking, it is hard to imagine that anyone could interfere
with the daily life of millions of citizens just so as economists could satisfy their
curiosity.
Thirdly, in economics (and social sciences in general) is it often hard to notice the
repeatability of the results of a potential experiment5. Reactions to the changes in the
amount of investments can be varied, depending for instance on the changes of social
awareness, which, for its part, impedes precise identification of the relation between
the amount of investments and the growth rate of the gross domestic product. At
the same time, in natural sciences the repeatability of the results of an experiment
enables intense scientific critique and is decisive when it comes to endorsement of
the theories.
In addition, we should notice that experiments are not applicable at all in the
research of many social phenomena, because the very nature of these phenomena is
singular. The emergence of a market economy with predominant private ownership is
an example. It is a process that had been completed centuries ago in Western Europe
and the same combination of political, cultural, demographic, technological and
other circumstances that initiated it cannot be recreated in any place in the world
today. Therefore, no experiment can be conducted in order to find out which of these
circumstances were most decisive.
2. Uncertainty and Generality of Forecasts
Theories formulated by economists usually refer to specifically defined situations.

Their occurrence requires that specific conditions must be fulfilled. As a result, the
conclusions draw from these theories bear rather great uncertainty. Moreover, the
conclusions are usually very general, which diminishes their practical utility (for
instance the utility of economic forecasts.)
5 Repeatability means the result of a specific study reappears when the study is repeated by
another person.
18 Bogusław Czarny
The Effect of Changeability of Circumstances of Economic Management

Economic theories do not usually refer to all economies and societies. The relations
described by those theories occur only in strictly defi ned circumstances. The
circumstances are not only complex but changeable as well. They are influenced
by such things as the entire area of culture, political system, and technology. Such
changeability of the terms of economic management calls for precise demarcation of
the scope of applicability of specific laws of economy, in order to avoid any deviation.
The demarcation is done by naming the preconditions of regularities. But since the
preconditions are very numerous, making of the list is very hard.
The changeability of the situations that economists have to deal with often
makes they refer to the ceteris paribus clause (Latin: ‘all other things being equal’).
However, the ceteris paribus assumption interferes with the verification of reliability
of a theory, thus weakening the effectiveness of the scientific critique. It can be applied
in order to protect the theory against challenging testimony of observational data.
After all, one can always say that that an observational anomaly which challenges
a theory was caused by the changes in the terms of economic management, which,
the authors of the theory assumed, had been constant.
Indeed, the ceteris paribus assumption restrains the theories of natural sciences
as much as in social sciences, nevertheless the conclusions of natural science theories
seem more reliable than in social sciences. They differ often sufficiently to base all
manner of practical decisions on them, like constructing aircraft and bridges. In
general an economic (and social science) theory probably has to rest on more ceteris
paribus assumptions and auxiliary hypotheses than natural science theory because
social phenomena are subject to more potentially disturbing influences than natural
phenomena. Furthermore, the nature of those disturbing influences makes them
more changeable (see: Beed and Beed 2000: 423–424). For this reason, economists
do not have their ‘Planck constant’ or ‘gravitational constant’6.
6 6 According to the Duhem–Quine thesis no theory can be exploded by a one-off experiment.

Falsification is attempted on entire sets of logically connected hypotheses. For example, in economics
the verification of the stable money demand hypothesis requires the acceptance of auxiliary
hypotheses about the factors influencing variables which defi ne the money demand (for example
the method of measuring the quantity of money, or the manner of creating money supply, etc.)
In case of a specific test, the main hypothesis cannot be separated from auxiliary hypotheses, so
that when there is a significant difference between the real and the expected quantity of money,
the negative result of the test is not “concentrated’. It can be caused by a fault in the stability
hypothesis, as well as one or more of the auxiliary hypotheses. It may seem reasonable then to
change particular parts of the theory, but the rules are unclear, which may cause constant disputes.
To sum up: the changeability of circumstances of economic management resulting

in the limitation of the scope of almost all ‘laws of economics’ makes regularities
uncertain and of little practical use. What’s more, the scientific critique of economic
theories is difficult, because the facts that contradict them can always be justified by
some faults in one of the unprecise preconditions of the theories. Needless to say, this
situation complicates the accumulation of solid economic knowledge.
Generality of Forecasts
It is the changeability of the circumstances of economic management that causes
economic theories and forecasts to be rather non-specific. Worse more, their
specification is usually impossible, as the circumstances of economic management,
including people’s reactions to economic stimulants are not constant (recureent),
but variable. As a consequence, one cannot say for example how much exactly
the price and sales figures of a product will rise after the consumers’ income will
have increased, or how many months exactly it will take for the growth of money
supply to cause a noticeable escalation of the average price level in an economy. In
other words, theories that find solid empirical confirmation do not happen often in
economics. One of the exceptions is the Baumol-Tobin square root rule that explains
the transaction demand for money. The square root formula implies that income
elasticity of money demand can be derived as being equal to + 1/2, while the elasticity
of demand on percent equals -(1/2) (Baumol 1952; Tobin 1956).
The verification of theories is difficult in economics due to the common use of the
method of comparative statics for instance. The standard application of this method
allows only to define the direction of changes of the analysed variable (but not the
magnitude). Since having the correct sign (plus or minus) is much easier than having
both the correct sign and magnitude, an emphasis on such qualitative prediction
generates theories, which are low in empirical content, have few potential falsifiers,
and are difficult if not impossible to test severely. The result is often economic theories
It is usually an especially important problem in economics because of the complexity of situations

described by economists. The complexity compels numerous simplifying assumptions (for instance
differentiability of the production function, perfect information, lack of externalities, and so on). As
a result, empirical falsification of a hypothesis based on all these assumptions cannot be
considered as conclusive, because one cannot determine whether it was not caused by
a fault in one of those assumptions. In other words, ‘the Duhem–Quine thesis complicates all scientific
testing, including economics, but its additive effect in social science may be more undermining of
temporally stable results than in natural science’ (Beed, Beed 2000: 423–424).
20 Bogusław Czarny
which are confirmed by the evidence but provide very little information (see: Hands
1992: 24).
Similar problems are connected with the distinction of short term and long
term, when their actual length is not defined (this distinction based on different
criteria can be found for instance in calculating price range of demand and supply
elasticity, in the AD/AS model, as well as in the neoclassical growth theory). As
a result, the testing of specific theories is complicated.
Y – total output
L – labour force
s – “old” saving rate
s’ – “new” saving rate
n – population growth rate
k=C/L – capital per worker
(ΔC/L) – real investment per worker
(ΔC/L)E – required investment per worker
g(k) – macreconomic growth function
Picture 3. Solow’s model of economic growth
For instance, a conclusion of the neoclassical model of growth is the thesis of

the equality of rates of economic growth in steady states with different saving rates.
Picture 3 presents Solow’s two-sector model of economy with two steady sates, where
the real investment per capita is equal to the required investment per capita (points E
and E1). In points E and E1 the rate of economic growth is equal (under the assumed
conditions in the steady state the economic growth rate is by definition equal to
the population growth rate, n). At the same time points E and E1 are matched with
different saving rates (s and s‘ respectively). As a consequence, in this economy there
is no positive relation between saving rate and economic growth rate (which strangely
enough is confirmed empirically).
The attempts at testing the thesis of the non-existant relation between saving rate
and growth rate are difficult because of the lack of information about the length of of
‘long-term’ in this type of the neoclassical model of growth. The contradiction of this
thesis by reference to the challenging facts is not enough, because it may be possible
that the period, from which the data on saving rates and growth rates were taken,
was too short and the thesis of no-relation between the two in points E and E1 refers
to a longer period. For example, as Mankiw says: ‘The inability of saving to affect
steady-state growth might appear inconsistent with the strong correlation between
growth and saving across countries. But this correlation could reflect the transitional
dynamics that arise as economies approach their steady states’ (Mankiw 1995: 278).
3. The Impact of Research and Publication

of Results on the Object of Research
As you know, in case of economics the research procedure itself may change the
behaviour of individuals and groups in an economy. The publication of results of
a research can have a similar impact on the properties of an object under study.
Because of that finding the truth about economy is even more problematic. Since the
act of research modifies the features of the researched object, the economic knowledge
acquired through research does not describe the normal behaviour of people in an
economy, but their behaviour changed by the applied research methods. Similarily,
since getting acquainted with the results of a research changes the behaviour of the
researched, the conclusions of economists do not describe the real behaviour of
people in an econmy, but their past behaviour, from the period before the publication
of the research results. Meanwhile, the purpose of research is to describe behaviours
undeformed by external factors.
The method of questionnaire surveys is a classic example of this type of
complications. The questionnaire is a research instrument consisting of a series
of questions for the purpose of gathering information from respondents about the
22 Bogusław Czarny
behaviour of subjects in an economy by interviewing all of them according to the

same scheme. Even if the pollster has got the right qualifications and does not deform
the data, there is no certainty that the gathered information will reflect the real views
of respondents. There are many reason why.
First of all, a respondent may believe that his/her answer will have impact on the
matters of importance to him/her, which may prompt them to give a different answer
then they would normally do. For instance, a worker who is not convinced about the
grounds justifying a strike may still support it, thinking a strike could bring about
a raise of wages.
Second of all, during research a respondent may reckon that he/she is expected to
have an opinion on certain matters, the importance of which he/she did not realise
before. This may cause them to answer with conviction questions they never thought
about before, and for instance express opinions in a discussion about the proper
amount of budget deficit.
Thirdly, a respondent may keep to him/herself the truth about their opinions
and behaviours, because they may be afraid an information like that could be used
against them. For instance, the unemployed will not willingly admit they undertake
illegal work.
The verisimilitude of economic forecasts may also raise doubts because the
publication of forecasts can sometimes change people’s bahaviour. For instance, as
a result we get ‘self-defeating prognosis’. Nagel quotes a story about economists in
the post war United States who on the basis of an apparently adequate analysis of
the state of the American economy predicted an economic recession and growth of
unemployment rate for 1947. And because of this warning businessmen lowered the
prices of a number of products. The effective demand for these products increased,
which in turn revived the market. And in the end the predicted recession never came
into effect (Nagel 1970: 402).
4. Economics and Human Interests
In the course of economic management the interests of groups and individuals,

including material interests, are accomplished to various extents. For instance, as
a result of income division some people obtain bigger or smaller part of the income
produced by the entire society. Apart from that, people in an economy also have ideal
interests. They want to have a say in politics and economy and want the management
of economy to be done in accordance with their views.
The knowledge provided by economics has a strong impact on people’s potential to

achieve various goals. Sometimes it leads to intentional or unintentional deformation
of this knowledge in order to create the conditions that would enable some people
to gain material benefits and other. Heilbroner goes as far as saying that in case of
social matters research, an emotional involvement of the scientist is unavoidable. The
nature of this involvement is different than in a scientist who investigates nature. In
case of the natural sciences a discovery of an unexplained anomaly can threaten the
intellectual ‘safety’ of the explorer of nature, and maybe even his mental ‘integrity’.
However, this discovery cannot compel a negative moral evaluation of the scientist
himself as an element of the existing social order. But as far as social sciences
go, the emergence of unexpected results of a research almost always weakens or
strengthens the legitimacy of the system, of which a social scientist is always a part.
(see: Heilbroner 1973: 139). Heilbronner further writes: ‘I will even risk an opinion
that every scientist dealing with social matters in his work, approaches his task with
an (intentional or unintentional) desire to prove efficiency or inefficiency of the social
order he investigates’ (Heilbroner 1973: 141). As a consequence, the image of economy
created by an economist can be deformed. In extreme cases the deformation consists,
for instance, in presenting false descriptions and theories as scientific knowledge.
The deformation can be done in at least two ways. Firstly, the interested party
can create the deformed knowledge themselves, like Joseph Stalin did for example
when he ‘observed’ the so-called basic economic law of socialism which said that in
socialist countries all enterprises have the sole objective of ‘securing of the maximum
satisfaction of the constantly rising material and cultural requirements of the whole
of society through the continuous expansion and perfection of socialist production
on the basis of higher techniques’7. Of course, the existence of such regularity was
contradicted by the actually observed actions of enterprises in socialist countries.
Secondly, the interested parties can interfere with scientific critique and in this
way influence the results of economic theories selection. This can be done for example
by falsifying research results, subjectively dividing funds for scientific development,
deforming teaching curricula, enabling the publication of research results only to
a chosen few, blocking the chance of professional promotion of the critiques. The intensity
of this type of actions can vary. One of the most drastic examples in Poland is the fate
of the so-called Kalecki’s school in Poland (see: Osiatyński 1984: 253–302). In different
7 See: (Stalin 1952: 22); compare: (Stalin 1949: 144). In Poland the critique of the opinion about the
existence of the basic economic law of socialism did not let this idea to die out until the end of 1970s. See
for example (Minc 1980: 114). I described this problem in more detail in: (Czarny 1989, chapters 3 and 4).
24 Bogusław Czarny
historical circumstances the applied measures are usually more subtle [see for instance,
relatively recent Polish debate on rationality principle in economicis; (Czarny 1989)].
Such practices driven by material and ideal interests of people may complicate
and impede the cognition of economic laws. For example in Poland during many
decades after WW2 up until the end of 1980s only few handbooks of economics of
the world standard were published. The content of publications that were commonly
used as handbooks for students of economics was usually outdated, incomplete or
deformed by propaganda. This obviously decreased the level of economics teaching
in Poland and hampered the development of economic sciences.
III. On the Potential for Progres in Economics
I don’t believe that the presented above peculiarities of economics as an empirical

science could put a stop to its progress. Here is why.
1. Experimental Economics and Observation
It is true that the potential for experiment is very limited in economics. But let us
not forget that some of the natural sciences had not used experimental methods for
many years either (for example astronomy and embryology). And it did not prevent
scientists from establishing scientific truths in these fields.
Furthermore, the abovementioned economists’ trouble with experimenting does
not totally exclude the possibility of referring to experiment as a source of knowledge.
Sometimes, against the odds, it is possible. For instance, certain tax improvements
can be introduced for selected enterprises, and research can be done to measure their
impact on the magnitude of the output. Similarily, market simulations can be done by
arranging situations, in which groups of people investigated by the experimentator,
act the same as people who maximise utility and (or) profits on the real market.
Experimental Economics Development

The increasing role of experiment as a source of knowledge for economic scientists has
been confirmed by the fast development of experimental economics in the second half
of the 20th century. Some of the most fundamental assumptions of economic theory
were put to test (like for instance the consumer rationality assumption proclaimed by
the advocates of the revealed preferences concept). The subjects of those experiments
can also be animals (e.g. pigeons, rats). But even in those cases when an experiment is
possible (which are more likely with microeconomic, not macroeconomic, problems)
it is not as easy as in natural sciences.
Of course, the enthusiasts of experimental economics give emphasis to its
successes. In their opinion, experimental economics has been one of the great success
stories of the last 20 years. We now have rigorous ways to test models of human
behaviour in the laboratory. Some standard models, such as supply and demand, have
turned out to be much more robust than we would have thought 20 years ago. Other
models, such as expected utility, have turned out to be less robust. The growth of
experimental economics has led many theorists to construct theories that are simple,
concrete and testable, rather than theories that are complex, abstract, and general.
Laboratory observations have also been instrumental in alerting us to theoretical
dead ends, such as some of the more convoluted refinements of game-theoretic
equilibrium concepts (see: Varian 1992: 118–119).
However sceptics doubt the reality of the perspective of creating a basis for
economic observations in this way: it seems unlikely for many reasons. For example,
the data from questionnaires collected in various situations suggest people have
different reactions in an artificial situation than when they face real and important
changes in their material welfare. Besides, economists are too often compelled to
substitute important empirical data with experimental ones ( O’Brien 1992: 103).
In general: ‘… the status of experimental fi ndings in economics remains
controversial. Even among experimentalists, there are sharp disagreements about the
criteria for judging the validity of experimental designs and for drawing inferences
from experiments’ (Sugden 2005: 177).
Observation Instead of Experiment?

An experiment as a source of cognition of economics can sometimes be replaced
by comparison of results of observation of various economic phenomena.
Admittedly, manipulating the price in a simulated situation, when all other
circumstances that influence the demand remain constant, in order to observe
the level of demand in relation to different prices, is not very practical, because
of the high cost for example. As ana altenative, one can, however, refer to the
information from the past about the sales figures at different price levels and apply
regression analysis.
26 Bogusław Czarny
In the same way, one cannot reconstruct for experimental purposes the social
situation that led to the establishment of the capitalist system in Western Europe.
It is possible, however, to compare information about it with the history of societies
in China and India, where capitalism as a form of production organisation did
not exist. In the same context, it might be useful to observe the transformation
of economic systems in countries like Russia, Poland and China by the end of the
20th century. Such comparative observations can be very enlightening and help
identify the key circumstances that led to the establishment of the capitalist form of
economic management. A classic example of such analyses is Weber’s research on
the rationalisation process in Western Europe, as well as China and India; (see for
example: Weber 1922: 17–206); compare (Weiss 1975: 47–48; Czarny 1989, chapter 1;
Czarny 1990a). As for the transformation in socialist countries, I would recommend
comparative analyses of the institutional conditions of transformation ‘from plan
to market’ in Russia, China, and other communist states by Stiglitz et al. (see for
example: Hussain, Stern, Stiglitz 2000; Hoff, Stiglitz 2002; Ellerman, Stiglitz 2003).
It is obvious, however, that the number of such ‘natural experiments’ discovered by
economic historians and the quantity of provided information is limited.
Milton Friedman wrote it already in mid-20th century that ‘evidence cast up
by experience is abundant and frequently as conclusive as that from contrived
experiments; thus the inability to conduct experiments is not a fundamental obstacle
to testing hypotheses by the success of their predictions. But such evidence is far more
difficult to interpret. It is frequently complex and always indirect and incomplete. Its
collection is often arduous, and its interpretation generally requires subtle analysis
and involved chains of reasoning, which seldom carry real conviction. The denial to
economics of the dramatic and direct evidence of the ‘crucial’ experiment (in Latin:
experimentum crucis – B. Cz.) does hinder the adequate testing of hypotheses; but this
is much less significant than the difficulty it places in the way of achieving a reasonably
prompt and wide consensus on the conclusions justified by the available evidence.
It renders the weeding-out of unsuccessful hypotheses slow and difficult. They are
seldom downed for good and are always cropping up again.’ (Friedman 1953: 10–11).
2. Results of Research and Their Publication Can be Predicted
I pointed out in previous chapters that the research procedure can influence the
object of economic research, and what’s more, the general availability of results of
economic analyses may lead to such changes in people’s behaviour which render
the research invalid. Of course, this state of the affairs is not helping scientists who
investigate economy. But this does not mean that truthful description of an economic
process becomes impossible in this situation. The arguments to support such thesis
are as follows:
The publication of economic research results does not always lead to a change in
people’s behaviour. Nurkse’s describing of the so-called demonstration effect did not
in the least modify cunsumer attitudes. Consumers continue to copy each other’s
behaviours and buy everything their neighbours deem desirable.
Furthermore, knowing the regularity of human action, one could predict and take
into account the respective change in people’s behaviour. This would enable taking
into consideration the results of the changes in formulating research results. For
example, if the analysis of an economy with AD/AS model and inflation expectations
argumented Philips’ Curve shows that in the near future the inflation rate will equal
π, then in the course of research – bearing in mind Lucas Critique – one could assume
that the price expectations in that economy equal π e = π. According to the rational
expecaions theory, if the real unemployment rate, u, is not equal to the natural
unemployment rate, u* (u ≠ u*), people should adjust their inflation expectations,
πe, to the level of π, defined by the equation of the short-run Phillips curve, plotting
inflation expectations: [π = πe -α(u-u*)], where: π is the inflation rate, πw is the rate
of growth of money wages, πe is the expected inflation rate, α is the degree of wage
sensitivity to the unemployment rate, u is the real unemployment rate, and u* is the
natural unemployment rate8.
However, anticipating the change in people’s behaviour caused by the research
is not easy and requires arbitrary choices, regarding for instance the scale of this
change. Against the forecasts of radical advocates of the rational expectations
theory, who assumed – in the spirit of Lucas Critique - that π = πe (see: above), the
introduction of the Philips Curve, inflation expectations argumented, did not cause
its disappearance. Observation still confirms the existence of counter dependency
of the inflation rate and unemployment rate (see for 27instance: Dornbusch, Fischer,
Startz 2003: 551). Advocates of the rational expectations theory explain this by
unavailability of important information and consequent false assessment of the
situation by people who, nevertheless, have rational expectations. In other words,
8 However, if π = πe -α(u-u*), then π = πe if, and only if, u = u*, so in this situation the short-run
Philips curve should not exist. If the real inflation rate is always equal to the expected inflation rate,
then then real unemployment rate is always equal to the natural unemployment rate. This means the
chage of the real unemployment rate is not coupled by the opposite change of the real unemployment
rate.
28 Bogusław Czarny
unexpected changes of the growth rate of money supply in an economy are followed
by the change of unemployment rate, while the expectable changes don’t; see (Lucas
1973). (Another explanation is stickness of nominal wages. Nevertheless, everything
points out that predeicting human reaction to research is difficult.
3. Other Problems
Difficulties connected with other problems that bother economists can be surmounted
too, including uncertainty and inaccuracy of forecasts, and the impact of material
and ideal interests of economists which deform the verisimilitude of their statements.
For Less Uncertainty and More Accuracy of Forecasts

The ambiguity of economic forecasts effectively complicates and sometimes makes
completely impossible their verification. However, it can be prevented. First of all, by
avoiding unrealistic (‘heroic’) and unverifiable assumptions, which obviously do not
reflect the reality.
Secondly, it is necessary to pursue the creation of theories of empirical character,
and give them the most precise form possible, as well as put them to strict tests
by confronting them with the reality. What it means is, that in order to succeed
economists really need to overcome their common reluctance to evaluate economic
theories according to the criterium of originality of their empirical content. The
research on scientific papers found in economic publications has for many years
show a drastic irrelevance of the published papers to the reality; see: (Blaug 1995: 31;
compare Canterberry and Burkhardt 1983; Leontief 1982; Oswald 1991). Leontief had
noticed this already in 1971 when he wrote that the measure of professional success in
economic milieus was inappropriate. The empirical work, such as gathering adequate
data about economy, was unappreciated, while theoretical work, such as creating new
mathematized economic theories or econometric techniques, was overrated; see:
(Leontief 1971: 3–5; compare: Backhouse 1997: 212.) .
The Role of Interests
Both material and ideal interests have indeed great impact on the content of economic
theories, which had been confirmed for example by the history of the so-called political
economy of socialism in Poland. It does not have to mean, however, that economic
knowledge becomes irrevocably deformed. For example, the Eastern European version
of real socialism collapsed, and with it the political economy of socialism.
We should remember that economic knowledge is not the only factor that
influences the changes of achieving human goals and objectives. It is similar with
natural sciences. It is common knowledge that the views of Copernicus or Darwin
were rejected. [Nevertheless, Heilbronner is right when he says that such problems
are more damaging to economics and social sciences than astronomy and biology
(they more often concern imperative material interests)].
In my opinion, freedom of science is of crucial importance here. It guarantees
competition among scholars, which in turn increases the intensity and effectiveness
of scientific critique. In general, I believe, however, that despite all reservations,
Joseph Schumpeter was right when he wrote: ‘there exists a mechanism that tends to
crush out ideologies automatically’ (meaning the empirical economics model from
picture 2 above – B. Cz.). Of course, ‘this may be a time-consuming process that
meets with many resiaistances’. In effect ‘we are never safe from current intrusion of
new ideologies to take the place of the vanishing older ones’ (Schumpeter 1954: 44).
4. On the Progress in Economics
I have so far pointed out various problems that economists have to face when they
investigate economy. They are usually caused by the properties of the researched
object, which impede the verification and critique of economic theories.
Firstly, the use of experiment as a source of information about economics and the
generality of economic predictions make the testing of particular statements as well
as total theories more difficult than in natural sciences. This weakens the intensity
of scientific critique, thus mapering the process of accumulation of solid knowledge
of economics.
Secondly, because of things such as the limitation of validity of theories to
specific situations, the changeability of economic conditions, the problems with
their accurate description, the unrealistic assumptions (e.g. applying ceteris paribus
or assuming that people are fully aware of the circumstances and results of theior
actions) the negative result of an observation does not at all imply resignation from
the verified thery. A negative test result can be for example explained by a change
of circumstances, which had been considered constant, or changed as a result of the
research or publication of research results.
30 Bogusław Czarny
Thirdly, the strong dependence of the possibility of realisation of interests (both

material and ideal) on the content of economic knowledge is the reason of relatively
permanent deformations of the knowledge of economics, it weakens the scientific
critique and complicates the accumulation of solid economic knowledge.
Reservations of this kind are being expressed these days by many methodologists
of economics. ‘The difficulty in economics and the social sciences is … (1) there is
not a substantial body of precise, well-tested and corroborated laws in the fields in
which predictions are wanted, ventured or required to support rationally the policies
adopted; and (2) the ‘independent evidence’ in favour of all ‘the initial conditions’
which are often so much more numerous, complex and difficult to isolate than in the
natural world, is often practically impossible to ascertain with sufficient precision
and reliability. … For if predictions useful for practical policies are to be obtained,
these initial conditions must themselves be reasonably precise, not too numerous,
and themselves predictable. … In fact, predicition in economics and social sciences
has often to be attempted not on ‘well-tested and corroborated laws, but on tentative,
imprecise generalizations regarding trends and tendencies.’ (Hutchison 1964: 94–95).
At the end of the 20th century this opinion was fully accepted by such scholars as
Caldwell (see: Caldwell 1982: 238–42) and Blaug (Blaug 1995: 22).
However, there is much reason in the statement that making science does not only
consist in forecasting. One of the biggest achievements of economists is their language.
What I mean is the well known set of terms and classifications such as: ‘scarcity
of goods’, ‘real value’, ‘transaction costs’, ‘market equilibrium’, ‘alternative cost’,
‘sunk costs’, ‘scale advantage’, ‘external results’, ‘surplus of consumer and producer’,
‘information asymmetry’, ‘merit and demerit goods’, ‘intermediate and final goods’,
‘gross domestic product, GDP’, ‘PPP - purchasing power parity’, ‘PPP exchange
rate’, ‘short-term and long-term macroeconomic equilibrium’, ‘multiplier’, ‘natural
rate of unemployment’, ‘involuntary unemployment’, ‘inflation tax’, ‘comparative
advantage’, etc. The glossary is expanding all the time (for example: ‘coopetition’).
Thanks to this language economists are able to describe, explain and analyse the
world of economics with more precision and clarity. Moreover, the analyses prove to
be useful in practice. Such is for instance the case of anti-monopoly policy (e.g.: Will
Microsoft be divided at last, or not?) and analysis of costs and advantages (e.g.: It is
worth to build a giant airport in this place, or not?).
In other words, the achievements of science, including economics, are not only
general scientific laws. As Solow commented: ‘There is enough for us to do without
pretending to a degree of completeness and precision which we cannot deliver. To
my way of thinking, the true functions of analytical economics are best described
informally: to organize our necessarily incomplete perceptions about the economy,

to see connections that the untutored eye would miss, to tell plausible – sometimes
even convincing – causal stories with the help of a few central principles, and to make
rough quantitative judgments about the consequences of economic policy and other
exogenous events (Solow 1985: 328–9; quoted after Mayer 1993: 47). Furthermore,
the science does neither only, nor mostly, develop by identification of correlations
of the long known characteristics of the observed objects. Another thing of great
importance is the creation of new notions, or the new ways of describing and
classifying of the phenomena, comparing them with other notions and investingating
the consequences of their application; (compare: Hausman 1994: 13).
As for the economists’ ability to formulate laws of economics, the progress in this
area is – most likely – a question of time. Let us remember that natural sciences had
been developing for many centuries before they achieved today’s level of advancement
and today’s potential.
*
* *
To sum up, I share Blaug’s (Blaug 1992) and Backhouse’s (Backhouse 1997)
opinions that the problems of economists with defining the truth about economic
processes result from the accumulation of problems that are familiar to natural
sciences as well. On the one hand, Solow is obviously right, when he says the
achievements of economics are not limited to some general scientific laws. But if
we want to go beyond his minimalist programme, we must reach out to Blaug’s
instructions. The potential of further development of economics truly depends on
how fast we are able to replace the common tendency to create irrelevant models of
economic management, unrelated to the reality, with an equally common tendency
to create and test theories that refer to the results of empirical research. The system
of stimuli the scientists respond to is decisive. They involve the criteria of evaluation
of scientific success accepted in economist milieus, the manner of qualification of
papers for scientific publications, and the division of funds for economic sciences
development.
32 Bogusław Czarny
References
Backhouse, R. (1997), Truth and Progress in Economic Knowledge. Cheltenham, UK; Lyme,
UP: Edward Elgar Publishing Limited.
Baumol, W. (1952), ‘The Transactions Demand for Cash: An Inventory Theoretic Approach’,
Quarterly Journal of Economics, 66, 4: 545–556.
Beed, C., Beed, C. (2000), ‘The Status of Economics As a Naturalistic Social Scien-ce’,
Cambridge Journal of Economics 4 (4): 417–435.
Blaug, M. (1992), Methodology of Economics, Cambridge.
Blaug, M. (1998), ‘The Problems with Formalism. Interview with Mark Blaug’, Challenge 41
(3): 35–45.
Borowski, M. (2007), ‘W oczekiwaniu na czarną owcę’, Gazeta Wyborcza, August 22.
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WFES 1:2 2010
Slight Crisis of Mainstream

Economics?
Marek Garbicz*
Abstract
Is the neoclassical economic paradigm obsolete? For the past two decades huge number
of new ideas and concepts in economic theory have emerged, so it seems that economics
have reached a methodological turning point. The need for close interdisciplinary
cooperation in researching subjects that have always been in the centre of interest by
economists becomes evident.
It seems to me, although it is my subjective opinion – that today’s economics is

at a methodological turning point. Over the last 15–20 years, a great number of
new conceptions, ideas and concepts have appeared and seem to me to be slowly
undermining the neoclassical economic paradigm. We are not yet at the stage when
a new synthesis is made, for it is a little too early for that. It is not clearly visible
either, because a change of textbooks at the first years of college is the vivid and
symbolic expression of a new approach. When these textbooks start reflecting new
conceptions, it means an actual breakthrough has taken place. It is still a long way. As
part of this new methodological change, economics is starting to voice its increasing
need and demand for cooperation of other social disciplines. From anthropology,
psychology, political science through sociology reaching outside social sciences to
such as biology, medicine or physics.
* Department of Applied and Theoretical Economics, Warsaw School of Economics.

36 Marek Garbicz
At what point are we today? The idea of equilibrium seems to be the main concept
that organizes our, economists’, thinking about micro- and macroeconomics.
My attitude to this idea is ambivalent. Whether we study macroeconomic or
microeconomic problems, the approach that makes equilibrium the axis of analysis
reveals its weaknesses. By introducing the concept of equilibrium, L. Walras showed
that the economy is a system of connected vessels with a certain interdependence
between sectors, branches and markets. Various sections of the economy are connected
with one another, affect each other and cannot be treated as isolated islands. Even
if they initially affect only some branches of the economy, every significant change
in economy or its environment, or great demand and supply shocks, they trigger
a whole avalanche, a whole cascade of adaptation processes in cooperating or related
sectors, on product markets and markets for production factors. All this helped to
understand, why despite the fact that the economy is inhabited by entities steered
by private egoistic interest it is not torn apart by these egoisms, but is dominated
by centralizing factors. It was a great achievement at that time, and that is how it is
assessed today.
On the other hand, the concept of equilibrium has somewhat tunnelled
economists’ vision, for which reason I approach this idea with certain scepticism.
The acceptance of the equilibrium approach moved the centre of gravity of economic
deliberations to purely static and short-term problems. The dominating point of
view is that equilibrium is a state when that acting forces neutralize each other. In
this sense equilibrium is actually understood as a certain state of balance of powers.
This leads to stagnation, economic standstill and lack of change. This static state
repeats itself unchanged in time until some disturbance or perturbation occurs.
But then, if the system is stable at least on local level it comes back to equilibrium,
unless the shock is too big. In the case of heavy shocks, the system knocked out of
the state of one balance can move on to a new static state. In any case, there are only
short-term fluctuations around the state(s) of balance. The supporters of the concept
of equilibrium rather strongly protest against the allegation that equilibrium is in
principle a static idea implicating stagnation and torpor. They adduce the fact that
economy is analyzed using both static and dynamic models of equilibrium. The
dynamic models can describe the ways of development of economic variables and
thus indeed show dynamic features. But this dynamics has a stationary solution
where certain parameters of the model recur unchanged in time. The problem of
balanced-growth can serve as an example where, in the state of long-term equilibrium,
key relations and dynamics are stabilized in time. The fact that the obtained results
for static states are insignificant is obviously not the problem. The key issue is that
Slight Crisis of Mainstream Economics? 37
attention is not focused on disequilibrium states responsible for changes, but on the
states of balanced economic powers that signify lack of impulse for change.
These questions are important because we often wonder what finally led us as
human beings to leave the world of caves and end up at the moment where we find
ourselves today, i.e. refined level of technology, high production and consumption,
great productivity, etc. It definitely did not happen because of our operation at the
level of balance, but because of our activity at the level of changes. It was not the
duplication and repetition of behaviour of various actors of economic life or social
groups even on a growing scale that was decisive but the innovations, new ideas,
concepts and conceptions or, to put it in macroeconomic terms, these were the
growth, development and dynamics of change. The fascination with the concept
of equilibrium led to the fact that, at least until recently, in my assessment, maybe
90% of economists devoted their studies to the problems of equilibrium, and only
the rest was involved in any problems of dynamics that in my opinion are key in the
long-term.
The second, rather deeply rooted stereotype in which many economists believe
is the concept that solely competition and rivalry between economic agents are the
key motor for change. Positive changes are born on the field of constantly conflicting
interests of various entities, consumers and producers. It is a rivalry between egoistic,
but rational, wise and calculating players. Every new opportunity for increasing
their own profits triggers the agents’ activity to secure this profit for themselves.
It is the private, material interests and motives that stimulate activity. Conflicts of
economic interests, competitive fight and rivalry between people suggest that there
are only zero-sum games played in the economic world and within social processes.
It is completely untrue, because we simultaneously claim here that competition is
advantageous not only for winners and vanquishers of competition, but also for
the community and leads to social prosperity. It even seems that the more there is
competition, the more socially effective the system is.
Therefore while appreciating the role of competition, as it indeed is an impulse
for change and triggers new processes, it is worth to adopt a different perspective. Not
rivalry and competition but cooperation between people are the key to understand
what determines the growth of the effectiveness and efficiency of the processes
of management. To play zero-sum games requires people to cooperate. Modern
technologies are characterized by the economies of scale. Production on a large scale
gives an advantage over a company that produces on a small scale, because mass
production is characterized by lower unit production costs and is more competitive.
There are multiple reasons for such a producer’s advantage and chiefly result from
38 Marek Garbicz
the indivisibility of technology, high fi xed production costs or high set-up costs.
The problem is that large production is not possible in small, family or one-man
companies, and division of duties and specializations is necessary and sensible.
It makes you think of the case of Robinson Crusoe on the desert island, who
has determined material resources at his disposal and allocates them to meet his
needs so as to maximize their usefulness to him. Technologies are at the same time
a function of Robinson’s knowledge, competence and practical skills and are firmly
defined. In this world, there is no doubt where lie the limits of production, or, to put
it differently, what is the production possibility frontier. Let us imagine, however, that
Friday shows up on the island. This very much complicates the situation. The new
actor would not bring in anything to our deliberations, had no economies of scale
existed in economics. In this case one could talk only of not more than a doubled
production capacity of the economy once Friday appeared on the stage and collective
activity would be a simple sum of behaviour of individuals. However, in the case
of the increasing returns, cooperation does increase effectiveness, efficiency and
production, and production limits move. In the language of science, this is called
positive feedback and it helps to understand why cumulative development processes
occur in economy.
Robinson’s and Friday’s cooperation cannot be taken for granted and is only
one of the possible scenarios. However, if there is no cooperation, the economic
system works below its production capacity. The thing is that the second scenario
is much more probable than the first. In a world where Robinsons are very rare,
the phenomenon of human cooperation and collaboration must be the key element
of economic analysis. This moves the centre of gravity of deliberations from the
optimization of single actor (which is the matter of interest of microeconomic studies)
to the way in which the activity of single agents intertwine. It is here precisely
that runs the line separating a strictly microeconomic analysis (a single actor)
and a macroeconomic description. Macroeconomics is not a sum of behaviours of
microunits. The frequent demand to base macroeconomics on strong microeconomic
foundations is therefore admissible to a certain point. To date, this expectation was
actually understood as a postulate to have macroeconomic events be inferable from
the motives for the actions of single microentities. In practice, the assumption of
the representative agent was used as the basic methodological tool. This, however,
introduces, as if through the back door, the assumption that there are no increasing
returns. The representative agent construction when used, naturally ignores the issues
of cooperation between the subjects and imposes the handling of macro-events as
a sum of microeconomic events.
There is a problem of risk related to cooperation. Let us go back for a moment to

Robinson. He controls the whole process of production because he is the only one
to manufacture on the island. Obviously, the control is limited by vicissitudes of
nature such as climate, weather conditions, natural disasters, etc. Nonetheless, the
production process is under his control. Robinson’s efficiency is admittedly low, but
he operates in a very low risk situation. However, when Friday comes in, and he is
followed by his friends and people start cooperating, divide duties, specialize, etc.
problems appear. These problems are brought about by the growing behavioural risk,
which is a high risk that is the result of other agents’ behaviour.
Risk is generally the result of the fact that people operate in a world with strong
information asymmetry combined with large transaction costs. And contracts or
agreements made with others are often incomplete contracts or agreements. The
incompleteness of a contract is the incapacity to specify all terms of contract and/or to
impose very high contract execution costs to one of the parties. A simple example of
such an incomplete contract is when you go shopping to a grocery store: I pay and put
good money on the counter and receive a promise from the other party that the goods
put into my basket are of good quality. The buyers have no effective way to verify this
promise ex-ante. It is not earlier than during consumption that they can find out if
the promise was kept. You cannot check in the shop if the cream cheese or eggs are
fresh, beauty products, toothpaste, cold cuts or white are of desirable quality. At the
same time I do not know anyone who would go to court with a bad egg or cheese to
fight for their consumer rights. Simply because it’s not worth it. Transaction costs are
too high and in this sense the contract is incomplete.
If the employer hires a worker and pays good money, the employer gets from the
other party not more than a commitment of good work. It is only a promise because
good work cannot be precisely defined. The payment contract cannot specify in detail
all conditions and situations that make up efficient and effective work. Sometimes
employers go to court to put in a claim against their employees. In principle this takes
place in the case of criminal offences committed by employees (such as theft), and not
manifestations of bad work. A similar situation characterizes the relations between
the moneylender (bank) and borrower. Here we only have the borrower’s promise to
pay the future liability to the bank.
What am I aiming at? If we are indeed living in a world of incomplete, open
contracts, whose execution by a third party (arbitration, court) is difficult, costly,
or even impossible, then why are contracts executed at all? The answer must come
as a surprise to both supporters and apologists of equilibrium. Such contracts are
executed because there is no equilibrium on nearly any market. And it is precisely
40 Marek Garbicz
because of the lack of equilibrium that these contracts can be implemented. The lack
of equilibrium means a power factor will appear on the side of the economic relation
that is initially weaker because it has no full contractual security.
Unemployment is the symptom of lack of equilibrium on the labour market and
it is a disciplinary factor that helps exact a determined minimal quality of the job
service. On the consumer goods market, or on any products market, this role is played
by the offer that exceeds demand. When we study any goods or services market, in
principle there are stocks that the supplier could sell at any moment if there is a new
buyer. And in the case of markets where the production is not warehoused (such as
the energy turbines market, tanks, ships, etc.) it is typical for the producers to keep
free reserve production capacity. All these are cases of the state of imbalance with
oversupply. This gives a big advantage to the buyer for they can refuse to continue
buying from suppliers who offer bad products. This sanction is effective because it is
economically severe to producers by reducing their income. What would happen if
the seller had the advantage and there were many more agents wishing to buy than
products supplied – the supplier could then with impunity ignore the buyers’ demand
of high quality. Refusal to buy would be ineffective since the place would be filled by
others deprived from possibility to satisfy their needs otherwise.
The situation on the loan market is similar. The key instrument here is the threat
to refuse a loan again. On loan markets there is the imbalance of constantly higher
demand for loans than credits offered. In this sense the economic power is on the side
of the bank, which can only sign incomplete contracts with its clients and thus does
not have a completely effective way of executing its debtors’ liabilities except for the
refusal to continue granting loans.
Aside economic power there is the second factor that determines effective
execution of incomplete contracts. The second factor is an interesting element that
links economics to sociology. Social norm or rather the system of values is the second
element. Many employees do not work well and effectively because of fear of sanctions
and yields to the pressure of employers’ economic power, but because they have their
work ethos. Entrepreneurs manufacture good products not because of the fear of
the negative reaction of the buyers that the dissatisfied customer will not buy their
products, but for many it results from their code of good work. The economic force
and social norm partly substitute themselves as factors for execution of incomplete
contracts. The weaker the role can be played by social rules that regulate behaviour,
the stronger the economic power must be manifested.
The mechanisms that shape social norms and the mechanism that shapes systems
of values are the task for research for economists to a certain extent only. In particular
in the extent to which their key role in ensuring effective cooperation between people
can be observed. At the same it is also or mainly the area of interest for the sociologist,
psychologist, anthropologist or even biologist. It seems to be an optimistic forecast
for cooperation of various branches of social sciences.
WFES 1:2 2010
Do we Need New Methodology

in Macroeconomics?
Wojciech Pacho*
Abstract
The questions whether methodology employed by mainstream macroeconomics is

sufficient and whether and in what extent innovative propositions in that field are
in demand appears to of growing importance. In this article the concept of the role of
representative agent for developments in economic science is thoroughly discussed. The
strengths and deficiencies of the Representative Agent Model are examined.
The mainstream academic economic theory seems to rest on two fundamental

pillars: the notions of representative agent and economic equilibrium. I would like to
focus on the role of representative agent for developments in economic science. Th is
concept has a very long tradition in economics, dating back to Marshall who used it
to describe equilibrium in order to eliminate the problems of agent diversity from his
analysis. This abstract construct helped to avoid the assumption that all enterprises
are identical. Using this concept the author explained how an internally diversified
branch generates a single equilibrium price for all enterprises.
In modern times the notion of representative agent is used to construct aggregate
macroeconomic categories based on results of individual behaviours of economic
subjects. The idea is to build microeconomic rationales for equations describing
aggregate demand and supply and their components and to bypass difficulties
associated with aggregation of microeconomic effects at the macroeconomic level.
*
Department of Applied and Theoretical Economics, Warsaw School of Economics.
44 Wojciech Pacho
Undoubtedly, this way of looking at macroeconomic phenomena has played

an enormously important role in the development of economics. The important
changes in economic thinking inspired by Lucas are one example worth mentioning.
Taking microeconomic foundations of decision-making as his point of departure,
he showed that aggregated output does not necessarily change in accordance with
Keynesian rules, i.e. it does not necessarily match the modified aggregated demand.
Actors rationally try to anticipate a potential source of demand shock and to adjust
their supply response accordingly. This may neutralise the intentions of monetary
authorities which strive to influence the aggregated output by modifying the supply
of money in the economy. The discovery of the significance of rational expectations
in the behaviour of agents as well as modelling of such behaviours are among the
most interesting and most significant achievements of modern economics. These
developments were enabled through the use of the Representative Agent Model as
an analytical tool. The analysis of behaviours of individual agents, used as a point of
departure, was taken further to aggregation at the macroeconomic level. The role of
rational expectations in the shaping of aggregate result was identified exactly once
analysis went down to the level of a representative agent.
There are also other significant discoveries were enabled by microeconomic
approaches to aggregates. For instance, the traditional aggregate function of
consumption based on current disposable income could be challenged once the
maximising tendencies among individual consumers were included in the picture.
As a result, the theory of aggregated consumption was developed, taking account not
only of current income but also anticipated one. For this reason, this theory is thought
to account more effectively for long-term changes in aggregated consumption.
The transition from a representative agent to generalisations onto a population
of agents is generally quite straightforward. It is assumed that an economic agent
optimises the pursuit of its exogenous goal within the existing constraints. Such
constraints may be static or dynamic (as in growth theories, for instance) and this
influences the selection of the optimisation procedure. Importantly, the result of
such optimisation procedure is also considered as pertaining to the aggregate. In
other words, macroeconomic phenomena are reduced to the behaviours of individual
agents. The aggregate is reduced to the individual agent while the latter becomes
the subject-matter of macroeconomic study based on the assumption that agents’
behaviours represent the behaviour of the aggregate. This is based on the naïve
belief that if units (agents) display some typical behavioural attributes, then such
attributes must be also displayed by aggregates which are composed of such units.
In this way, aggregate values are explicated through individual behaviours of agents.
Do we Need New Methodology in Macroeconomics? 45
This approach clearly differs from the Keynesian tradition where certain aggregates
explicated other aggregated values (for instance, aggregated consumption is a function
of aggregated income).
However, this leads to a question about the nature of the representative agent and
its consequences for macroeconomic analysis. Are the agent’s reactions in line with
aggregated relations? Let us assume that we have an economy which consists of two
agents, X and Y, with the following respective import functions: and . Our aim is
to define a representative agent with an import function of , which would correctly
reflect the relationships between aggregate output and imports. To start with, let us
assume a manufacturing volume of 100 for both X and Y. This means that imports
for aggregate output equal 60. Therefore, a representative agent with an output figure
of 100 will import 60/2=30. The agent’s import function equals . Therefore, if we have
two agents with an import function of and an output of 100, then the aggregated
imports would equal 60, i.e. exactly the same as the actual value for two agents, X
and Y. However, this representative function of imports is unstable. Let us assume
that X manufactures by 50 more and Y makes by 50 less. As the aggregated output
is unchanged, our Representative Agent Model will still predict aggregated imports
equalling 60. However, the actual figure will be 70. Now, let us consider an increase
of 100 in aggregated output. Based on out Representative Agent Model we predict
that aggregated imports will equal 90. However, the actual figure will change from
80 (if the entire increase is due to Y) to 100 (if the increase is due to X). Obviously,
the model does not work well. The naïve belief about the compatibility of individual
and collective reactions leads to a failure. In order to ensure such compatibility we
must make more rigorous assumptions. One may identify conditions which will
stabilise the model: the import functions for all agents must be the same. This leads
to important observations. In order for the Representative Agent Model to generate
real relationships between aggregates, the agent cannot be representative in the sense
of being an average agent but it must be one of many identical agents. Therefore,
this model eliminates the diversity between economic agents. For instance, a typical
assumption regarding the attributes of agents that guarantees that a group behaves like
a representative agent is that all of them have an identical homothetic utility function.
Or, the function is not necessarily identical but homothetic and, additionally, the
distribution of incomes is independent of prices. Another very important assumption
which plays a crucial role in growth theory is that all enterprises have a homogenous
first-degree production function.
If we eliminate diversity and reduce a group to the actions of an individual
agent, this may have far-reaching theoretical complications. Let us consider the
46 Wojciech Pacho
example of the production of public goods. Public goods are characterised by

non-rivalled, i.e. once they have been produced, nobody may be excluded from
using them. If we assume that each member of a group pursues only an egoistic goal
of maximising its income, nobody will undertake the effort to produce such public
goods. Everyone will wait until goods have been produced by another group member.
Therefore, if we assume that egoism is a typical attribute then public goods stand
no chance of being brought into existence. However, both practical experience and
economic experiments prove otherwise. Public goods originate not only through
coercion exercised by governments but also through voluntary co-operation of
local communities. Therefore, one must take account of the existence of agents with
a prevailing altruistic motivation which are oriented towards co-operation in order to
achieve a common, beneficial goal. How can we build representative agent categories
based on diversified, sometimes very different, characteristics of individual agents?
In cases where we are dealing with diversified units and when the aggregate result
depends on types of interactions and reconciliation of various aims and views, an
analysis reduced to a study of representative agents will fail. Instead, the opposite
approach should be adopted: based on existing diversification of motivations one
should examine the mechanisms which lead to a shared outcome.
Another problem with attempts to reduce aggregates to attributes of an
individual agent is the restoration of equilibrium shaken by a disturbing factor.
If a representative agent consumes its own products, then adjustments made by
the agent within the consumption of its output are the mechanisms which restore
economic equilibrium. How about situations an exchange between agents is required
to restore equilibrium? Let us take the example of aggregate demand for money which
has been inferred from a representative agent’s optimising behaviour speaking, the
demand will be negatively correlated with the interest rate and positively correlated
with global output. Let us look at the difficulties in explicating the adjustment on the
money market after an increase in aggregated output. The transaction demand will
increase and, at a given interest rate and supply of money, this will lead to a surplus
of demand over the supply of money. In order to satisfy its higher need for money,
a representative agent will want to cash some of its assets. However, if the market
behaves like the representative agent, everyone else will want to cash their assets as
well. As a consequence, there would be nobody willing to get rid of cash and acquire
non-cash assets. A representative agent cannot cash its own assets by itself. This
example shows the trap of representative agent when discussing interactions at the
macroeconomic level: we arrive at a methodological contradiction which cannot be
overcome.
Do we Need New Methodology in Macroeconomics? 47
Analysis of the impact of policies on the economy based on the Representative

Agent Model also faces some difficulties. As a rule, such analysis is performed with
the use of comparative statics or by analysing transitions from one stationary period
to another. Policy variables are modified and the new equilibrium is analysed for
a representative agent. At this point an implicit assumption is made that after a change
in policy the set of typical attributes of the representative agent remains unchanged.
However, the simple example of import modelling has shown that the distribution
of output increases between agents lead to a change within the representative agent
itself. Therefore, changes in policy may influence agents in a variety of ways (in many
a case, policies aims to achieve such varied impacts). Therefore, it may happen that
the assumed structure of a representative agent will no longer represent the economy
after a policy change. In an attempt to ‘rescue’ this model it is often assumed that such
changes do not lead to ‘distribution effects’ i.e. effects related to the distribution of
the modified value across all enterprises.
Attention should be drawn to another element which weakens the usefulness
of the Representative Agent Model. The Model is based on an implicit assumption
that adjustments between agents are made smoothly on a well-functioning market.
Therefore, a solution which is optimal for a representative agent will also be optimal
for the economy as a whole. However, adjustment processes are not necessarily so
smooth and market failures may occur. This refers to situations where individual
decisions are based on observations of other agents’ behaviours. In that case reactions
displayed by some agents are a function of actions undertaken by other agents. In that
case we cannot assume that a population behaves like an individual agent because we
are dealing with mutual interactions. The Representative Agent Model is not suited
for analysing such situations. It is possible to demonstrate that the result of such
mutual interactions may lead to more than one equilibrium. This depends on the flow
of interactions and the degree of variety within interactions. From the perspective of
the population as a whole, such varied equilibriums may have different values. It may
happen that agents which optimise the pursuit of their goals will put the economy
into a disadvantageous equilibrium. In that case we will say that interactions between
agents are poorly coordinated if we want to optimise the aggregate goals. In order
to avoid disadvantageous equilibriums it would be advisable to co-ordinate the
interactions of agents which will otherwise lead to a disadvantageous aggregate result.
This problem seems to have an important practical significance as the knowledge of
erroneous coordination would inform policymakers, helping them to take corrective
measures. However, if the Representative Agent Model is used, one loses sight of such
important areas of study.
48 Wojciech Pacho
Do all the aforementioned weaknesses of the Representative Agent Model mean

that its end is nearing? I do not think this is the case. It seems that economics is now
at the stage where it is learning about the weaknesses of its previous and current
methodologies. The road to developing new analytical methods seems to be fairly
long.
WFES 1:2 2010
Sectoral Interest Groups

Leszek Gilejko*
Abstract
In this article the issue of sectoral interest groups in contemporary Poland is examined.
Public restructuring programmes significantly contributed to development of tripartite
sectoral social dialogue. Evolution of that type of social dialogue provides a dramatic
illustration of how the mechanisms of group interests conflict shaped the course of
industrial restructuring. Experiences accumulated over the years of conducting sectoral
social dialogue may now serve as a benchmark for regional modernization initiatives.
1. Contemporary Role of Interest Groups
In any modern society on the average development level, there exist and operate
different interest groups. They are undoubtedly products of economic development,
socio-occupational group formation and more general changes in the socio-economic
structure. In other words, groups of interest are products of social differentiation.
Nowadays, two opposite trends can be observed in the social structure:
polarization1 and equalization. The latter trend results from the enlargement of
middle class – the most significant segment of modern societies. Middle class
formation is stimulated, among other things, by the fact that new professions are
continually emerging from existing social classes and becoming socio-professional
groups.
* Aleksander Gieysztor Academy of Human Science, Pułtusk.

1 However, not to the same extent as in the 19th century.
50 Leszek Gilejko
The ‘new’ and the ‘old’ socio-professional groups do not have typical ‘class
ambitions’. They do not aspire to gain power in the way social classes do now or did
in the past. These groups more often take the form of interest groups which create
wide networks of relationships (it concerns especially collective interest groups).
Socio-professional groups, like social classes, are also engaged in conflict but in
a different kind of conflict. It is the typical industrial conflict in which parties belong
to different interest groups.
The main reason for the presence and dynamism of interest groups in modern
societies are continuous changes in the social structure. They are caused mostly by
the emergence of new socio-professional groups. Their existence and strategies are
also determined by ‘the old socio-professional structure’.
The model of capitalist development called fordism, which is based on the
properties of industrial society, provided fertile soil for development of interest
groups representing not only employers but also employees. In fact, it is the employers’
organisations and trade unions that are principal forms for interest groups.
Sociologists argue that ‘true’ (genuine) groups of interest emerge when people
belonging to a certain social category become aware of their common interests and
take action to defend them (Bolesta-Kukułka 2003: 280). These activities may also be
aimed at broadening their possession or, referring to power relationships, reducing
their asymmetry.
The institutionalization of industrial conflict occurred along with collective
bargaining in the labour relations. The emergence of this institution (along with
collective agreements and freedom of association) formed a classic scenario of
industrial conflict, which now consists of four integral parts: negotiations, conflicts,
compromises and agreements, and made industrial conflict a permanent element of
the ‘social game’. The institution of collective bargaining influenced also the speed
and character of interest group development.
Another important factor which influences the development and dynamics of
interest groups are their relationships with ‘public power’, primarily with the national
authorities. Formally, the public administration in its relations with various interest
groups represents not only the state itself but also the society and an important
part of economic sphere. In this context, public administration does not only refer
to public officials and officers but also to state authorities and the whole political
system.
Public administration and interest groups constitute significant and stable
structures of a political system. Therefore ‘in most modern societies, the conflict
between the aspirations of pressure groups and the role of public administration in
Sectoral Interest Groups 51
decision-making processes is one of the most important problems, which the political
systems must face’ (Chatagner 97: 196).
However, it must be stressed that relationships between public administration
and interest groups are not only based on conflict. Their relationships may take
different forms. In many countries, to a greater or lesser extent, various interest
groups legally participate in a decision-making process. This is particularly true for
organized formal groups, which have the legal setting: ‘The formal interest group
articulates its claims in a public sphere and does it either explicitly or through
collective demonstrations, or through collective bargaining with decision-makers’
(Wnuk-Lipiński 2005). These relations are even characterized by some persistent
patterns. Guy Peters (1999) lists at least four patterns in relationships between
public administration and interest groups: (1) legal relationships (2) clientelism,
(3) parantelism and (4) illegal relationships.
The first ‘pattern’ usually takes the form of corporatism. Wnuk-Lipiński (2005)
defi nes corporatism as ‘a way of resolving social confl ict through continuous
and institutionalized involvement in decision-making process by organized and
recognized groups of interest which are affected by those decisions’. In practice,
corporatism does not only refer to conflict resolution. It is also the institutionalized
interaction between groups of interest and state authorities. Corporatism may also
be seen as the cooperation between various groups that have not only different but
also common interests.
Some authors distinguish between ‘social corporatism’ and ‘state corporatism’.
State corporatism refers to ‘peak level bargaining between trade unions, employers’
organisations and government’ (Morawski 2001). Another feature of state corporatism
is that its most significant actor and participant is the public administration. It is also
related to a decision-making process which is connected mostly with the economic
sphere.
In many countries, the groups participating in this process are organized interest
groups which represent primarily: entrepreneurs (employers’ organisations) and
employees (trade unions). In addition to these groups, also professional associations
are involved, and when the bargaining process ‘evolves’ toward a ‘social dialogue’,
local authorities participate as well. Furthermore, representatives of other groups also
participate in corporatist institutions. Those groups may belong to larger and wider
formations, however they have their own separate interests and/or are convinced
that their interests are dominated by more powerful groups. An example of such
groups may be farmers’ organisations as well as small and medium businesses which
are sometimes described as peripheral sectors of economy. Separate organisations,
52 Leszek Gilejko
because of their specificity and impact on general market functioning, are created
also by public sector companies.
Within corporatist systems, coalitions between different groups of interest
are formed. Within those coalitions, different groups support the most important
formation. ‘Different spheres of social life are marked by the presence of many
groups of interest. Each of those groups has its own view on how to solve problems
of collective life and every group, in cooperation with others, strives for their views
to be most commonly reflected in legal rules’ (Guy Peters 2000: 218).
In European countries, corporatism may be found in the two above described
forms: (1) social corporatism (also called liberal corporatism or neo-corporatism)
and (2) state corporatism. For example, countries where corporatism is the most
conspicuous are Germany, Austria, France and the Scandinavian countries.
Clientelism, in a sense, is a variation of corporatism. It refers to a situation when
only one interest group, among others, is considered by authorities as representative
in a particular area (it is given official recognition). In this way, ‘the chosen’ group
gains special importance and shapes the relationships between public administration,
other groups of interest and the parliament.
In parantelism on the other hand, relationships between interest groups and the
authorities are formed by the most important (ruling) political party. Interest groups
set up close relationships with this party, and support it – in return for the influence
on decision making-process.
Many authors argue that the world of politics (and its significant part which is
public administration) is an area of continuous games between different pressure
groups. In these games, public administration is frequently taking part as an interest
group alone or as a coalition member of other interest groups (e.g. sectoral or regional
groups of interest). Public administration, officials and officers often melt into the
world of games between groups of interest. These relationships are characterized
by many informal relations and, not infrequently, corruption (particularly political
corruption).
In a broader context, organized interest groups constitute a significant component
of democratic systems, often called participatory and consensual democracy. In these
systems both responsibility for decisions and the process of decision-making are
collegial. Additionally, representatives of different society sectors also participate in
the decision-making process (Nalewajko 2005).
An integral part of democratic systems, associated with organized interest
groups, is also the institution of lobbying. Lobbying, according to the definition given
by Wnuk-Lipiński (2005), means: (1) to exert informal pressure on decision-making
bodies by the groups which are interested in the effects of particular decisions and
(2) advocacy of interests by organized groups. Lobbying activities may be carried
out through different channels: informal (personal) contacts, institutions (agencies),
mass media etc. As Wnuk-Lipinski (2005) defines it: ‘lobbying means persuading
decision-makers (members of parliament, legislative bodies and officials) into
somebody’s rights and arguments but it also provides them with information, ideas,
expertise and even ready-made solutions to specific social problems’.
Groups of interest operate also in transnational social space, in particular within
institutions. A good example is the European Union. Most of the EU institutions are
under formal and/or informal influence of organized (also multinational) groups of
interests (e.g. sectoral agencies).
The interests of large business are represented by the Business Council (200–
300 largest companies and corporations), small and medium-sized companies are
represented by the European Small Business Council – and interests of labour by
the European Trade Union Confederation (ETUC), and European Secretariat of the
Liberal, Independent and Social Professions, (SEPILS) and other representatives of
the top industries.
According to European Parliament (2003), in 2000 more than 2.600 interest groups
had a permanent office downtown Brussels, of which European trade federations
comprised about a third, commercial consultants a fifth, companies, European NGOs
(e.g. in environment, health care or human rights) and national business or labour
associations each about 10%, regional representations and international organisations
each about 5%, and, finally, think tanks about 1%.
To summarize, groups of interest (particularly organized and formal ones) play,
as a dynamic element, an important role in transforming social structures. They
are also a significant factor which stabilizes social systems not only in the economic
sphere. Groups of interest participate in conflicts but, as mentioned above, conflicts
take institutional forms. They are a permanent element of collective bargaining
and labour relations. They create relationships between the economic sphere and
political systems. They are an important element of institutions in participatory and
consensual democracy and the main creator of lobbying. However, groups of interest
happen to be a negative participant of those relations – they participate in corruption,
very often distort and decrease the efficiency of institutions and public administration.
The role of interest groups will probably increase. There may emerge new fields
and dimensions for their activities, the European social space may serve as a good
example. Their development and dynamics will also be affected by the process of
globalization.
54 Leszek Gilejko
2. Interest Groups in Post-Soviet Order
Almost every scientist who studies the transformation process in the Eastern
European countries argues that its major goal was to form a new social order with
democracy and market economy being its foundation.
The state reached after nearly two decades of transformation is described generally
as a post-socialist or post-monocentric order. The terminology differences result
mostly from different assessment of the past and sometimes different ideological
inspirations of authors who work on this subject. However, apart from the differences
in terminology, it is worth mentioning that among researchers there are also other
disputes. In particular they refer to the proportions between the quantity of ‘old’
elements and the ‘new’ ones in the emerging social order in transition countries, the
level of deformation and scale of their pathologies.
There is however consensus that the contemporary socio-economic reality in
Poland is affected by both: past authoritarian socialism (monocentric order) and the
new structures which were formulated in the process of ‘great change’. Despite the
disputes among researchers about the scale of differences between the present and the
old socialist system, scientists indicate that the Polish socio-economic reality, like in
other transition countries, has the form of a hybrid (and the Polish society may still
be described as ‘on the way’ with unfinished transformation).
With the transition to market economy, like in other areas of social life, social
structures underwent transformation. New segments of social structures emerged, in
particular, business and entrepreneur class (the so called ‘returning class’).
The changes within the social structure along with transformation of the
authorities had and still have a significant impact on interest groups. Since the
beginning of transformation, interest groups have been forced to operate in different
circumstances and conditions as well as articulate their interests in a different way
and choose different strategies.
Much of transformation research stresses that each transformation produces
at least four consecutive processes which are connected to interest groups: (1)
destruction of some interests (2) struggle for transfer of old interests into a new reality
(3) emergence of new interests (4) decomposition and recomposition of interests.
Transition from a centrally planned economy to a market economy must produce
new articulation and relationships of interests. It also evokes a struggle for survival
and adaptation for the groups and social classes which were dominant in the past
economic system (Wesołowski 1995).
In the post-socialist order, interest groups, their activities and strategies gain
new dynamics. They have become either active actors who stimulate the process of
transformation or ‘conservative’ defenders of old structures and hierarchies. Also,
new relationships between those interest groups and authorities have emerged.
A similar division may also be observed within a society itself. As Rychard (2005)
and other authors argue, during the transformation process two large social groups
emerged in the Polish society: ‘modernizing’ and ‘precautionary’, i.e. ‘Poland within
transformation’ and ‘Poland beyond transformation’. The characteristics of these
two large groups are different, but in both there are groups of interest that have
reformatory or conservative orientations and strategies.
It must be stressed that there are mutual relationships between strategies,
transformation process and interest groups. On the one hand, the strategies adopted
by interest groups are a product of changes, on the other hand, changes and their
dynamics depend on actions taken by interest groups. In the new system, interest
groups may choose a number of different strategies, which shows that new possibilities
for action are now available to them. In fact, this ‘freedom of choice’ between different
strategies may be the indicator of the transformation scope – if transformation is
‘deep’ and of wide scope, then interest groups may choose many more different
strategies than in the past system.
Groups of interest, especially those which were formed in the socialist system,
have to adapt themselves to the new rules of the game so that they still can influence
those rules. The new groups, however, wish to abandon old rules and formulate
new ones which are consistent (in general) with the interests of the private sector
(‘the returning class’) – the group which was underprivileged in the authoritarian
system.
Adapting to new rules may take the form of one or two of the following strategies:
(1) defending interests by groups previously formed, according to the logic of the
old system; (2) redefining interests and establishing new interest groups. Therefore,
the function of new interest groups would be, according to the new system’s modus
operandi, flexible redefinition of social interests in terms of the best short-term
benefits.
In a socialist, monocentric system of governance, strong but informal interest
groups developed. Their most fundamental purpose of action was to influence the
decision-making process of the state and party administration (bureaucracy). Their
56 Leszek Gilejko
existence and actions, as many authors point out, significantly contributed to the
breakdown of the old socialist system and its relatively peaceful agony2.
The informal structure formed in the past socialist system is defined as ‘socialist
corporatism’. Socialist corporatism differs from national corporatism with respect
to that fact that its implementation was not a consciously adopted institutional
solution. This structure cannot be classified as ‘social corporatism’ either. Socialist
corporatism does not emerge as a result of agreement between state authorities and
interest organisations. It is, however, the consequence of dysfunctional (pathological)
adaptation of different interest groups and organisations to imposed conditions
which cannot be changed. Therefore, its emergence is not the sign of evolution but
erosion of socialist system. Socialist corporatism did not constitute institutional
alternative which offered new possibilities and perspectives for development of
the system. It was, however, a controlled, polycentric but hierarchical mechanism
of interest coordination, which allowed the system to stay afloat but at the cost of
draining resources. The final stadium of this system was a peaceful agony, incorrectly
defined as revolution (Hausner 1992).
Erosion of the socialist system was a significant but not the most important
cause of its collapse. The most important role in this process was played by the
democratic revolution. In fact, the socialist system collapse was caused by two
simultaneous processes: its erosion and decay as well as contestation-based social
movements supported mostly by working class (the so called democratic revolution
of ‘Solidarity’). However, the nature of the entire process is much more complex. It
results from the fact that working class, and in particular workers from the largest
enterprises, constituted the cornerstone of ‘Solidarity’. At the same time, however,
they ‘belonged’ to interest groups which had their own sectoral preferences. In the
socialist system, these sectors were very much privileged in comparison to the other
sectors of economy and were regarded as strategic. Not surprisingly, the interest
groups of a particular industry wanted to preserve their privileges, usually at the cost
of other social groups. This kind of attitude had to cause conflicts between sectoral
and other interest groups, including the state authorities.
In the socialist system, the strong sectoral interest groups, especially in the
privileged industries, put different types of pressure on the state authorities. However,
the goal of the strikes organized by employees was to protest against the authorities
and party bureaucracy – they were very much transformative by nature. The
accumulation of strikes at the turn of the 70s and 80s may be regarded as the beginning
2 See Wnuk-Lipinski (2005)

of transformation in the political sphere. It does not mean, however, that ‘sectoral
past’ among these groups lost its influence. According to Hausner and Marody (2001),
‘old groups of interest’ are still present in the Polish socio-economic sphere. The
above mentioned authors list three particular groups of interest: (1) political class,
(2) ‘the winning losers’ (i.e. groups which are very efficient in their protests and
strikes) and (3) business class. The political class, according to the authors, is the
hostage to the group of ‘winning losers’ and very often yields to this group. It is
similar to Mokrzycki’s view who claimed that true political game in Poland is played
between strong pressure groups and public authorities, leaving aside the weak civic
society3.
As a result, two systems of collective life emerged: (1) a weak system with almost
non active parliamentary democracy and (2) a strong system with quasi-corporationist
agreements between authorities and potentially dangerous social groups (winning
losers). The second system is characterized by the presence of particularly strong
sectoral and organized interest groups, which emerged in the past socialist system.
Coal miners, a strong pressure group, are the most commonly given example of
a group operating in the second system.
During the transition, new relations emerged between public administration,
executive and legislative power and groups of interest. According to some authors,
the dominant features of those relations are clientelism and corruption. This stems
primarily from the relation between politics, business and economy as a whole before
and during transition.
In the socialist system, as mentioned above, the state administration had
omnipotent power over economy and the free articulation of interests was prohibited.
In such an environment, the establishment of informal interest groups seeking
co-operation with administration was a natural consequence. Not surprisingly, in the
socialist system the omnipotent administration had strong incentives to get corrupt.
After the socialist period much of this tradition has been inherited. A very good
example of corruptive quasi-corporatist attitude is filling the posts in the supervisory
boards of state companies, with ‘experts’ delegated by public officials or members of
the government. So far every ruling party in Polish political scene has been prone to
take advantage of their power and rent seeking behavior. It naturally forms a fertile
ground for various ‘agreements’ or ‘coalitions’ between the authorities and interest
3 The author refers to a very popular view expressed by Edmund Mokrzycki (which referred to
miners’ demonstrations in the 90s) that ‘a lightly armored miner’ has much more influence on politics
than ‘a townie with a voting card’.
58 Leszek Gilejko
groups. In consequence, it is now becoming less clear whether the authorities are
hostage to strong groups of interest (derived from ‘winning losers’) or whether the
state authorities themselves are a group of interest.
3. Sectoral Interest Groups Versus (and) Restructuring
The attitude towards the restructuring process is one of the most important criteria
for the assessment of interest groups’ role in the socio-economic sphere. Restructuring
affects the entire economy, therefore it is regarded as one of the most significant
elements of transformation.
If transformation is perceived as a ‘civilization-related change’, then one of its
most important goals would be modernization. Modernization in turn is based on
and driven by economy. Generally speaking, the criteria of modernization in the
economic sphere are following: (1) changing the economic structure, (2) reducing the
role of agriculture and industry, (3) limiting the role of traditional industries (raw
materials, steel, certain sectors of the textile industry), (4) dynamic development of
services, (5) increasing the importance of new management methods, (6) and, above
all, human capital development.
One of the effects of modernization is informatization, especially in the economic
sphere. In this context, informatization refers to: producing information and
communication technologies (ICT) as well as producing the information itself. The
evolution from industry-based economy has been defined as new economy or market
infrastructure. In the social sphere, the effects of modernization are seen in quantity and
quality of human capital and, more broadly, in the development of information society.
Before the transformation began in the Eastern European countries, the process
of modernization, controlled by the socialist bureaucracy, had been based mostly on
industrialization. As a result, the process of restructuring was particularly difficult
in those industries which had been given high priorities and privileges in the past
socialist system.
Restructuring and privatization are the most significant processes in the economic
sphere of transformation. As regards the process complexity, restructuring has been
even more complex than privatization and it ‘brought more modernization’ into the
economy – see the explanations below.
Firstly, the process of restructuring applied to the sectors which were strategic
and preferential in the socialist system. Secondly, the scope of changes was very
large and changes were proceeding at a relatively fast pace. Thirdly, employees
working in those sectors were highly organized and played a major role in the
process of transformation – they were the social basis of ‘Solidarity’. Some of those
industries (e.g. metallurgical and defense industries) were strongly influenced by
a ‘self-governing movement’, while workers organisations of ‘Solidarity’ formed
the so-called ‘Network’. The Network covered the largest industrial enterprises,
including those under restructuring programs. Fourthly, enterprises included in
the restructuring process were very often concentrated on relatively small areas
(large spatial concentration). Some of them (mines, steelworks) were the economic
foundations of the industrial monoculture of entire regions. Fifthly, the restructuring
process was conducted on the basis of governmental programs. At least three
different groups participated in the preparation of those programs: (1) government
administration and the parliament (which means that also political parties were
indirectly involved in that process) (2) managers of the restructured enterprises and
(3) trade unions.
It means that the parties involved in the restructuring process were organized
interest groups with substantial resources. From the very beginning the process was
accompanied by tensions and multiple conflicts in relationships between those groups.
The major line of conflicts was between the interest groups called ‘the reformers’ and
‘the conservatives’, between the forces of transformation and the forces defending the
status quo. Not surprisingly, the major opponents of reforms (especially restructuring
and privatization) were the ‘old and privileged’ industries, particularly in the defense
industry and mining.
Many sociologists, already at the beginning of the nineties, indicated that the
behavior of interest groups in the Polish industries subject to restructuring may
serve as a good example of ‘the fight for transferring the past interests into new
reality’. Sociologists argued that this type of transfer was the easiest way for those
groups to defend their privileges and resources which had been given to them in
the past system. The attitude of interest groups in the mining industry (especially
in the nineties) serves as a very good example of a fight for such transfers (See:
Wnuk-Lipinski 2005).
In the process of restructuring, apart from conflicts, new relationships emerged
between the authorities and strong organized interest groups – the ‘winning losers’.
Although formally the government was preparing the restructuring programs, in
practice the contents of those programs were developed under the pressure of trade
unions. The scope and complexity of the restructuring process are illustrated in
Table 1.
60 Leszek Gilejko
Table 1. Restructuring Programs in Selected Industries in Poland

Changes in Changes in Foreign
Changes in
Industry production number of Privatization financial
employment
scale enterprises resources
Mining drop in output closure of 24 privatization reduction in EU, world bank
from 190 to out of 70 coal of profitable employment by
90-100 million mines enterprises 40 percent
tons annually
Power industry increase in increase in privatization reduction in EU
output (change the number of excluding employment by
of resources) enterprises Network 10 percent
equipment
of the power
system
Iron and steel drop in steel closure of privatization reduction in EU
industry production by the oldest employment by
40 percent to and ‘dirtiest’ 50 percent
10 million tons steelworks
annually
Defense drop in decrease in partial reduction in
production the number of privatization employment by
enterprises 70 percent
Railroads cutting the decrease in privatization reduction in EU, World
length of the number excluding employment by bank
railroads of major polish rail 50 percent
and decrease enterprises, (PKP)
in railroads creation of new
carriage enterprises
Source: Author’s.
Table 1 illustrates that the reduction in employment, which is one of the most
crucial areas in the process of transformation and modernization, was significant in
particular industries. It must be stressed, however, that the employees of the above
industries had their own ‘occupational specialties’. Miners and, to a lesser extent,
steelworkers constituted hermetic, inflexible occupational groups which, in the past
system, had had stable professional careers. One should remember that many miners
cultivate a traditional family model in which the father is the only bread winner4.
The railroad workers, with a strong tradition of being public servants, had their own
4It means that 85 000 people who left mining in the years 1998-2001 maintained more than
200 000 other people. See: Szczepański: 2003.
occupational elite: ‘the engine-drivers’. Besides, the railroad transport, along with the
power industry, is classified as an infrastructure industry which is essential to the
society not only because of its economic importance. For obvious reasons, the defense
industry and its employees were ‘under special surveillance’ and enjoyed additional
rights and privileges in the socialist system.
As it was mentioned before, the transition to market economy requires
reallocation of resources across activities through the closure of inefficient companies
and, in consequence, the establishment of new ones. It also requires restructuring
of existing companies, which is often connected with the reduction in employment.
Both processes are closely tied together and are aimed at raising productivity and
helping the ‘national economy’ to compete on the international market. Additionally,
restructuring processes in Poland were connected with pre-accession criteria for
joining the European Union. After the accession, they have been consistent with the
EU directives, particularly with reference to public support.
Restructuring has been a great socio-economic challenge, particularly for the
employees of industries under restructuring, their families and local and regional
communities. Not surprisingly, the regions characterized by a high concentration
of industries subject to restructuring have been affected by this process to the
largest extent. The Silesia region, with the highest concentration of ‘traditional’
industry, may serve as an example. As a result of recession or plant closure due to
privatization or bankruptcy, the number of industrial workplaces in the former
Katowice voivodship fell by almost 300 000, which was only partially compensated
by job creation – Szczepański (2003). Despite the restructuring plan for the mining
industry launched by the Jerzy Buzek administration in 1998 and other labour market
reforms introduced by consecutive governments, social and material degradation of
workers from heavy industries has not been stopped.
The effects the restructuring process had on the defense industry were just as
dramatic. The defense industry’s factories were very often situated in ‘non-industrial’
regions and constituted a very important source of work for people from the
surrounding rural areas. Their closure, like in the case of coal mines, caused social
and economic problems for a number of local communities.
However, during the restructuring process the working class was not passive.
Trade unions, in particular in the restructured industries, to a large extent influenced
– as organized interest groups – the types and pace of reforms being implemented.
The significant strength of the labour movement resulted from (1) substantial
resources at their disposal – over 60 percent of workers employed in those industries
62 Leszek Gilejko
were members of trade unions, (2) and experience in confrontational actions, gained
already in the past system. As a result, trade union leaders had solid grounds for
acting as pressure groups with considerable strength.
Trade union leaders, depending on their interest, could choose between
different strategies for their action. The first, called ‘the survival strategy’, refers to
the preservation of the past privileges (e.g. subsidies, allowances) and demanding
protection from the government. The second strategy is called a ‘confrontation
strategy’ or ‘conflict strategy’. It could result in total opposition to reforms and
even in mass demonstrations. The ‘lighter form’ of conflict strategy was a ‘claiming
strategy’. Its objective was to gain, for the price of social peace, a wide range of
‘privileges’. The relevant interest groups approved the process of restructuring but
demanded a number of privileges at the same time. In practice, those privileges
took the form of social benefits (e.g. early retirement age, redundancy payments
etc.). In consequence, the number of social benefits in the restructured industries
was much higher than in companies which were privatized indirectly (capital
privatization).
Negotiations and direct pressure (strikes, manifestations) have been the most
common forms of this strategy. In his studies, Gilejko (2003) gives an example
of a social protection package given to steel workers. The draft of the package
was prepared as early as 1992 but adopted by the government only after a strong
manifestation in 1998. As one of the trade union leaders put it, ‘only the threat of
a general strike convinced the government to give the due privileges to steel workers’.
A similar strategy, and with a similar result, was used by trade unions in other
restructured industries.
The fourth type of strategy is the so-called ‘participatory strategy’. In this
strategy, trade unions participate along with other parties (usually the government
and employers’ organisations) in the decision-making process. In this process, a very
important factor of successful cooperation is trust between the actors. Moreover, the
participating actors must be aware of their responsibility for enterprises and sectors
affected by their decisions. The actors must also realize that they work for common
interests.
In the restructuring process, the ‘participatory strategy’ was realized through
the institution of Tripartite Branch Units (Sectoral Teams) (sector-based tripartite
units). This strategy was a combination of participatory and claiming attitudes of
trade union leaders (see Table 2).
Table 2. Participants and the subjects of Tripartite Branch Units (Sectoral Teams)
Name of a tripartite
The most important agreements
branch unit and date Branch Unit’s participants
reached
of its establishment
Committee for Miners’ Participants: Agreements concerning
Social Security (1994) − 10 trade unions’ organisation restructuring programs for
− employers’ organisation of hard 2004-2006 and 2007-2010, new social
coal mining industry security programs, programs to make
− representatives of government ex-miners professionally active
and other agencies (Industrial
Development Agency, State
Mining Authority, Agency for
Hard Coal Mining Restructuring)
– around 70 persons
Committee for Participants: Activation Programs for former steel
Social Conditions − 5 trade unions’ organisations workers, changes in restructuring
of Restructuring − Employers’ Organisation of programs concerning privatization
Metallurgic Industry Metallurgic Industry
(1995) − representatives of the government
– around 50 persons
Committee for Electric Participants: Evaluation and changes to the
Power Sector (1998) − 7 trade unions’ organisations governmental program: ‘Assumptions
− 6 employers’ organisations of Poland’s energy by the year 2020’
− representatives of the government changes concerned particularly
(around 40 persons) the conditions of employment and
redundancies and social security
programs in privatized companies;
evaluation of ‘The Government’s
Ownership Policy concerning power
and electric branch’
Committee for Participants: Changes in restructuring programs:
Railroad (1998) − 7 trade unions’ organisations limitation of railroads closure, new
− Railroad Employers’ Organisation activation programs, financing new
− government representatives investments (especially regional
(around 50 persons) transport)
Source: Ministry of Labour and Social Policy, The Report of Tripartite Branch Units 2005.
Tripartite Branch Units played an important role in formulating the restructuring

policy. Nevertheless, negotiations within those institutions were sometimes stormy,
or even broken off by trade unions which additionally organized protests and strikes.
It must be stressed, however, that such confrontational actions always concerned
socio-economic issues of great significance.
Trade union leaders attached great importance to those institutions and the
process of restructuring. A similar view was held by the managers and employees
64 Leszek Gilejko
of restructured enterprises. What is interesting is that managers more often (than

employees) claim that trade union leaders played an active and important role in the
restructuring process – see Table 3 and Table 4.
Table 3. Employees’ evaluation of trade union participation in the restructuring

process in 2002 and 2005
NSZZ ‘S’ OPZZ Other trade unions
2002 2005 2002 2005 2002 2005

1. Trade unions actively
participated in the preparation
56,0 47,1 49,0 40,8 44,0 34,1
and implementation of
restructuring programs
2. Trade union is not interested
in restructuring, it cares
only about the high level of 20,0 32,0 21,0 25,6 24,0 18,7
social security protection for
employees
3. Trade union is not in favour
of restructuring but it tries to 32,0 33,0 33,0
counteract employees’ protests
4. Trade union is prepared only to
13,0 30,1 15,0 24,0 17,0 21,7
protest against restructuring
5. Trade union leaders are
mainly interested in their
48,0 52,5 42,0 47,5 37,0 36,5
own situation and posts in the
managing boards
Source: Gilejko: 2006.
Table 4. Managers’ evaluation of trade union participation in the restructuring

process in 2002 and 2005
NSZ’S’ OPZZ Other trade unions
2002 2005 2002 2005 2002 2005

1. Trade unions actively
participated in the preparation
60,0 62,9 63,0 61,8 58,0 62.1
and implementation of
restructuring programs
2. Trade union is not interested in
restructuring, it cares only about
18,0 34.3 19,0 35,3 27,0 24,1
the high level of social security
protection for employees
NSZ’S’ OPZZ Other trade unions
2002 2005 2002 2005 2002 2005

3. Trade union is not in favour
of restructuring but it tries to 33,0 35,0 34,0
counteract employees’ protests
4. Trade union is prepared only to
7,0 23,4 14,0 29,4 12,0 20,7
protest against restructuring
5. Trade union leaders are mainly
interested in their own situation
27,0 34,3 23,0 32,4 24,0 20,7
and posts in the managing
boards
Source: Gilejko 2006.
Table 3 and Table 4 illustrate that the number of employees and managers
positively evaluating the trade unions’ role in the restructuring process decreased.
However, the positive opinions were still predominant. The managers are generally
more prone to positively evaluate the trade unions’ role in the restructuring process
than employees (in every category). What is more interesting is that the number
of employers who said that ‘trade unions actively participated in restructuring’
increased while the number of employees significantly decreased. More people in
both groups negatively evaluated other aspects of trade unions’ activity. It refers
particularly to the behavior of trade union leaders. According to respondents, more
trade union leaders were only concerned with their own interest in 2005 than in
2002. This observation confirms the fact that trade union leaders very often constitute
a separate interest group.
Gilejko’s research (2006) also shows that, in his respondents’ opinion, trade
unions were active pressure groups. 51 percent of managers, 56 percent of employees
and 78 percent of trade union leaders confirmed that it was only because of the
pressure from trade unions that the government considered the view on restructuring
held by managing boards of enterprises. Most respondents also confirmed that
restructuring programs were in general formed in cooperation between the managers
and the trade unions5.
Since the beginning of transformation trade unions have influenced the
restructuring process in different ways. In the fi rst period of transformation
(1990–1992), characterized by profound socio-economic changes (‘shock therapy’)
574 percent of managers, 61 percent of trade union leaders and 54 percent of employees agreed
with this statement; Gilejko: 2006.
66 Leszek Gilejko
and social instability, the first governmental restructuring programs were created
under the pressure of trade unions. What is even more important is that their
activities in the later stages of transformation resulted in the creation of Tripartite
Branch Units.
In this way trade unions (along with employers’ organisations) became ‘the
institutional’ actors in the restructuring process. As a result, it was much easier for
them to choose the ‘participatory strategy’ instead of the ‘strategy of conflict’.
In general, the activities of Tripartite Branch Units and trade unions resulted
probably in higher transformation costs – but only in financial terms. It must be
underlined that the entire process of transformation, very complicated in its nature,
has been much more peaceful in Poland than in other countries.
Some authors argue that during the transformation process trade unions forced
governments to look for alternative solutions which, although very often not in
line with economic calculations, were much more acceptable to the society. Others
argue, however, that those actions were the main detaining force in the restructuring
process and that trade unions demanded extensive social benefits for their members
at the cost of the society.
Another questionable issue is related to the role of trade unions in privatization.
It particularly concerns the coal mining industry, PKP (Polish State Railways), and to
a lesser extent the electric power industry where a lot of conflicts can be observed. The
research conducted by Gilejko (2006) shows that the majority of trade union leaders,
managers and employees were against privatization in the coal mining industry and
PKP. Only in the electric power industry were the managers (83 percent) in favour of
privatization but trade union leaders and employees were against. In the case of PKP,
trade unions indicated that the railway generally fulfils both an economic and social
function, and in the case of the coal industry those groups indicated its strategic role
as the fundamental source of energy both for the industry and the society.
To sum up this part of discussion, it should be stressed that trade unions have
played an important and generally positive role in the restructuring process in
Poland. Trade unions and their leaders proved that, when given the opportunity
to participate in the decision-making process, they may abandon the fight for their
industry’s exclusive interests and may agree to cooperate with other actors for a wider
social interest. As a result of this cooperation, the process of restructuring gains social
acceptance and may be conducted in a more peaceful way.
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socjalistycznego. Warszawa: Fundacja im. F. Eberta.
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ogólna. Warszawa: Of. Wyd. SGH.
Rychard, A. (2005), ‘Rozproszona Polska. Wstępna próba bilansu socjologicznego’, in:
Domański, H., Rychard, A., Śpiewak, P., Polska jedna czy wiele? Warszawa: Wyd. Trio.
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Industry Regions’, in: Blazyca, G. (ed.), Restructuring regional and local economies.
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Wesołowski, W., (1995), ‘Niszczenie i tworzenie interesów w procesie transformacji’. Kultura
i Społeczeństwo 2.
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Wódz, K. (2001/2003), ‘Od dezindustrializacji do wykluczenia‘, Barometr.
WFES 1:2 2010
Keep Trying?
Polish Failures and Half-successes
in Social Pacting1
Juliusz Gardawski, Guglielmo Meardi*
Abstract
Social dialogue in post-1989 Poland has followed a long and curvy road. Introduction of
tripartism, establishment of social dialogue institutions and conclusion of the ‘Pact on
the Transformation of State Enterprise’ in 1993 propelled high hopes and expectations
towards the domestic mutation of neocorporatism. In the following years, however,
social dialogue in Poland would not produce another social pact, despite the fact
that tripartite institutions have been working on regular basis and number of minor
agreements have been consensually reached. The overall reception of Polish social
dialogue both locally and internationally has been mixed with negative opinions
prevailing. The article aims to show that such dismissive views are oversimplified by
providing an account of obstacles, functions, chances and achievements social dialogue
has had in Poland in comparison to western countries that did sign social pacts.
* Juliusz Gardawski, Department of Economic Sociology Warsaw School of Economics; Guglielmo

Meardi, University of Warwick.
1 The paper originally appeared in: Pochet, Ph., Keune, M., Natali, D. (eds.) ( 2010), Aft er the euro
and enlargement: social pacts in the EU, Brussels: ETUI and OSE. Reprintem upon permission by the
publisher.
70 Juliusz Gardawski, Guglielmo Meardi
Introduction
Poland’s experience of social dialogue is mostly dismissed as pure failure and

façade (Ost 2000; Avdagic 2005). Indeed, there is little evidence of those major,
encompassing, comprehensive and institutionalised agreements that have been called
‘social pacts’ in Western Europe. However, a deeper and more detailed examination of
the interactions between the actors shows that there have been very serious attempts
at social pacts, and there have been some unintended effects of these attempts, as
well as some partial results. It also shows that there has been a ‘functional need’, or
demand, for social pacts at certain times, to address similar issues to those tackled
by western social pacts in the 1990s, such as wage inflation, pension reforms, labour
market reforms, public deficits (Fajertag and Pochet 1997, 2000). In terms of ‘offer’ for
social pacts, even if initially most ‘prerequisites’ were missing, by the early 2000s most
factors associated with social pacts were being established: political commitment on
the part of weak governments, growing trust among social partners, trade union
de-politicisation, EU promotion and employers’ organisational capacities. Recently,
a generalised perception of a crisis has also emerged. The issue, therefore, cannot
be dismissed as ‘nonexistent’. In contrast, there are two open questions, which this
chapter will try to address: what, if any, are the effects of social dialogue in Poland,
even if there are no major social pacts? Second, why exactly did Poland fail to reach
social pacts, and will failure persist in the future?
The paper proceeds in a historical way and is based on in-depth direct
observations. In particular, one of the authors has been an invited observer at
the meetings of the plenum of the Tripartite Commission from 2002 until today,
and therefore possesses a unique degree of insider information. This information
is put in the structural context of Polish social developments, in order to suggest
deeper explanations of the events. As today’s Poland is marked by the ‘transition’
from communism to capitalism, the discussion cannot start from later than 1989.
While the paper focuses on Poland only, it follows a comparative social sciences
approach to historical analysis, as the most appropriate to tackle causal analysis
(rather than description) and processes (rather than single events) in a small number
of countries and in the absence of counterfactuals (Mahoney and Rueschemeyer
2003). Accordingly, the obstacles, functions and chances social dialogue has had in
Poland will be compared (as systematically and contextually as possible, given the
limits of a book chapter) to those encountered by western countries that did sign
Keep Trying? Polish Failures and Half-successes in Social Pacting 71
social pacts, in order to distinguish those obstacles that may be insurmountable

from those that clearly are not – as they have not been in the West (Meardi 2006).
In this way, we also want to overcome a common weakness of studies of industrial
relations in post-communist countries, namely the tendency to use ad hoc arguments
(e.g. cultural or historical) rather than rigorously testing the same explanatory
frameworks as those used in the West: while different analytical frameworks may
have been justified when Eastern Europe belonged to a different economic system,
they are less so after twenty years of market economy and accession to the WTO,
OECD and EU.
The paper will look at the different periods of social dialogue in Poland since
1989, characterised by different government coalitions. It will point at some, hitherto
neglected, outcomes of social dialogue, in terms of partial or technical agreements,
capacity building, and trust development. In particular, attention will be drawn
to the early 2000s, where there has been an important ‘window of opportunity’
for a social pact, and a sustained government effort to achieve it. Rather than no
need for or interest in social dialogue, there are specific, complex and changing
barriers to social pacts, which need to be understood. Notably, it will be argued that
while cultural and political variables only explain a part of the failure, the main
distinctive obstacle lay at the time in the unequal balance of power between labour
and employers, which, as E.O. Wright (2000) has explained in particularly elegant
theoretical terms, explains the possibility of ‘social compromise’ in some countries
rather than others.
As the barriers to social dialogue appear to be complex and very volatile, they
cannot be taken for granted for the future: actually, the new landscape emerging from
the parliamentary elections of 2007, and the changes in the labour market following
mass emigration, may give new meanings to social dialogue.
1. The ‘Transition’ Mark: the Negotiated

Exit From Communism (1980–1989)
As argued by Bruszt and Stark (1998), the country-specific modes of transition from
communism have had important influences on the later path of central eastern
European countries. In Poland, ‘social pacts’ are not actually a novelty introduced by
democratisation, as there had been two famous precedents in the 1980s: the Gdańsk
agreements of 31st August 1980 (allowing free trade unions, but then revoked with
the military coup of 13th December 1981), and the Round Table agreement of the 4th
April 1989, re-legalising free trade unions and allowing the first free elections in
a communist country since 1948. While they also covered social and economic issues,
both agreements are famous for their historical impact, and were of a primarily
political nature, the 1989 agreement being comparable to the Moncloa pact in Spain.
In fact, one of the most influential participants in the Round Table negotiations,
the dissident Adam Michnik (1985), explicitly invoked a ‘Spanish path’ for Poland.
During the Round Table negotiations, Solidarity (then still called ‘the social side’)
demanded parliamentary democracy, but also the strengthening of company
self-management through works councils and egalitarian income policies, even if
combined with market reforms, and on these issues part of the government’s side
had no objections.
The experiences of the 1980s have had major political and cultural consequences,
most notably on compromises between old and new elites, but also on the rhetorical
importance of union-government negotiations on political levels. Such rhetorical
dimensions are ambivalent. On one side, it led trade unions to expect – more than
elsewhere in CEE – to be privileged negotiating partners of ruling governments.
But it also involved a generalised negative popular perception, as a large part of the
population grew dissatisfied with the Round Table agreements, and as parts of the
new economic and political elites wanted to mark a clear break from the past: in
Poland, social negotiations, were associated with the final moments of the ‘old’ rather
than with the ‘new’ system.
The 1980s also marked the future social landscape by establishing union
pluralism along political lines. While the ‘old’, Soviet-style trade unions (CRZZ)
dissolved after 1980 under the Solidarity wave, in 1982 reformed, more autonomous
communist trade unions were created (OPZZ: All-Polish Trade Union Entente) with
the aim of preventing the re-emergence of an independent workers’ movement. The
relationship between the OPZZ and the underground, but still influential, Solidarity
was obviously hostile: while one side was rewarded for its loyalty, the other was
violently repressed. In 1988, the very beginning of new negotiations between the
regime and the opposition was marked by a historic televised debate between the
OPZZ leader, Alfred Miodowicz, and Solidarity leader (and hitherto taboo figure in
the media), Lech Wałęsa. Contrary to the regime’s plans and expectations, the debate
was won heads-down by the inexperienced Wałęsa, accelerating the pace of change,
but also established the perception that the OPZZ and Solidarity sat on opposite sides
(as also happened during the Round Table negotiations a few months later).
2. From Shock Therapy to the Tripartite Commission
The unplanned and unexpected acceleration of political changes in Poland, and then
in the whole of Eastern Europe, during the summer of 1989 led to major changes in
the conception of social dialogue. Most notably, at the same time as Solidarity took
over political responsibility for ruling the country, the influence of the trade union
as such was immediately demoted: as Lech Wałęsa himself famously declared, ‘we
will not catch up with Europe if we create a strong trade union’ (Ost 2005). The
role of the trade union was downgraded to that of a ‘protective umbrella’, while the
government introduced radical market reforms (the ‘shock therapy’) with very high
social costs. In fact, the transition recession in the first two years was worse than the
1929 recession in the US: in 1990–91 GDP fell by 18.3%, industrial production by 36%,
real wages by around 35%, and unemployment jumped from virtually zero to 12%
(Amsden et al. 1994.) The programmed changes included the abandonment of works
councils and egalitarian income policies. Such changes were tolerated not simply by
Solidarity, but also by the majority of workers, as confirmed by a series of surveys
(Gardawski 1996).
In the first period of transition, then, no need for social dialogue was perceived
for two reasons: firstly, priority was decisively given to the speed of reforms; secondly,
dialogue with the most active trade union was already possible within Solidarity, as
a combined political and social force. Nor was there much need for dialogue with
the OPZZ, which was both disliked by Solidarity and, at the time, still adapting to
the new reality and in search of its own identity and strategy. Poland was therefore
unique in the region, in not adopting the tripartite institutions recommended by
the ILO.
The situation changed with the increased social unrest which exploded in
1992–93, and proved impossible to resolve without a system of institutionalised
social negotiations. At the beginning of 1992, the right-wing government led by
Jan Olszewski, facing a conflict with the strongly-unionised miners, proposed new
regulations for conflict resolution, leading to the signature of a government-Solidarity
agreement on dispute resolution in the sectors facing restructuring, which established
committees and rules for sector-level social dialogue. The OPZZ did not sign that
agreement: opinions diverge on whether this was because of its own unwillingness,
or the government’s.
The rapid spread of strikes to all sectors of the economy during the summer 1992
forced the government (now led by liberal Hanna Suchocka) to move to multi-sector
social dialogue. A large number of these strikes were linked to privatisation, whether
opposing or supporting it. The government appealed to the trade unions and the
then-emerging employers’ associations to negotiate new rules regarding privatisation.
The invitation was accepted by Solidarity, the OPZZ and nine other smaller trade
unions (although the radical Solidarity 80 and Kontra later withdrew from the
negotiations), as well as by the Polish Employers Federation (KPP), dominated by
state-owned managers, but not by the more aggressively pro-capitalist Business
Centre Club (BCC). Given the enduring divide between Solidarity and the OPZZ,
negotiations took place separately with the OPZZ on one side, and with all other
unions on the other. The long negotiations started in July 1992 and were concluded
in February 1993 with the signature of the ‘Pact on the Transformation of State
Enterprise’. This was a bilateral pact, as KPP occupied the same side as the government.
The pact was of a distributive rather than regulatory nature, as its main object was
the ‘price’ of privatisation in the form of the distribution of complimentary shares
to employees, but also included new regulations on collective agreements, employee
protection in the event of unpaid wages, company social funds and health and safety.
The ‘Pact on Enterprise’ was supported by the then Minister of Labour Jacek
Kuroń, a popular former dissident and promoter of corporatist policy. However,
rather than marking the beginning of a social dialogue era for Poland, it remained
its highest, and never-repeated achievement.
An important institutional change occurred the following year, already under
a new government led by the post-communist Alliance of the Democratic Left (SLD).
Under pressure from a strike in the energy sector, on the 1st of March 1994, the
government instituted, by decree, the Tripartite Commission on Socio-Economic
Issues, inviting as members the same organisations that had signed the Pact on State
Enterprise: nine trade unions and the KPP, and chaired by the Deputy Minister of
Labour (since 1996, by the minister.) The Tripartite Commission resembles analogous
institutions already created in Central European countries, but rather than through
external institutional pressure (notably, exerted by the ILO and EEC), it was created in
response to internal strikes, and therefore does not deserve to be labelled an imitation.
The most important competence of the Tripartite Commission was to agree yearly
wage increases, which would be binding for the state sector and non-binding for the
private one. Subsequent research proved that the private sector actually paid little
or no attention to such recommendations (Meardi 2006). Decisions had to be taken
unanimously, and this proved to hamper any important decision-making for the
rest of the 1990s: only in 1996 did the Commission manage to reach an agreement on
wage increases, while in other years the government was left with the responsibility
of taking unilateral decisions. The government therefore retained the dominant
position within the Tripartite Commission, arguably hampering the development of
autonomous bilateral social dialogue.
3. Social Dialogue in the Period of EU

Negotiations (1993–2002)
In December 1993, the Copenhagen summit officially started the EU enlargement

process, an issue which was to dominate Poland’s foreign and economic policy for
the following decade. While social dialogue is not a formal requirement of the ‘acquis
communautaire’ and therefore not a condition for EU accession, the EU did promote
social dialogue as a form of ‘soft acquis communautaire’ (e.g. Employment and Social
Affairs DG, 2001), which would have helped the applicant countries to harmonise
their policies and economy with Western Europe and to avoid social protest – similar
to what European social dialogue had been meant to do under Jacques Delors in
preparation for the European Single Market.
A strong commitment to social dialogue on the part of Polish governments
could only be detected, however, in 1996, through the actions of Minister Andrzej
Bączkowski. Bączkowski was in a unique – and indeed never repeated – position for
this task: a young and modern politician, he came from Solidarity but was a minister
in a post-communist government. This allowed him to be a respected negotiating
partner of the employers, Solidarity and the OPZZ at the same time. This is still
remembered as something exceptional, and retrospectively even hard to believe,
during an exceptional period: ‘The feeling was that he was a man on a mission, that
he really wanted a compromise, that he was not cheating… I believed, that he was
honest’ (JG’s interview with a Solidarity representative on the Tripartite Commission,
2004). In 1996, the agenda of the Commission was always full of first-order issues,
which raised the Commission’s profi le and provided an intensive social dialogue
exercise. But Bączkowski died suddenly in February 1997, before the Commission
could complete any major achievements on labour issues.
As the pace of the Commission’s work slowed down, its limits became more
apparent. In particular, the political divide between the unions and the weak
organisation of employers’ associations proved to be decisive obstacles.
The role of union politicisation was very clear. In summer 1997, Solidarity (which
had been the ‘protective umbrella’ of anti-communist governments in 1989–1993) was
assuming the leading role among the right-wing opposition, and it raised unrealistic
wage demands. When the government rejected these, Solidarity abandoned the
Tripartite Commission, thereby preventing it from meeting in plenary sessions. After
Solidarity’s election victory in September 1997, the roles were promptly reversed. The
OPZZ assumed the opposition role and abandoned the Commission in 1998, after the
government refused to negotiate its welfare state reforms, and published a ‘Black Book
of Dialogue’ in protest. On the other side, Solidarity – once again after 1989–1990 –
supported market-oriented reforms, and once again it paid a high price in terms of
popularity: in 1998, for the first time since 1989, opinion polls showed that the OPZZ
was more popular than Solidarity, although this would later change again.
Throughout the period up to 2001, Solidarity and the OPZZ were an integral
part of the two opposing political sides, to the point that up to one fift h of all MPs
were at the same time trade-union officers. Despite the freezing of central-level
social dialogue within the Tripartite Commission, trade unions did manage to exert
a certain influence on EU accession negotiations, and especially on the immediate
introduction of most EU social regulations, although they failed in their demand
for immediate freedom of employment across the EU (Meardi 2002), and social
dialogue somehow continued at the lower level of specialised committees within the
Commission.
In order to overcome the increasingly apparent limits of the Commission, a law
was passed in 2001 to institutionalise it and to reform the criteria of representativeness,
overcoming in particular the criterion of unanimity. The introduction of
representativeness criteria, in the wake of protracted controversy, (300,000 members
or employees in member companies) opened the doors to two new actors: a second
employers’ association, the Polish Confederation of Private Employers (PKPP),
which had been created in the mid-1990s as a reaction against the state-ownership
dominance of KPP, and a third trade union, the Trade Union Forum (FZZ), created
by seven smaller trade unions, mostly splitting away from the OPZZ and representing
the public sector. Later on, the BCC also joined the Commission. The new law also
created regional-level social dialogue commissions.
To summarise the experience of the period 1993–2001, the Tripartite Commission
cannot be dismissed entirely as an irrelevant façade, as it did have a high political
profi le and all sides participated at the highest level. The problem was possibly
the opposite one: an exaggerated political profi le leading to the dominance of
party-political agendas over the development of socio-economic social dialogue.
This made the parties, and especially the trade unions, prefer competition for the full
control of political power over compromise and sharing economic power. For these
reasons, proposals coming from one side were often not even taken into consideration,
as this would have involved political costs. For instance, when the OPZZ issued
a proposal on family policies in 1998, Solidarity responded with an alternative
proposal – and none of them was ever discussed: ‘why should we discuss their
proposal? We’d just legitimate them, and they would not thank us’ (JG’s interview
with an OPZZ representative, 2004).
At the end of 2002, the European Council agreed to the enlargement of the EU, to
include Poland and another nine countries in 2004. By then, not only the institutional
and international context had changed – the political one was new too.
4. Hausner’s ‘Window of Opportunity’

for a Social Pact (2002–2005)
After the introduction of the new law on the Tripartite Commission, aimed at
making it more representative and more effective, the overall Polish context changed
in a number of ways, which in theory should have laid down the preconditions for
stronger social dialogue.
Politically, a new left-wing government was elected in the autumn of 2001, and the
political scene was redrawn with a drastic reduction in direct trade-union influence,
paving the way for a depoliticisation of the same unions. The OPZZ was no longer
an integral component of the post-communist SLD, and Solidarity, after failing to
reach the 5% threshold, remained outside parliament and decided to withdraw from
direct politics. A new, more pragmatic general secretary, Janusz Śniadek, replaced
the strongly political Marian Krzaklewski. The change at the top reflected deep
changes at the grassroots: for the first time, opinion polls showed that a majority of
Solidarity members had voted for the post-communists in the elections: for the first
time, it seemed that the political divide inherited from the 1980s could be overcome.
In addition, the new labour minister and chair of the Tripartite Commission, Jerzy
Hausner, was an economist ideologically sympathetic to corporatism, and he shared
his professional background with the leader of the PKPP, Henryka Bochniarz.
Internationally, EU negotiations were coming to an end and the Copenhagen
summit of December 2002 would decide on the accession of Poland from 2004.
But rather than the end of the EU road, this meant Poland moving to the next step:
monetary convergence in order to subsequently join EMU – as no opt-out from the

common currency was allowed. Poland found itself in a striking similar situation
to that of Western European countries such as Italy, Belgium and Spain in the early
1990s. Inflation, at around 4%, was slightly higher than the Maastricht criteria, and was
driven by wage inflation, as wages, having been severely depressed in the 1990s, were
now growing faster than prices (although slower than productivity). The public deficit
was even more of a concern, at over 4%, with a large share of social transfers accounting
for this, and it would become the main economic concern of the SLD-led government,
causing much unpopularity. Indeed, all governments of the new Central European
member states of the EU, when trying to introduce unilateral measures to meet the
Maastricht criteria, faced electoral defeat (Poland, Czech Republic, Slovakia) or street
unrest and dramatic falls in their popularity (Hungary). These concerns would have
recommended social pacts as a socially-sustainable way to meet the Maastricht criteria,
based on the Italian example of the 1990s – and this was the actual recommendation
frequently made by EU bodies and western counterparts (Meardi 2006).
Economically, after years of fast growth, Poland was facing a downturn, and
unemployment, approaching 20%, had become a major problem. In Western Europe,
especially since the launch of the European Employment Strategy in 1997, employment
had been seen as an area in which social dialogue would be particularly promising
(Léonard 2005).
Soon, another important factor would have suggested the suitability of social
pacts. After a landslide election victory in 2001, in 2002 the SLD-led government
was shaken by a series of alleged corruption scandals and a dramatic fall in public
confidence, from which it never recovered. In 2004, Prime Minister Leszek Miller had
to resign and was replaced by the technocrat economist Marek Belka, the SLD had
a crushing defeat in the European elections, and the government lost the support of
the junior coalition party, the peasant party PSL (Polish Popular Party) and thereby
its majority in parliament: until the next elections in 2005, it had to rely on ad hoc
agreements with the opposition parties. In the West, it has already been observed
how government’s political weakness increases the attractiveness of social pacts as
‘a coalition of the weak’ (Baccaro and Lim 2007), an argument also proposed on
Central Eastern Europe (Avdagic 2006). The combination of corruption scandals,
political fragmentation, and technocratic government resembled in particular the
Italian government led by Azeglio Ciampi in 1993 – the protagonist of the frequently
acclaimed concertazione.
Altogether, it seemed that Poland had a ‘window of opportunity’ for social
pacts and that Hausner could have been the Polish Ciampi. Most institutional and
political obstacles had been overcome, and the agenda, in terms of shared objectives
(EMU convergence, employment), was most promising. Hausner, who soon became
Minister of the Economy as well as Minister of Labour, invested much of his authority
in achieving social pacts (Hausner 2007), seeing social dialogue as a policy alternative
to those of previous governments, but especially of the die-hard monetarist Polish
National Bank, chaired by the author of the shock therapy, Leszek Balcerowicz. But
the results were mostly disappointing. Hausner also identified in social dialogue the
potential for bypassing even more difficult negotiations within the ruling coalition,
between the SLD and PSL. In such a situation, it was hoped that the Tripartite
Commission could assume the role of a ‘quasi-government’.
Hausner’s first initiative involved strengthening multi-sector social dialogue,
bringing the sectoral committees under control. These had acquired increasing
autonomy but, according to traditional corporatist policy and to the views of
Vice-Minister Długosz (2005), such meso-corporatism was a threat to macroeconomic
governance because of the high risk of externalities (see for instance Calmfors and
Driffill 1988.) However, this initiative already encountered resistance from organised
interests and state administration bodies, and the only objective that was met was
the harmonisation of sectoral social dialogue committee regulations, not their
co-ordination.
Hausner’s quest for a social pact started in October 2002, when he prepared
a document on the principles of social dialogue, directly inspired by Western
European experiences of the 1990s, which was approved by the cabinet. The document
hoped to give social dialogue a systematic role.
The next and most important initiative was the proposal, at the beginning of
2003, of a social pact known as the ‘Pact for Work and Development’. The pact had
to be regulatory, and not distributive. A distributive social pact on wages was seen
by Hausner as barely achievable because of the enduring disequilibrium among
economic sectors in terms of the organisation of interests: the interests of the
organised sectors would always prevail over macroeconomic interests.
The proposed social pact covered a number of issues and especially reform of the
public finances, employment, healthcare reform and labour law. The attractiveness
for employers had to be the increase in flexibility and control over the public deficit,
while the trade unions were offered a less clear procedural influence over the shape
of reforms, which would have replaced their diminished political-parliamentary
power. At a special meeting in Sobieszow in May, the Tripartite Commission
unilaterally signed an agreement on the beginning of negotiations over the social
pact. However, the very next day, the National Commission of Solidarity, voted
by a majority to oust its president who had signed the agreement, and decided to
withdraw from the negotiations. The decision was taken on two grounds. Firstly, in
line with their traditional political standpoint, part of Solidarity feared legitimising
and even strengthening a post-communist government, which it opposed as a matter
of principle. But also, the more unionist wing of the union did not see what material
benefits a social pact would entail for employees. Solidarity would later return to the
table to discuss what was downgraded from a ‘social pact’ to a ‘social agreement’, but
after eight months of intensive negotiations, Hausner had to throw in the towel and
abandon his proposal. The PKPP proposed to sign the pact even without Solidarity’s
signature, but this was eventually deemed pointless by the government: a pact without
the signature of the most active trade union would not have protected the new policies
from social resistance.
Among the causes of Hausner’s failure, the enduring lack of trust between
Solidarity and the post-communist party is the most visible. Despite formal political
change – Solidarity having withdrawn from direct political participation in 2001, and
the SLD having enthusiastically embraced NATO and the EU, and co-opted several
former key Solidarity figures – such mistrust seems to have a deeper cultural element
which is unlikely to change until the generations who fought each other in the 1980s
have left the scene. But one can also see Solidarity’s opposition in a different light:
not simply as a perpetuation of its ideological positions, but as a learning process in
terms of its union-political role. The new Solidarity leaders were all too aware of the
heavy costs they paid, in terms of social support, for their support for the market
reforms of 1997–2001 under the Solidarity-led government. Social acceptance for such
concessions having been exhausted, Solidarity had to turn to a more intransigent role
in the defence of workers’ interests.
An additional explanation lies in the nature of the Pact for Work and Development
itself, which would mostly have penalised the most organised sectors – heavy industry
and state sector. Given the low level of the encompassing nature of Polish trade unions,
in which the new private sector is almost nonexistent, such proposals were bound
to run into resistance. Even the OPZZ eventually refused to subscribe to most of the
government’s labour law proposals, which were then implemented by the government
with the support of the employers but against the opposition of all trade unions. The
same occurred regarding the controversial issue of collective bargaining, with the
introduction of ‘hardship clauses’ for the suspension of collective agreements.
Social dialogue under Hausner was not entirely fruitless. More specific agreements
were signed on a number of issues, from pay rise indicators (non-binding), to social
security, entrepreneurship and pensions. All of these agreements, despite being more
numerous than at any time since 1989, fell well short of a comprehensive social pact,
both in terms of scope and stability. The poor institutionalisation of such deals could
be seen in the agreement reached in 2002 – after five years of failed negotiations
– on the criteria for determining the minimum wage. Even before the agreement
passed into law, the OPZZ protested against it (bringing some SLD MPs across to its
positions) and embarked on new bilateral negotiations with the government, which
were concluded by a new protocol and concessions to the unions, guaranteeing that
the minimum wage would not decline in relation to the average salary. On many
issues, it proved impossible to reach an agreement: proposals on tax credits for
low-wage employees and on the reform of the national Social Fund for Guaranteed
Benefits (which had been created by the social pact of 1993) were rejected by the
trade unions, while those on social security contributions for the self-employed were
blocked by the employers. On labour law, Solidarity even refused to negotiate.
The intensive contacts under Hausner did open the way to the development
of some bilateral social dialogue between employers and the trade unions, and
especially between PKPP and OPZZ, which in December 2003 – with strong public
opposition from Solidarity – signed a bilateral understanding on a number of issues,
such as temporary employment and conflict resolution. There was also a bilateral
dialogue in autumn 2004, when the social partners reacted to Hausner’s proposal
on the implementation of the Information and Consultation Directive, which would
have introduced works councils. Both employers and trade unions felt threatened,
whether by a loophole for employee co-determination, or by competition from new
institutions, and therefore agreed an alternative proposal, which minimised the
role of works councils (the implementation law would not be passed until 2006, by
the next right-wing government, without tripartite agreement, though in line with
Solidarity’s proposals.) Paradoxically, the main social dialogue success of Hausner
had been achieved against him rather than by him.
Hausner reacted to the frustration of the failed social pact by shift ing the
debate to a different area. Having established the impracticability of social dialogue
(Hausner 2007), he promoted a more generic ‘civic dialogue’ involving a number of
non-governmental organisations, as well as the traditional corporatist ones. Such
a choice, as with the enlargement of concertation to civic society in Italy in 1998,
watered down the social dialogue and made it less relevant, rather than relaunching
it in different ways. Hausner also promoted regional social dialogue, seeing the local
level as less ideological than the national one. Even at this level, however, the results
were fairly limited.
5. In the EU: a New Political and Economic

Outlook, But no New Social Pact (2005–2008)
Accession to the EU has generally failed to promote social dialogue in the new
member states (Meardi 2007a), with the partial exception of Slovakia, where the
left-nationalist government elected in 2006 promoted dialogue with the trade
unions, achieved a social pact at the beginning of 2008 and managed to join EMU
in 2009. The EU agenda has however at least promoted the institutional capacities of
social partners through their inclusion in EU corporatist policies and institutions.
The relevance of the agendas coming from the EU is clearly discernible within the
Tripartite Commission, which from 2004 onwards, started debating all EU social
policy initiatives.
Joining the EU was accompanied by an economic boom, but also by a political
counter-reaction. The presidential and parliamentary elections of 2005 were won by
a traditionalist party, Law and Justice (PiS), led by the twin brothers Kaczyński, which
formed a coalition with the extreme-right League of Polish Families (LPR) and the
anti-EU peasant party Self-defence. This explicitly eurosceptic government had the
external support of Solidarity and fulfilled some of the unions’ demands through
its programme of a ‘solidarity-based Poland’, particularly as regards working hours
and the minimum wage. However, the Kaczyńskis’ conception of social dialogue
prioritised Solidarity over the OPZZ. The new government’s anticommunism
included a programme of ‘cleansing’ the state administration and Polish society,
which expanded to encompass post-communist trade unions. The teachers’ trade
union ZNP (the largest among OPZZ federations, and the most representative union
in the education sector) in particular was the victim of ostracism by the new Minister
of Education – and leader of the LPR – Roman Giertych. The unions’ political divide
was therefore reinstated and the OPZZ once again turned to principled opposition,
despite agreeing to some of the new government’s most pro-labour initiatives. The
Tripartite Commission was sidelined, as the government preferred direct autonomous
negotiations with Solidarity only. The government proposed a social pact under
the title ‘Economy – Work – Family – Dialogue’, once again inspired by Western
European solutions (the government even created a website on social pacts, www.
umowaspoleczna.gov.pl, devoting a great deal of space to stories from Western
Europe). Solidarity itself, however, realised the risk of such close negotiations with
the government and refused to sign the pact outside the Tripartite Commission, and
therefore without the OPZZ, showing that its trade-union identity prevailed over the
political one. This also proved that social dialogue within the Tripartite Commission
had reached a sufficient level of institutionalisation to ensure that it could not be
easily sidelined. The negotiations within the Tripartite Commission lasted, without
making any real progress, from March 2006 until the summer of 2007 when the
OPZZ and the employers withdrew because of the political crisis overtaking the
PiS–LPR–Self-defence coalition.
Early parliamentary elections were held in autumn 2007 and resulted in
a landslide victory for the liberal opposition Civic Platform (PO), which formed
a coalition government with the PSL. Although PO had had an extreme neoliberal
programme on socio-economic issues, it moderated this in the electoral campaign,
and rediscovered its roots in the Solidarity movement. Subsequently, PO watered
the neoliberal programme down, in order to obtain the support of the more
socially-oriented PSL. Most visibly, the initial flagship proposal of a flat-rate income
tax was abandoned, as well as an early proposed law on industrial relations that would
have allowed derecognition of trade unions in the workplace. The new government,
led by Donald Tusk, proposed a new ‘social agreement’, authored by the Deputy Prime
Minister and PSL leader Waldemar Pawlak. The project covered a number of core
issues: wage policy, pensions, trade unions law and employment. Negotiations started
within the Tripartite Commission in April 2008.
For the first time since 1989, the government is not directly backed by any trade
union and is not clearly positioned along the communist-anticommunist divide
(the PSL is a former satellite of the communist party). Therefore, the OPZZ and
Solidarity no longer occupy opposite positions with regard to it. Nonetheless, the
negotiations on the new social pact soon came to a halt in the autumn, due to union
opposition to one of its core elements: the reform of early retirement schemes. Here,
the blame clearly cannot be placed on union political partisanships: Solidarity and
the OPZZ acted together and co-operated in collecting 70,000 signatures against the
government proposal, and they managed to obtain some government concessions
over the initial plans. Union opposition was purely union-based: against unilateral
concessions in a pact without any clear trade-offs. The failure of the pact lies in the
government feeling stronger than its predecessors and therefore not needing to make
any major concessions.
At the same time, a major contextual change occurred in the labour market
and in the economic outlook. Following EU accession, economic growth and
mass emigration caused unemployment to fall from 20 to 9.5% in five years. As
a consequence, labour shortages became apparent and wages, previously depressed
by unemployment, started growing in an uncoordinated way, creating a direct threat

to employers’ planning and competitiveness. Moreover, the re-appreciation of the
Polish zloty is starting to harm Poland’s foreign competitiveness. While the OPZZ
launched a new campaign for increased wages, demanding compensation for the
large productivity increases in the last few years (43% in 2000–2005, compared to 7%
for real wages), the employers, for the first time, are now considering the usefulness
of some form of co-ordinated income policy.
Economically, although Poland was hit less hard than its Baltic neighbours
by the global financial crisis, growth prospects were suddenly downgraded at the
end of 2009, from around 6% to 2–3%, the Polish zloty lost some of its value, and
unemployment started increasing again. Government austerity plans to deal with
lower tax revenues and currency devaluation faced immediate union protests. While
making the social climate tense in the immediate future, in the longer term the
feeling of crisis might lead to a widespread consensus on the crisis and the need for
concerted action, as in Italy or the Netherlands in the past. Such a converging trend
is visible in the broadening support for adopting the euro, and has also occurred at
sector level. The same export sectors that had benefited from EU accession were hit,
leading to the novelty of the automotive-sector Solidarność and the OPZZ coming
together with the employers’ Automotive Industry Association (the same employers’
association that until recently would not co-ordinate any relations with the trade
unions) to seek a government rescue plan in December 2008. However, this emerging
co-ordination may remain at sector level only (the PKPP refused to support the
automotive employers in their demands), confirming the limited extent to which
the Polish social partners, and thus their corporatist attempts, may be regarded as
encompassing.
Conclusion: Assessment, Unintended

Effects and Prospects
Post-communist societies, including Poland, despite this country having developed

a unique ‘underground’ society in the 1980s, are characterised by a very low level of
social association, which makes social dialogue particularly difficult. On one side,
even though trade unions remain the largest associations in Poland, most of their
members come from just a few sectors, which are either state-owned or recently
privatised. On the other side, employers have been slow at organising, and their
associations have very little power over their members.
It is therefore no surprise that the Polish story is mostly a story of failures.
Nevertheless, the work of the Tripartite Commission, despite the shortage of actual
social agreements, over a period of eighteen years has had some effects, and the
lack of social pacts can no longer be taken for granted. In particular, the large
number of committees and meetings (involving top national leaders, but also at
expert and regional levels) resulted in the establishment of networks of relations
among the social partners and in a process of social learning. This is confirmed
by one of Solidarity’s representatives: ‘The important thing is that we have started
to communicate. Previously, we only knew Mrs Bochniarz from TV, which only
provoked us to anger and conflict…, and with all these contacts, it turned out that
they are intelligent people and there are areas on which, despite the differences,
we can meet’ (interview with JG, 2004). As Regini (2003) has argued, sometimes
even failed agreements (such as the German Alliance for Jobs in the 1990s) have
implications for social governance.
But while social dialogue in Poland in the 1990s faced a number of major political
and institutional obstacles, this paper has shown how most of these obstacles are
not necessarily insurmountable in the 2000s. Actually, Poland had a window of
opportunity for social pacts around the time of EU accession.
The chapter has argued that social pacts do not follow a simple functionalist logic:
in Poland, there was a ‘demand’ for social pacts as the country was embarking on
the monetary convergence path towards EMU, and was facing very similar problems
(wage inflation, public deficit, labour market reforms) to those of some Western
European countries such as Italy in the early 1990s. But this demand was not met.
There are therefore specific obstacles to the conclusion of social pacts, affecting
all three actors involved.
The most visible obstacle, trade union politicisation, while still enduring,
has been significantly weakened since 2001. It is no longer an automatic step for
trade unions to oppose hostile governments’ proposals and support friendly ones:
Solidarity signed some agreements with the left-wing government of 2001–2005,
and opposed some of the right-wing government’s proposals in 2005–2007, while
the OPZZ opposed some government proposals in 2001–2005; the two unions acted
together after the 2007 elections. As Italy shows (Meardi 2006), union political
divides are not insurmountable obstacles for concertation, and as Spain shows, nor
is the abandonment of authoritarianism either.
The government side, which had shown only occasional interest in social dialogue in
the 1990s, committed itself to social pacts with Jerzy Hausner in the period 2002–2004,
when the ruling coalition was weakened by internal confl icts and corruption
scandals, and therefore needed external support. The amount of time devoted
to social negotiations in 2002–2004 by the top figures on all three sides, and the
relevance of the issues discussed, do not fit with the image of tripartism as a simple
‘façade’. After 2007, the new centrist government appears politically better-positioned
to negotiate with all sides, but also too strong in parliamentary terms to share much
of its decision-making power.
The employers’ disorganisation, which was understandable in the 1990s, when
private capital was still emerging as a social force, can no longer be taken for granted.
The PKPP, which was admitted into the Tripartite Commission in 2001, plays the
role of a modern employers’ confederation. The lack of structures for multi-employer
collective bargaining in the private sector is no longer a legacy of the past, as there
have been nearly two decades in which to build them, and the reform of the Tripartite
Commission in 2001 has been an important opportunity, with the effect of turning
employers’ associations into effective lobbying groups.
It seems therefore that an explanation of the Polish failures cannot be traced to
single factors concerning one actor only, but require a more thorough understanding
of the relationships between the actors involved. As Bohle and Greskovits (2006) have
argued, there is a new form of capitalism emerging in Central Europe which has its
own dynamics and power relations, distinct from the previous system. This form
of capitalism is characterised by, among other things, an unequal balance of power
between capital (and the shortage thereof) and labour (and the oversupply thereof):
the resulting power relations bring Poland closer to a USA-style deregulation than to
a Swedish-style social compromise (Wright 2000).
The influence of foreign capital – dominant in the PKPP – in particular is
a new factor. It then appears that the lack of co-ordinated bargaining structures is
now to a large extent the outcome of specific strategies pursued by the employers,
characterised by labour market power and by heterogeneity. In one of the most
influential sectors, metalworking, the employers had actually created a federation
in the late 1990s. They took the decision to dismantle it when faced with a request
for a sector-level agreement from the trade unions: so it is not that they could not
negotiate, but that they did not want to. In a situation of very high unemployment
and patchy unionisation, single-employer negotiations were the best strategy for
exerting employer power. To some extent, government policies have also strengthened
this active refusal to engage in co-ordinated pay setting. Despite his intentions of
favouring social dialogue, Hausner did not introduce wages as an important topic
for negotiations in 2001–2005. Moreover, his proposed weakening of sector-level
committees within the Tripartite Commission, which were defended by the trade
unions, although justifiable through the aim of avoiding meso-corporatism at sector
level, was an additional action against the development of multi-employer bargaining.
As a result, the step of combining the issues of incomes and social security, which
was the characteristic of social pacts in Western Europe, was prevented in Poland.
Once the social dialogue was narrowed down to ‘regulatory’ issues only, and the
distributional issues removed, the possibility of benefits for the trade unions was
also narrowed down. Their opposition is therefore largely natural, and not only due
to ideological positions.
Power relations among actors include, in addition to those between government,
employers and trade unions, the Polish National Bank also. Th is strong and
independent institution, especially while chaired by Leszek Balcerowicz in 2000–
2007, adopted a strong monetarist line. By pursuing this tough policy, made even
tougher by high unemployment, trade union power was controlled, and there was
no need to negotiate a transition from an accommodating to a restrictive monetarist
monetary policy which, according to Hassel (2006) is one of the main reasons for the
emergence of social pacts.
This interpretation, focussed on the power relations between all actors involved, is
confirmed by a longer historical perspective. Firstly, a major social pact had actually
been concluded in Poland, with the ‘Pact on State Enterprise’ of 1993. But that was at
a time of different power relations among the actors. Not only was the government
weak (an unstable coalition of seven parties), but there had been a wave of major
strikes across the economy. After 1993, strikes in Poland continued to decline until
they reached a level of virtually zero in the early 2000s, largely removing the need for
social concertation for government and employers.
However, the situation is still dynamic, as there are symptoms of trade union
revitalisation (Gardawski 2001, Ost 2006, Meardi 2007b). As labour market conditions
are changing dramatically, wages have started rising and strikes are making
a comeback, employers may now appreciate the advantages of social dialogue and
co-ordination of pay rises. Moreover, for the first time since 1989, the Tusk government
elected in 2007 is not clearly positioned on the Solidarity vs. post-communist axis:
the trade unions are therefore free to focus on their ‘union’ job. The effects of the
subsequent global financial crisis are broadening the number of issues on the agenda.
Social dialogue may be entering its ‘adult’ phase.
Table. List of government coalitions and national-level social agreement

Year Actors Issues Nature
1989–1993: post-Solidarity governments (Solidarity + nationalists and/or liberals)
1992 Government, Solidarity Strike resolution Bipartite, OPZZ excluded
Right-wing government, ‘Pact on State Enterprise’:
Tripartite, but employers still
1993 KPP, OPZZ, Solidarity, other privatisation, social security,
dependent on the government
unions H&S, collective bargaining
1993–1997: post-communist governments (social-democrats + peasants’ party)
Tripartite but private
Tripartite Commission
1996 Wages for 2007 employers under-represented;
(left-wing government)
binding only for state sector
1997–2001: centre-right governments (Solidarity + liberals)
2001–2005: post-communist governments (social-democrats + peasants’ party)
2002 Social security, H&S Tripartite
2002 Wages for 2003 Public sector only
Tripartite Commission Non-conclusive: additional
2002 Minimum wage
(left-wing government) negotiations with OPZZ
2003 Wages for 2004 Private sector, non-binding
Labour law, conflict
2003 PKPP, OPZZ Declarative only
resolution
Tripartite Commission ‘Pact for Work and
2003 Failed agreement
(left-wing government) Development’
2005–2007: right-wing populist governments
Tripartite Commission Pact ‘Economy – Work –
2006 Failed agreement
(right-wing government) Family – Dialogue’
2007: centre government (liberals + peasants’ party)
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WFES 1:2 2010
Illusory Corporatism in Eastern

Europe: Neoliberal Tripartism
and Postcommunist Class Identities1
David Ost*
Abstract
The plethora of tripartite bodies in postcommunist countries seems to suggest the

emergence of an East European corporatism. Analysis of arrangements in Bulgaria,
Czech Republic, Hungary, Slovakia, and Poland indicates instead the prevalence of
illusory corporatism. Token negotiations, non-binding agreements, and exclusion of
the private sector demonstrate that tripartite procedures are deployed to introduce
neoliberal, not social democratic, outcomes. A path-dependent argument stressing
labour’s weak class identity best explains these outcomes. East European labour,
unlike historic western counterparts, is marked by a weak sense of class interests,
disinclination to organize the private sector, and declining support from the workforce,
making it unable to emerge as a strong force. It is not labour but the new elites that
seek tripartism, hoping thereby to share burdens, conform to European norms, and
demonstrate responsiveness to society. Formal tripartism also follows from the legacy of
state socialism, giving symbolic voice to the formerly included now headed for exclusion.
In the end, tripartism helps secure labour’s acceptance of its own marginalization.
* Hobart and William Smith Colleges

1 The paper originally appeared, in: Politics and Society 28:4, December 2000: 503–530. Reprinted
upon permission by Sage Publications, Inc.

92 David Ost
If mimicry is the greatest form of flattery, East European countries would seem to
be quite enamoured of West European-style corporatism.2 In the years after 1989,
all postcommunist countries in Eastern Europe invested heavily in tripartism. In
Hungary, a tripartite commission was actually introduced in 1988, then reconstituted
for the new conditions two years later. In Bulgaria, Czech Republic, and Slovakia,
tripartite bodies began in 1990. The Russian Tripartite Commission held its first
meeting in November 1991, while the Polish Tripartite Commission was convened
in early 1994. Everywhere, tripartism has become a regular feature of the social
landscape. As a symbol of the neocorporatist organization of interests, tripartism is
unmatched. Indeed, the prevalence of this form of institution has led one observer to
characterize the changes in Eastern Europe as ‘transformative corporatism’ (Iankova
1998; Seleny 1999; Tatur 1994)3.
What I want to argue, however, is that instead of transformative corporatism,
postcommunist Eastern Europe is better described as in the midst of illusory
corporatism. While the facade of tripartism is present throughout the region, with
duly constituted commissions holding regular meetings bringing together formal
representatives of the state, trade unions, and employers, this is in no position to bring
about the politically stabilizing and economically inclusionary class compromise that
was West European neocorporatism’s great achievement. In Eastern Europe, on the
contrary, neocorporatist forms are being used to generate neoliberal outcomes.
Neocorporatism has been important as a way of consolidating liberal democracy.
As a mode of organizing interests that serves to moderate class antagonisms in
capitalist societies by coordinating and ameliorating the conflicting interests of
labour and capital, it taught the two dominant classes of industrial society to tolerate
each other’s existence, demonstrating to them that working together (compromise)
was in each one’s selfish interest. Moderating class antagonisms within a liberal
democratic polity has been the hallmark of social democracy ever since Bernstein,
Kautsky, and the Mensheviks,4 and so it is no surprise that neocorporatism in western
2I’d like to thank David Dornisch, Carola Frege, Bela Greskovits, Mieke Meurs, and Erik Olin
Wright for comments on earlier drafts, the ACLS Joint Committee on Eastern Europe and the National
Council for Eurasian and East European Research (NCEEER) for generous research support, and
the European Science Foundation and Central European University for sponsoring the Budapest
conference at which the first version was presented.
3
The Polish press frequently speaks of Poland as the corporatist country par excellence. (For
example Janicki, M. (1998),’Zwiazkokracja’, in: Polityka, December 12.
4The latter two are critically important to the development of social democracy because each
of them at first strongly opposed Bernstein’s original reformist heresy only to discover that the logic
Illusory Corporatism in Eastern Europe: Neoliberal Tripartism and Postcommunist… 93
Europe has always been closely linked to social democratic politics. Social democratic
parties have been its greatest proponents, and the chances of implementation
dramatically increased (at least until recently) when social democratic parties
won elections. Neocorporatist agreements meet social democracy’s ideological
predilections for a pro-labour arrangement in a non-authoritarian political system.
By institutionalizing labour input into policy-making, neocorporatism satisfies
socialist demands to counteract the inherent privileges of capital over labour, and its
success helps generate deep support for political democracy. Such support grows as
a function of inclusiveness, and neocorporatism has expanded inclusion by extending
to the economic realm the inclusiveness that earlier democratizing innovations
(such as the franchise) had limited to the political (Schmitter 1983). To claim that
post-communist Europe has embraced neocorporatist models, as those who point
to the prevalence of tripartism do, is to claim that it is moving toward this economic
and political inclusiveness that produced, for so long, such growth and stability in
the West. And that is precisely the argument that cannot be sustained.
In what follows, I discuss the tacit assumptions in the western literature on
corporatism, the specifics of tripartite arrangements in five countries (Hungary, the
Czech Republic, Slovakia, Bulgaria and Poland), and ask why formal inclusion in east
and west leads to such different outcomes. I choose these countries because they cover
a gamut of experiences in the region, including tripartism with centralized unions
and without, promoted by socialists or liberals, started early or late, with more or less
privatization, in economies at different levels of growth. If we can show similarities
despite these differences, we can more persuasively claim the common socialist legacy
as a determining factor. I then look at various explanations for how this illusory
corporatism was able to take hold, and how it can be so different from tripartism in the
West, focusing on a path-dependent argument that looks to communist-era legacies
producing weak labour class identity, pro-capitalist predilections, and a consequent
undermining conception of self. Other factors such as global economic pressure,
unfavourable international political environment, and the general crisis of social
democracy certainly also contribute to the weakness of neocorporatist arrangements.
But weak class consciousness best helps explain labour’s acceptance of the bad deal.
I emphasize this point also because it has received the least attention, because it is
contrary to usual ways of looking at labour in postcommunism (which assume labour
militancy), and because it switches the focus from familiar structural explanations
of their activity, and their differences with the Bolsheviks, led to the same essential reformism that
Bernstein, Engels’ heir apparent, had proposed in the fi rst place.
94 David Ost
and reinjects the centrality of human agency into discussions of comparative political
economy.
Tripartism as a Spurious Symbol of Corporatism
Neocorporatism refers to much more than the existence of a commission where the
state can work with representatives of employees and employers. In its modern West
European usage, it refers to the social and political arrangement whereby labour
is integrated into the polity. The arrangement offers benefits to all sides: to labour,
it offers material gains and political dignity; to employers, manageable industrial
relations allowing business to plan long-term investments; to the state, social peace
in the sectors that are so vulnerable to massive disruption. Labour seems to be the
chief beneficiary. This is because neocorporatism is a political arrangement created
specifically for a capitalist system, which otherwise offers labour no guaranteed,
institutionalized input. Corporatist arrangements are a way of evening out the playing
field. As workers demand political inclusion, and capital is unwilling to provide it,
the state steps in with its tripartite commissions, entailing institutionalized access to
political decision-making in return for labour quiescence.
One can argue, of course, that capital needs social democratic arrangements too.
Swedish capital proved so responsive to social democratic pressure for labour inclusion
because it sought to avoid strikes, while Austrian and Swiss business saw corporatist
arrangements as ways to promote their own expansion5. But even if capital supported
these arrangements, it did so only because labour had already organized itself as
a class opponent determined to defend its own interests. Capital got aboard once it
became clear that labour’s interests would be met one way or another. That capital
ultimately supported labour inclusion means only that it accepted a fait accompli,
not that inclusion was a sham. This might have been unclear in the 1970s, during
the heyday of western neocorporatism, when capital’s assent to partial inclusion led
some socialists to believe that much more was achievable, and that corporatism was
thus class collaboration working to the disadvantage of labour (Panitch, 1977; Panitch
1979; for the contrary argument see: Dow, Clegg, Boreham 1984). In the context of the
early 21st-century global capitalism, marked by hegemonic neoliberalism’s assault on
5 On Swedish elite support for social democracy, see: Baldwin, 1990; on Austria and Switzerland,
see: Katzenstein 1984.
labour’s postwar gains, such a claim seems quite out of place. Neocorporatism and
neoliberalism seem to be opposite ends of the pole, opposing possibilities for labour
in capitalist society.
The argument that post-communist society is experiencing a neocorporatist
revival is based on the observable phenomenon that tripartite commissions arose
throughout the region almost immediately after the fall of communism. Does
the pervasiveness of tripartism really signify the presence of neocorporatism? If
neocorporatism is chiefly about procedures, then it would be hard to deny the claim.
And indeed, much of the literature does in fact focus on procedural issues, and on
tripartism in particular. Thus the German case has been, in Kathleen Thelen’s words,
so ‘baffling’ to many scholars. Since its ‘peak-level bargaining… was always a pale
imitation of tripartite negotiations’ elsewhere, scholars have tended to hold back the
neocorporatist label from Germany despite obvious similarities in outcomes with
‘acknowledged’ neocorporatist countries6.
As the German riddle demonstrates, a procedural definition of neocorporatism
is inadequate. The emphasis on procedures seems to be a product of the switch from
what Schmitter would later call ‘corporatism [1]’ to ‘corporatism [2]’ (Schmitter
1982: 263). The original emphasis of corporatist theory (‘corporatism [1])’ was on
the structure of interest intermediation. In that view, neocorporatism denotes the
existence of compulsory, non-competitive institutions of interest representation
granted representational monopolies in order to bargain centrally under the aegis
of the state. But such a definition of corporatism did not prevail for very long.
Too few countries that otherwise seemed to resemble neocorporatism, in terms
of liberal polities and the integration of labour, had compulsory and monopolistic
interest associations, while some that did have representational monopolies also had
authoritarian (late-fascist or late-communist) political structures, which in the eyes
of most theorists disqualified them from the neocorporatist camp. And so writers
began focusing on outcomes instead. Only one of them was explicitly theorized. That
is what came to be known as ‘concertation’, or ‘corporatism [2]’, which Schmitter
defined as a policy-making model in which societal interests are ‘incorporated
within the policy process as recognized, indispensable negotiators and are made
co-responsible… for the implementation of policy decisions’ (Ibidem).
It was this emphasis on concertation, or the turn to ‘corporatism [2]’, that turned
the focus to procedures. Instead of looking for monopolistic interest representation
6Thelen is speaking here of the assessments of scholars such as Harold Wilensky, David Cameron,
and Walter Korpi and Michael Shalev (Thelen 1991: 39, 43).
96 David Ost
organizations, researchers looked to the way concertation was achieved. In the search
for how ‘social partners’7 became integrated into the polity and co-responsible for
policy implementation, tripartite bodies appeared to be of central importance. Here
was where societal interests meet, as powerful autonomous actors if not quite as
equals, in order to work out the wage, workplace, and macrosocial policies necessary
to ensure social peace and economic growth. As Thelen’s comment indicates,
tripartism had become the classic emblem of concertation.
But not all tripartite bodies are the same. Similar institutions in different political
contexts do not necessarily play similar roles or have a similar significance. The same
outward form can mask very different contents. Just as elections can cover for an
undemocratic regime, or regulatory agencies can hide corporate control, so tripartite
commissions do not necessarily entail the labour strength that they seem to signify.
And so the existence of tripartite commissions tells us little about their real powers
and effects. As Stykow has noted, the ‘successful imitation of institutions that work
smoothly in some contexts depends on [conditions] that are hardly to be created by
‘political engineering’ in other national-historical contexts’ (Stykow 1996: 4). What
makes tripartite bodies inclusive, neocorporatist institutions are the degree to which
they facilitate concertation, or joint policy-making. As I will show below, however,
East Europe’s tripartites have offered only symbolic inclusion, and have systematically
rebuked any labour aspiration towards co-responsibility in policy formation. On the
contrary, governments have repeatedly sought to use tripartite bodies to rubber-stamp
and legitimate neoliberal policies decided elsewhere. Tripartite bodies are emblematic
of democratic neocorporatism when they lead to concertation. When they lead to
disempowerment, they are symbols only of illusory corporatism.
I noted before that only one of the two outcomes was actually theorized. For
there is another ‘outcome’, central to the literature on neocorporatism, that is
never theorized but is arguably even more central to its political success. This is the
material benefits accruing to labour. As noted above, although the literature stresses
procedures, it assumes outcomes – social democratic ones in particular, such as
increased prosperity for organized labour, restraint on the prerogatives of capital,
and state intervention favouring full employment. In other words, neocorporatism
only makes sense if it is understood not just as centralized wage-bargaining or
joint influence over policy-making, but as comprehensive welfare states providing
material benefits to workers. Most theorists, writing about countries where rising
labour standards of living were common enough to be taken for granted, did not
7 This term already assumes the reality of concertation.

recognize this as a key factor of effective neocorporatism. They certainly noted its
pervasiveness. Indeed, every discussion of corporatism assumes labour benefits.
Katzenstein distinguishes a ‘liberal’ from a ‘social democratic’ corporatism, but even
in the former labour obtains not only an institutionalized influence over public policy
but material results as measured by wage and consumption levels that would satisfy
the most radical social democrat (Katzenstein1984). Even the left-wing critiques that
denounce corporatist arrangements usually acknowledge that workers do better
with them than without, their objection being only that it is less than labour could
have under ‘real’ socialism (Teeple 1995; Wallerstein 1995). Indeed, had substantial
labour benefits and real influence on policy-formation not been part of the package,
there would never have been much to-do about corporatism in the first place. Social
scientists would not have debated neocorporatism so passionately if all that was at
stake was a mode of interest articulation. Neocorporatism mattered because social
scientists were trying to explain the phenomenal postwar rise of the working class. To
say that genuine neocorporatism entails social democratic outcomes is only a matter
of making explicit what other literature on the topic only assumes.
Tripartism is an indicator of genuine or effective neocorporatism only if it leads
to joint influence on policy-making and concrete benefits for labour. Otherwise it
signifies only illusory corporatism. This is what I argue is the case in Eastern Europe.
Instead of leading to concertation and concrete material benefits, East European
tripartism has legitimized the marginalization of labour and the decline of wages
and benefits. Far from enhancing labour’s class power, such pseudo-corporatist
arrangements offer symbolic inclusion in return for acceptance of a weakening of
labour and a radical decline of the welfare state.
Eastern Europe’s Tripartite Experiences
The first tripartite commissions in Eastern Europe were in fact not tripartite at all.
Rather, they were aimed at achieving broad social accord in face of the looming
demise of state socialism. Initiated by Party reformers as a way to manage, or delay,
their impending fall from power, these were bodies where organized social actors
came together to articulate not so much their interests but their hopes for the future.
These were institutions of systemic legitimation, not arenas for conflict resolution
or class compromise. Labour was not the central social actor in the process, and
economic issues were only one of many that were discussed. Hungary’s National
98 David Ost
Interest Reconciliation Council in 1988–1989 included representatives of youth

organizations but not those of the newly-formed League of Independent Trade
Unions. Poland’s Round Table discussions of 1989 included student representatives
as well as farmers and the Catholic Church. Bulgaria’s first tripartite commission in
1990 was open to ‘any interested organization or institution’, and the National Student
Confederation regularly attended the meetings (Iankova 1997: 48).
Very soon, however, the commissions began focusing on economic concerns.
Formally, elections had now become the vehicles for political legitimation. But
declines of 20–40% in earnings and living standards posed obvious dangers to any
democratically elected government, especially given patterns of weak or non-existent
party loyalty. Here is where tripartite bodies began taking the shape of West European
corporatist bodies, bringing together representatives of labour, employers (not the
same as ‘capital’), and the state.
East Europe’s first tripartite commission, the National Interest Reconciliation
Council in Hungary, was explicitly aimed at enabling the move to a market economy.
It arose in December 1988, still formally under the old regime, when the Party-led
government announced the suspension of central wage regulation. Needing a new
mechanism for wage setting after the central planners, those planners decided to
create a forum where ostensibly competing sides, designated ‘social partners’ in line
with fashionable European lingo, could work out the details themselves. As one inside
observer puts it, the ‘NIRC was both a means for and the immediate outcome of’
wage deregulation (Lado 1997: 3). The commission had a strong political component,
aimed at helping the Party in future competitive elections by demonstrating its
social concerns. It was also a way of propping up the official trade unions, given sole
representation of labour while the new unofficial unions were excluded (though in the
absence of full systemic democratization, the latter would have refused an invitation
anyway).
Hobbled by its links to an obsolescent system, the NIRC lasted only till the
first democratic elections in spring 1990. But it did spawn an heir: the Interest
Reconciliation Council (IRC), established by the new government in 1990, with
the participation of several national trade unions and employers organizations.
As elsewhere in the region, with the partial exception of Poland, these were not
embedded social organizations entrenched in their respective communities with
a loyal, committed, and disciplined following. Instead, they were largely the
organizational remnants of the past. Among unions, the old official federation
maintained its dominant place, due to inertia and continuing labour passivity rather
than to any grand mobilizing prowess. (In the late communist period, Hungarian
workers sought to better themselves by taking advantage of economic opportunities,

not by trying to open up political ones). As for employer organizations, these mostly
brought together managers of state-owned industry, still uncertain of their interests.
Tripartism began not as a result of the government trying to mediate the conflicting
interests of labour and capital, but as a way of providing societal support for the
government to reform the economy as it wished.
Even after authorizing the IRC, the new government was hardly committed to
it. The government saw the job of social transformation as its own business, not
that of the unions or anyone else, and proceeded to introduce its economically
liberalizing agenda without public consultation (see: Stark, Bruszt 1998: 142–154).
But government plans ran into popular opposition, which came together in a street
blockade by Budapest taxi drivers protesting the high price of gasoline. Despite
the huge inconvenience of the protest, it enjoyed great public support. Accused of
ignoring discontent rather than managing it, the government cautiously reembraced
the tripartite structures. Just how cautiously became clear in the scope of policy issues
the government left it to the IRC to decide. Aside from helping draw up a new labour
code confirming the state’s withdrawal from enterprise micromanagement, the IRC’s
chief contribution to industrial relations was to propose minimal wage guidelines.
Plenary tripartite meetings discussed minimum wages and selected legislative issues,
while working sessions dealt with sectoral concerns. Ensuing sectoral collective
agreements set low national industrial standards, frequently just restating legal
regulations, which in any case were poorly enforced, and established non-binding
guidelines on wage, price and taxing policy. Even tripartite supporters considered
the agreements of small significance (Lado 1997: 17).
So did voters. The decrease in living standards and the rapid increase in
bankruptcies and unemployment made the call for a ‘social pact’ the watchword
of the 1994 electoral campaign – almost as if no tripartite mechanism had already
existed. All opposition parties supported the concept, and when the (ex-communist)
Socialist Party won, it set out to bring it to life. The problem was determining with
whom exactly a pact was to be made: IRC members only or all of society? The lack
of embeddedness of the proclaimed social partners proved to be a major obstacle.
Lacking widespread legitimacy or even stable constituencies, and unable to command
adherence to any agreement, the unions and employers organizations were clearly
not the social partners they aspired to be. On the other hand, they were the ones
that officially existed, with bureaucratic resources and an institution (the IRC) that,
however weak, had been created for the purpose of attaining social harmony. The
new government chose simultaneously to use and dilute the IRC: a Social Economic
100 David Ost
Agreement (SEA) was to be negotiated within the tripartite institutional framework,

but IRC members were charged with integrating other social groups outside of the
council (Ibidem: 13).
With six trade union federations and nine employer organizations to begin with,
expansion would seem to make a binding accord even more unlikely. On the other
hand, the inherent weakness of the organizations made expansion a condition for
producing a socially binding accord. The ensuing confusion surprised no one. Begun
in high profile in July 1994, the two sides took till October, the scheduled concluding
date, just to agree on an agenda. With the budget due the following month, the
government simply acted alone, pushing through harsh austerity measures that
made subsequent SEA negotiations even more difficult. Talks aimed at a broad
social pact dragged on into February 1995, when the government itself called it quits,
withdrawing from the negotiations it had started with such fanfare. Committed to
introducing new fiscal discipline and to cutting real wages, the Socialist government
unilaterally imposed its austerity budget and reinstituted wage controls, bypassing
the IRC while continuing to claim commitment to the tripartite process.
The SEA fiasco initiated the decline of tripartism in Hungary. Sessions continued
to be held, but in an atmosphere marked by what has been described as official
‘contempt for deliberations’: the Socialist Finance Minister would ‘invite comments
about details’ but present their program as ‘nonnegotiable’ (Stark, Bruszt 1998: 174).
No agreement could be reached in 1995 or 1996, and the government now acted
regularly on its own, as if its social democratic label were sufficient proof of its good
will. With regular tripartite meetings still taking place, the Socialist government
passed laws reducing employee protection at the workplace and turned a blind eye
to job safety and forced overtime violations, being particularly lax in dealing with
foreign-owned business. Some, though not all, government proposals were brought
before the tripartite commissions, but even if the union side wanted to mount
opposition, it was barely able to do so, as official documentation was regularly
delivered to tripartite participants just a day or two before the meeting. Sometimes it
was even worse. Maria Lado, director of the Labour Research Institute in Hungary,
describes tripartite meetings where ‘everyone is gathered for supposedly serious
discussions on serious matters, but in fact the union representatives are seeing the
documents pertaining to the day’s agenda for the very first time at the meeting
itself’8. More often than not, the unions end up signing the documents. Experience
has taught the unions not to take tripartism too seriously. Its chief benefit, according
8 Conversation with Maria Lado, Budapest, December 1997.

to Lado, has been in providing a space for representatives of key groups simply to
meet each other, thereby creating a network that, while increasing opportunities for
corruption, also facilitates the resolution of conflicts on an informal basis. It bodes
ill for East European corporatism (and worse for labour relations in general) if the
best that can be said about tripartism is that it facilitates the informal contacts able
to resolve select conflicts without government participation.
By 1998, the IRC turned essentially into an informal consultative body
legitimizing government-imposed neoliberalism. When elections that year ousted
the Socialists and brought the neoliberal Fidesz party to power, in coalition with
a conservative farmers’ party, tripartism went into even further decline. Apparently
feeling that market rules were secure, the new government sought to dismantle
the few ways in which labour could still articulate its interests in public forums.
It eliminated tripartite bodies dealing with pension and health insurance issues,
and proposed a restructuring of IRC that would further reduce its scope. Hungary
may have had over a decade’s experience with tripartism, but it has certainly not
produced the concertation, much less the economic growth and security, that
effective neocorporatism signifies in the West. Instead, the Hungarian experience
is one of weak tripartites passing unenforceable agreements, treated instrumentally
and imperiously by the government, impotent in defending workers’ interests and
serving as cover for the onset of a neoliberal economy. With few differences, this is
the same pattern we see elsewhere in the region9.
In the initial post-1989 years, labour did better in the Czech Republic than in
any other country of the region, with low unemployment, pro-active labour market
policies, and citizen privatization (Orenstein 2000; Ost 1997). Stark & Bruszt and
Melanie Tatur see it as Eastern Europe’s corporatist country par excellence (Stark,
Bruszt 1998; Tatur 1994). A closer look, however, shows that any real benefits labour
has won, it has won outside of the tripartite process, while the latter has served chiefly
to contain labour.
This was first apparent at the inaugural session of the Czechoslovak tripartite
body, the Council of Economic and Social Agreement (CESA). The unions had high
hopes for CESA when it met for the first time in September 1990. In the previous
9 Besides the quoted sources, information for the following accounts come from participants in
a May 1999 Warsaw conference on labor quiescence in postcommunist societies, including Mihail
Arandarenko, Stephen Crowley, Grigor Gradev, David Kideckel, Evgenii Kopatko, Anna Pollert,
Jonathan Stein,Andras Toth,and Wlodzimierz Pankow. For their papers see Crowley, Ost 2001. Thanks
to the National Council of Eurasian and East European Research and to the Institute of Public Affairs
(Warsaw) for helping fund the conference.
102 David Ost
months, the government had proposed measures depriving unions of the power
to block dismissals and limiting access to company information. CSKOS (the
Czechoslovak trade union federation) saw CESA as a way to counter such proposals.
But after the first tripartite sessions, the government brought the bills to parliament
with only cosmetic changes. The union did manage to secure changes in the bills,
but only thanks to a general strike threat in November 1990. In CESA, labour’s voice
was heard, and then ignored. The government saw tripartism not as an invitation to
discuss to discuss the road to be taken, but as a way of securing labour’s assent.
CESA then moved on to the more prosaic task of preparing an annual General
Agreement, which quickly became the primary activity of Czech tripartism. Each
year, participants devoted long hours and many sessions to coming up with broad
guidelines on wages and job standards. Yet the guidelines were largely unenforceable,
since they applied only to the state-owned economy, which declined precipitously
(albeit only formally) due to the sleight of hand of voucher privatization10. The
government did consider itself bound by agreements concerning the public sector
(chiefly health, education and transport), yet even here enforcement was a problem.
The 1991 General Agreement, for example, specified that real wages would fall by no
more than 10%. (This being initial post-communism, social actors negotiated not
wage hikes but wage cuts.) The actual decline was 26% (Cziria 1995: 75).
CESA did sponsor collective bargaining in the ‘privatized’ industrial sectors,
but agreements here also amounted to little, as enterprises could and did opt out
simply by informing others of their intention. The government, meanwhile, exerted
little effort to get enterprises to comply. Indeed, in 1993 the government of the
newly-truncated Czech Republic proposed withdrawing entirely from the Council
on the grounds that what happened in a private economy was the business of labour
and capital alone. So much for a corporatist sense of ‘organic unity’.
The record seems to bear out the view of Vladislav Flek, an industrial relations
expert with the Czech National Bank, that union experience in CESA has been
‘embarrassing, its influence near zero’11. But how then to explain the better deal that
Czech unions got? A crucial factor, clearly, is the country’s pre-existing economic
conditions. Almost alone of the former communist countries, Czechoslovakia
10Banks run by the state quickly gained control of most of the vouchers given to citizens, thus
giving the state dominant control of ostensibly ‘private’ enterprises. In fact, the Czech state controlled
private firms more than the Polish state controlled state firms, which were legally governed by employee
councils(see: Orenstein, Brom; 1994).
11 Conversation with Flek in Prague, October 1996.
had virtually no foreign debt. Labour also appears to have been slightly more
class-conscious in postcommunist Czechoslovakia than in neighbouring countries,
perhaps because of the lesser degree to which pro-market ideology had penetrated
society, and because the still-centralized unions needed some common enemy against
which to define themselves (see: Ost 1997). Most union gains, however, came not
because unions demanded them, or won them through negotiations, but because
the elite wanted to maintain social peace and could afford to do so12. The record for
labour may have been slightly better than elsewhere, but the record of tripartism
was not.
Although the Czech government retreated on its threat to quit tripartism in 1993,
it quit being interested in securing any deals. The draft legislation that was supposed
to be submitted to CESA came irregularly and incomplete. Government officials
presented their proposals as firm plans, not as the basis for discussion13 (Orenstein
1995). When the General Agreement negotiations of 1994 continued this pattern,
CMKOS (the Czech union confederation after the split with Slovakia) withdrew
from CESA, and tripartism seemed dead. It was only when the government needed
to push enterprises toward the painful restructuring it had avoided earlier that
liberals showed renewed interest in tripartism. With the Social Democrats playing
the issue for political purposes, the commission was revived in 1997 with a new name
and minor structural changes (Pullet 2001). CMKOS rejoined, but duly chastened,
grateful for the symbolic ‘re-recognition’ and demanding little in return.
In Slovakia, meanwhile, the situation has been even worse. Like the Czech
Republic, Slovakia maintained its tripartite institution after the breakup of the
country in 1993. But the Meciar government began a pattern of systematic disregard
of the unions and of the tripartite council. CESA statutes said the council would meet
‘as necessary’, which in practice meant once every month or two. Yet Meciar now kept
postponing tripartite meetings. When they did take place, the government was not
prepared. When General Agreements were finally signed, they were not respected.
Union demands for labour courts, for example, were included in successive General
Agreements, but the government never took action to introduce them14.
12 It also sought to divert attention from rampant insider corruption. As for Czech labor’s gains,
they did not amount to much: chiefly lower unemployment rates, paid for by substantial real wage
losses and, in 1993, by the jettisoning of Slovakia(Orenstein 1998).
13 Orenstein acknowledges all this, yet continues to call Czech labor relations corporatist.
14 Conversation with Jonathan Stein of Prague’s East-West Centre, May 1999.
104 David Ost
Even symbolic labour incorporation broke down in 1997, when the government
unilaterally imposed wage controls, after having explicitly promised in the General
Agreement not to do so without consultation. The unions responded by withdrawing
from the tripartite council. Meciar then tried to set up his own tripartism, with the
participation of a few small pro-government yellow unions, but this only politicized
the entire situation. The unions now allied with opposition political parties who
promised to reinvigorate tripartism if they won, and when they did, in October 1998,
tripartite meetings soon resumed. Under the watchful eyes of western international
institutions, however, the new government did little more than reaffirm unions’ basic
democratic rights.
Pressure from international forces magnified tripartite problems in Bulgaria
as well. Here, like in Hungary, it was the communist government (though after the
resignation of Todor Zhivkov in November 1989) that initiated tripartism as a way
of managing the political transition. Seeking to undermine the oppositionist trade
union ‘Podkrepa’, whose power was based on organizing strikes and direct action, the
government embraced a formal tripartism, whose style of bureaucratic negotiations
and decision-making would, it thought, help revive the official union confederation
(Gradev 2001). Podkrepa thus opposed the formation of the tripartite commission.
The government defended it as a sign of its commitment to ‘European norms’, and
to ILO regulations.
In 1991, the tripartite commission gave its approval to a radical macroeconomic
stabilization program allowing broad social cutbacks. The government rewarded
the unions by adopting a new labour code institutionalizing the role of tripartism.
The discussions that ensued, however, amounted to little more than the government
insisting on more and more concessions from the unions. Owing to the poor economic
situation, benefits to labour were always said to be coming in the future, and for the
most part the unions agreed. The trump card here was the IMF. Having accepted
a large bailout program, the government regularly cited the IMF as the grounds for
keeping all societal demands off the agenda. Tripartism itself became little more than
a shell. As the sociologist and union adviser Grigor Gradev has argued, its sessions
were ‘not tripartite but quadripartite, with the main partner, the IMF, outside the
system’.1 (Ibidem). The tripartites, therefore, were not the place for negotiating the
incorporation of labour. As Gradev notes, tripartism in Bulgaria did not solve any
major labour conflicts or impart any positive dynamism to the economy. And most
important: ‘In terms of quality of work and life, tripartism could not deliver gains,
however small, to any of the social partners’. At best, it helped produce a fairer
‘distribution of losses’.
Despite the insignificance of the tripartite’s decision-making power, the

government still preferred keeping its members away from vital information. The
same kind of official disrespect of the institution as elsewhere led to frequent union
walkouts: first in 1994, and then regularly in 1996. Tripartism was revived only in
1997, when a new liberal government sought to use its structures to help sell its
austerity package to the public.
Significantly, Poland was the only country in which formal tripartite boards were
not introduced soon after 1989. But this merely supports the point that the new elites
deployed tripartism as a way of winning workers over to neoliberalism. For in Poland,
tripartite boards were not necessary to win labour over; Solidarity had already done it
for them. Indeed, for the Party and Solidarity, the Round Table negotiations of spring
1989 were the functional equivalent of a tripartite arrangement, albeit a once-only
shot. In these talks, representatives of state and employer (the two were still the same)
met with representatives of labour to decide on policy that would be binding on all.
Solidarity, and particularly its intellectual leaders, interpreted 1989 as the moment
when workers had won. And the workers, loyal to their leaders who had withstood
martial law, jail terms, and constant persecution without capitulating, went along.
Support for the Balcerowicz Plan of shock therapy reached over 80% in early 1990, an
astonishing figure that workers confirmed in practice by weathering a 40% decline in
living standards for the next two years with record low levels of strikes (Kloc 1992).
The Polish elite did not need tripartism because workers embraced the transition
themselves. Only when workers were turning away from the elite’s program in
1999–1993, and Solidarity as trade union began breaking from Solidarity as reformist
government, did the government offer tripartism as a mode of soothing workers.
In 1994, its first year, the Tripartite Commission did not accomplish much, partly
because Solidarity rejected it in favour of bilateral negotiations between itself and the
government. It sought direct negotiations without other trade unions and employers’
organizations, and refused to be considered part of the same side as the former
official union organization OPZZ. In January 1995, the Socialist government used the
occasion of conflicts in the health sector to break the impasse: offering higher wages
and more funding to the public sector in general in return for a moratorium on strike
activity. The deal lasted for two years, until Solidarity, in preparation for upcoming
elections, blocked a 1997 agreement. When the Solidarity-supported coalition won
the elections, OPZZ returned the favour the next year. By 1999, tripartite activity had
almost completely broken down: OPZZ regularly boycotted plenary sessions, and
even some Solidarity delegates tacitly supported them. (One Solidarity representative
huffed about “the arrogance of the ministers – ‘our’ ministers – who come into
106 David Ost
a meeting and say ‘we can offer 2%, nothing more, take it or leave it, and I can’t waste
any time talking to you’. I’m not surprised, she continued, ‘OPZZ no longer shows
up’)15. As elsewhere, the main task of Poland’s tripartite commission has been to
secure labour’s consent to its own marginalization.
The Nature of East European Tripartism
All in all, actually-existing tripartism in postcommunist Europe shows a consistent

pattern of belittling of unions, non-binding agreements, restrictions to the state
sector, and general tripartite impotence. Official intransigence has led to union
boycotts in Poland, Bulgaria, the Czech Republic, and Slovakia which, even when
they succeed, bring about little more than a kinder, gentler demeanour, rather than
a better deal for labour.
In an effective neocorporatist framework, tripartism is a forum for labour,
employers, and the state to engage in a bargained exchange over employment,
wages, and income policy, with the expectation that the ensuing agreements will
be realized. In Eastern Europe, the best that can be said is that tripartism means
formal negotiations over very broad issues, with no guarantee that the agreements
will become law or be respected by employers16). To hear labour participants tell it,
equally likely are tripartite sessions where the government simply informs ‘social
partners’ of its intentions and seeks labour assent to fait accompli.
In the end, tripartism has played an almost entirely symbolic role. By implying
that bourgeois class formation and upward distribution of wealth are more contested
than is actually the case, tripartism helps elicit popular support for neoliberal
transformation. Its low content but high symbolic power is evident in tripartism’s
continual ups and downs: offered with great fanfare after 1989, it is soon downplayed
by decision makers, until labour dissatisfaction causes it to be trotted out once again.
The actual pace is different in each country: embraced early in Hungary, only to
be minimized in the mid-‘90s by the Socialist government and openly challenged
15 Conversation with Ewa Tomaszewska, May 1999.

16Jelle Visser and Anton Hemerijck argue that soft recommendations can sometimes facilitate
stable corporatist agreements better than binding pacts by drawing in skeptical, militant unionists who
might feel they have to oppose a binding deal. In Eastern Europe, however, the problem was not to bring
union elites to the bargaining table (all eagerly accepted all offers) but to provide the concrete benefits
that would make tripartism seem worthwhile to their constituents(see: Visser, Hemerijck 1997: 82).
by the agrarian-liberal administration of the late-‘90s; rejected early in Poland,

then embraced in the middle of the decade by the Socialist government before
being minimized by the conservative Solidarity government17 (see: Donosy 1999);
in the Czech Republic embraced, renounced, and re-embraced by liberals between
1990 and 1997. But everywhere the pattern of acceptance and rejection holds true,
while macroeconomic policy remains constant. Tripartism should be seen as one of
the mechanisms through which capitalism legitimizes itself, rather than as a forum
for a real negotiation of interests18.
Perhaps the biggest obstacle to a genuine ‘transformative corporatism’ is that
tripartite commissions affect mostly the state sphere. Private owners are barely
represented. And when they are, it is for the most part only domestic owners that are
represented. Each country in the region is actively soliciting foreign capital, but the
latter is largely absent from the region’s tripartite councils19. Tripartite discussions
thus concern policy for the state sphere, where the chief issue is how to manage
long-term decline. In the private sphere, tripartites try to establish minimum ground
rules, and then push matters to bilateral collective bargaining (if business agrees),
with capital having the upper hand. For the most part, then, tripartism does not affect
that sector where the long-term stability of industrial relations will be established. It
is too early to tell whether tripartites will even survive the consolidation of a private
economy20.
The dearth of negotiations in the private sphere is perhaps the best evidence
that the real aim of post-communist tripartism is to get workers to buy into the
new system, and not to secure a stake in it. In Poland, one of the main issues in
the tripartite bodies has been negotiating the terms of privatization, specifically
the shares of privatized enterprises that workers are entitled to receive. While no
doubt a real benefit to workers, this is a one-time deal only, with no effect on the way
17 In December 1999, in another typical reversal, this time in response to a new round of labor
protests, the Polish Ministry of Labor sought to revive and reorganize the Tripartite Commission,
‘whose activity’, it was reported, ‘has practically ceased in recent months’.
18 The empirical evidence shows that labor has rarely won anything except formal representation
for its elites. Petra Stykow is right when she presents East European tripartites as ‘elite cooperation
projects’ rather than corporatist arrangements (Stykow 1996: 10).
19 In exceptional cases, such as in Hungary, multinationals have their own employers organization,
which has little to do with tripartite meetings chiefly concerned with setting minimum wages.
20 The Russian Tripartite Commission had already by 1995 become ‘dead for all practical purposes,
declared to be nothing more than a ‘decorative’ body even by pro-Yeltsin labor leaders who had signed
the original agreement’ (Sil 1996: 13).
108 David Ost
workplace relations will be organized in the future. Tripartism here serves chiefly
to buy workers’ acceptance of a private economy, not to negotiate the terms of that
economy or to secure labour’s long-term, consensual integration into it.
In the end, this is what tripartism seems to be doing everywhere in the region:
emergency room duty to limit discontent, aimed chiefly to bring labour in on its own
decline, and offering no long-term, institutional solutions on how industrial relations
are to be organized in the new private economy. In the short-run, this strategy
may reduce discontent. But by producing no rules for the future, the question of
integrating labour into the political system is still unresolved.
It should be noted that while tripartism has helped legitimate an essentially
neoliberal agenda, it was not originally a neoliberal idea. On the contrary, neoliberals
hoped to introduce their changes without any citizen participation. They favoured
‘shock therapy’, and saw civic involvement as something that would only delay
necessary changes. Th is of course followed naturally from their aim: to carry
out a transformation ‘in the interests of a class that does not exist’, as numerous
neoliberal politicians put it (Balcerowicz 1996). By posing matters in this way, they
defined existing social groups as part of the problem. If their constituency did not
yet exist, any civic involvement necessarily favoured anti-reformers. They wanted not
tripartism but rule by decree.
The problem, however, was that they had to deal with citizens – with real groups
who, even if they believed in the neoliberal agenda, had interests that opposed it. They
may have wanted to represent a future constituency, but they needed to represent
the actual one if they were to be reelected. Then there were the political opponents.
Standing against the neoliberals were a small but initially influential group of
democratic or ‘civic’ socialists (usually former dissidents), who favoured citizen
participation rather than state-imposed shock therapy, as well as various ‘gradualists’
or ‘interactionists’ (including socialists and populists) who stressed the importance of
an embedded transformation that utilized rather than eliminated existing networks21.
Tripartism appealed to both groups as a way to increase civic involvement. The former
saw it as a means of involving labour in processes of democratic self-government,
while for the latter tripartism was a way to marshal existing social networks in order
to create a durable national capitalism.
21
See Beverley Crawford’s discussion of gradualism (Crawford 1995); also Stark and Bruszt, who
speak of ‘interactionism’ (Stark, Bruszt 1998); and Jerzy Hausner, Bob Jessop, and Klaus Nielsen’s
network analysis(Hausner, Jessop, Nielsen 1995).
Since neoliberals had no choice but to make concessions to present (as opposed
to future) constituencies, tripartism appeared as one easy way to do so. They could
accept tripartism because it came with strong west European credentials, thus proving
its compatibility with a market economy, and because they, the neoliberals, already
controlled the reins of economic power22. The latter meant that while tripartism
might force them to listen to other social groups, it could not force them to obey. And
as we have seen, this is exactly what happened.
The Limits of Post-Communist Incorporation
Why has inclusion in postcommunist tripartite arrangements led to such different

outcomes from inclusion in western neocorporatist systems? Why is one inclusion
so different from the other inclusion?
A common view is that times are different, and that what was possible once in
the West is not possible today in the East (or, for that matter, in the West), due to
changes in the economy and in the class structure. According to this view, labour is
not as able to assert its power as previously because of the move away from a heavy
manufacturing economy and towards a postindustrial one. Bela Greskovits speaks of
the growing ‘tertiarization’ of the East European economy, with its expanding service
sector, and the rapid increase of part-time, non-benefited, and other ‘precarious
forms of employment’. (Greskovits 1996: 105). This process has of course weakened
labour’s effectiveness in the West, too (Martin, Ross 1999; Rifk in 1996). It does so
by diluting labour’s identity and robbing it of resources for collective action. The
decline of the industrial economy of the past means the demise of the large factories
based on standard, interchangeable work processes and secure employment that
allowed workers to develop a sense of collective identity and gave them the strength
to strike. As factories can do with less industrial labour, workers begin to treat other
workers as competitors rather than as members of the same class. Smaller firms,
meanwhile, always weaken class identities, because they tend to produce personalistic
and clientelistic relations that counteract the abstractness of class relations.
22 Neoliberals dominated the all-powerful fi nance ministries throughout Eastern Europe in

the immediate postcommunist period. Indeed, Bela Greskovits argues that this was the key to their
triumph. They did so, he claims, not because their policies were best, but because they were well
organized in tight-knit, entrenched, secluded bureaucratic teams, isolated from societal interests and
united by personal ties stemming from common backgrounds(Greskovits 1998).
110 David Ost
Yet to claim that objective economic characteristics of globalism and

postindustrialism are determinate ignores the fact that objective conditions were so
different east and west. The postindustrial process began in Eastern Europe only after
1989. Yet the labour movement in the initial postcommunist period was unwilling to
assert its clout even when it still could, when East Europe still had a mostly state-owned
heavy manufacturing and non-competitive economy. Labour incorporation has
never been a result simply of a growing national industrial economy. It has required
ideas as well: class-conscious unions fighting for incorporation. And this is what is
notably lacking in Eastern Europe. Apart from objective conditions, the problem in
Eastern Europe has been labour’s own self-marginalization: its moderation and low
self-confidence make it unable to secure a social democratic corporatist inclusion.
My argument, then, is that an ideational explanation is crucial for understanding
why East European tripartism has led to such different outcomes than West European
social partnership. Such an approach looks at the autonomous role of socially
constructed ideas in shaping institutional patterns and policy outcomes. These ideas
derive from East European labour’s peculiar class position. Labour in postcommunist
societies occupies a specific type of ‘class habitus’, which Bourdieu defines as ‘the
internalized form of class condition and of the conditionings it entails, (Bourdieu
1984: 101), that drives it to undermine its own role as a legitimate other in a capitalist
economy. The experiences both of communism and of the exit from communism
leave labour with a narrative of its role that is self-defeating (from the perspective of
labour in a capitalist economy), and thus incapable of supplying the groundwork for
an inclusive neocorporatist arrangement.
We see these ideas in both the discourse and the practices of workers. I am
referring here first of all to the strong support ‘capitalism’ enjoys, by virtue of it being
the putative opposite of the system that was in place for half a century. That support
was so widespread that Lech Walesa was able to run a successful presidential campaign
in 1990 by arguing that the pain workers were experiencing from the initial move
towards capitalism could be solved only by more capitalism and more privatization.
Or, as Aleksandr Sergeev, a leader of the Russian Independent Miners Union said in
1991, ‘we naturally support the new bourgeoisie’ (Mandel 1994: 184). I put ‘capitalism’
in quotes since the support is for the image and promise of capitalism more than for
its real effects; for the ideals of capitalism rather than for ‘really-existing’ capitalism.
But it is precisely this support for imaginary capitalism that contributes to a weak
union identity23.
23 On ideas as a key explanation for union weakness in Eastern Europe, see also Frege 2000.
For capitalism is generally perceived by the populace in post-communist societies

as a system in which rights flow to owners and in which workers have minimal input.
Nothing imaginary there, of course, but it’s the punchline that counts: that this system
in which workers are excluded in the workplace somehow leads to their inclusion
on payday. This might be seen as what James Scott calls the ‘little tradition’ within
radical movements, referring to how followers understand the goals of a struggle
very differently from their leaders (Scott 1977). Whereas the leaders of East Europe’s
anti-communist struggles came to understand and accept capitalism as a system in
which workers would have to suffer, labour understood it as one in which hard work
is rewarded with good pay. Instead of ‘they pretend to pay us and we pretend to work’,
the new system was envisioned as ‘they pay us well for our hard work’.
Such ideas were the result not simply of embracing the enemy’s enemy. The
neoliberal turn of the East European opposition during the 1980s, a response both to
its previous failures and to newly fashionable western policy prescriptions, also played
an important role here. But such ideas follow from real experiences too – in particular,
that of hundreds of thousands of East Europeans in the 1970s and 1980s working as
‘guestworkers’ (legally or illegally) in the West. Any objective account would describe
their terms of employment as extremely exploitative, as the illegals worked long hours
for below minimum wages in awful conditions without any benefits.24 Yet the pittance
wages became gold when brought back home, where monthly pay rarely exceeded $20
per month. The specificities of global labour migration and unequal trade combined
to provide East European workers with a vision of capitalism in which exploitation
has a silver lining and collective action is simply unimportant.
Ignorant of the real history of capitalism in the West, where workers won
inclusion (the welfare state) not because of the largesse of owners but because they
organized unions and parties that fought for inclusion – this was a lesson that
neither side in the Cold War was interested in teaching – Central European workers
have been reluctant to build strong unions because they fear this will hurt their
chances to benefit from the new economic system. Although unions originated
as part of the struggle against capital, in Eastern Europe they are associated with
communism. Unions are treated not as part of a struggle for anything, but as part of
the system against which people struggled. (Even Lech Walesa in 1989 argued against
24 Polish workers in New York, for example, were employed clearing asbestos. Poles were the most
numerous of the illegal ‘guestworkers’, and Yugoslavs were the most numerous of the legal ones, but
East Europeans from all countries heard their stories on the beaches of Bulgaria and saw the results on
the Croatian coast (to name two of the few places where East Europeans were able to meet each other
during the communist era).
112 David Ost
the rebuilding of a strong Solidarity: ‘We will not catch up to Europe if we build
a strong union’) (Tygodnik Solidarnosc 1989). Union membership has plummeted
throughout the region not just because it is suddenly not obligatory, but because
people don’t believe they need unions. When asked who best defends their interests
in the workplace, workers – even those who are union members – overwhelmingly
choose the category ‘no one’.
A lack of interest in neocorporatist inclusion is evident also in the practices of
trade unions. Here I want to share some observations from extensive field-work that
I conducted in factories and industrial regions in Poland25. There are two features
of postcommunist unionism that have profound implications for the future of trade
unions in the area: the first concerns class consciousness, the second structural
location. First, far from being proud of their organizations, union members tend to
be apologetic about their allegiance. When I first started doing research in factories
in the area, I expected it would be easy to find union members eager to talk about
the changing roles of unions. It turned out that rank-and-file union members would
only grudgingly admit to their status. They seemed particularly reluctant to admit
this to an American, who was regularly perceived to be some sort of representative
of a system that had ‘gone beyond’ unionism and had, for that very reason, become
so successful. Being a union member is often perceived by unionists themselves
as a sign of weakness, a sign that they and their enterprise lack the qualities that
bring success. Workers often seek ‘excuses’ for membership, citing inertia (‘I’ve
always belonged to the union’), or personal gain (‘the union gives me a loan’). The
embarrassment extends even to union activists. Many local union leaders I have
met rush to assure me that they, personally, could get ahead if they wanted to, but
they are involved in union work out of concern for their co-workers. In this view,
union activity is something to be done out of pity for the less fortunate. ‘I became
head of Solidarity here’, said one union leader in a small Polish metal manufacturing
plant in 1993, ‘because I knew that people here were going to suffer a great deal, and
they needed someone to protect them’. Some unionists get tired of doing this. One
25Between 1992 and 1995, I regularly visited manufacturing plants and talked with union leaders
(enterprise and regional level) as well as unionists in six highly industrialized Polish cities – Mielec,
Stalowa Wola, Rzeszow, Starachowice, Katowice, and Bytom – as well as Warsaw. (I have revisited
since then only irregularly.) My observations are also based on a survey of unionists in ninety-five
manufacturing enterprises conducted in 1994. On the latter, see Ost, Weinstein 1999. Neither study
has been replicated outside of Poland, but the collection of essays edited by Crowley and Ost suggests
that the conclusions concerning weak union identities and acquiescent labor sensibilities are largely
generalizable across the region (Crowley, Ost 2001).
Solidarity official at a large aircraft manufacturing plant in southeastern Poland told

me in 1994 that he was quitting the union because he was tired of helping out others
at the cost of his own career. Instead of unions fighting to win justice for those who
produce wealth, unions are seen as rearguard institutions protecting the weak until
they don’t need unions anymore.
The broader point here is that East European workers and unionists eschew class
identities. They do not think of themselves as a separate class requiring separate
organizations to defend their interests. This attitude is a legacy both of communism
and of anti-communism. During the communist era, class boundaries were extremely
fuzzy, arguably non-existent (see: Ost 1993). Class analysis of state socialist societies
was never very successful. And no surprise, given that everyone was an employee
of the state, with inequalities based on access to power rather than property, and
privileges insecure and mostly non-inheritable (Szelenyi 1983). The class nature of
trade unions, meanwhile, was diluted by the fact that managers were members,
while claims about the ‘working class nature’ of the ruling Party had long been just
a bad joke. But if communism was responsible for the absence of class cleavages, so
was anti-communism. With its powerless civil society, communism insured that
all opposition would be directed at the state, rather than against societal others.
Even in Poland, where a trade union led the movement against the old regime,
Solidarity explicitly and self-consciously muted its working class character in favour
of a struggle for social rights for all, where workers as such would no longer have any
privileged claim (see: Ost 1996). All this is hardly a basis on which to construct solid
corporatist relations.
Besides weak class consciousness, the second important aspect of contemporary
East European unionism is their structural location: they exist almost solely in
state-owned and formerly state-owned enterprises. This is because, as non-capitalist
firms, these are the ones considered weak and inefficient, and thus the only ones that
really need unions. In a reversal of the logic with which unions were constructed in
the West, workers feel they need unions not in order to resist owners but precisely
because there are no owners. Lacking owners, enterprises remain public property
that unions must help safeguard until owners emerge. Unions usually survive in
state-owned firms that have become privatized, though they typically restrain their
activities. The problem, however, is that they almost never arise in new private firms.
In other words, just as the former communist economies are becoming private, the
private sector is becoming union-free. In such firms, not only do workers not form
unions, but national unions do not seek to organize them. In conversations in small
industrial towns, unionists openly acknowledge their unwillingness to try to extend
114 David Ost
their operations to the new private sphere26. This seems due to three factors: first,
a lingering belief that private firms will operate better – for workers too – if unions
are not present. Even when unionists are not convinced of this truth, they are willing
to entertain it as a plausible hypothesis, and refrain from organizing as a kind of test
to see if it’s true. In other words, on the question of whether unions are needed in
private firms, there appear to be only naysayers and skeptics, and few proponents.
Second, there is a general ‘allergy’ against the notion of recruitment. Glad that the
old days of obligatory unionism are over, unionists seem to see it as bad taste to try to
convince others to join. ‘We have our activity, our program’, one Solidarity unionist
in Rzeszow told me, ‘and if workers like it, they can join us’. Third, there is a belief that
different rules and customs apply in private and state firms. In particular, this seems
to apply to strikes. In a survey Marc Weinstein and I organized in 1994, one Polish
unionist in a privatized firm, when asked whether there were work stoppages in his
plant, looked at the surveyer as if she were dim–witted. ‘We can’t stop work at this
plant anymore. Don’t you understand, it’s private now!’ There has yet to be a major
strike against a private employer anywhere in postcommunist Eastern Europe. We
have a major conundrum here: workers are reluctant to join unions, activists are
reluctant to recruit, and so unions cannot win the victories that could possibly secure
workforce loyalty in the future.
The combined result of these factors is that unions are unable to emerge as
a convincing social partner. This is a poor basis on which to achieve a durable
neocorporatist arrangement.
Why Inclusion?
The question, then, is why integrate labour at all? Why did governments form
tripartite commissions if they had no commitment to work with unions and if
unions themselves were not strong? Interestingly, we see little correlation with such
traditional explanatory factors as union centralization or links with political parties.
26
When they do try and are illegally rebuffed, they do not always protest. I asked a Warsaw
Solidarity official in 1993 to give me the names of the three private firms she had been telling me about
that had fired union organizers. She refused, even though she knew me to be a union supporter who
might even be able, through the press, to exert some pressure on the union’s behalf. The long struggle
against communism had made unionists sympathetic to private business, even when their interests
began to clash.
Unions are centralized only in the Czech Republic, but this hasn’t produced a different
or more effective tripartism than elsewhere. As for parties, social democrats promoted
tripartism in Poland but assaulted it in Hungary, while liberals have supported it in
Slovakia. Rather than in structural or conjunctural factors, we must seek the sources
elsewhere.
Four reasons stand out: three stemming from the interests of the new elite, and
a fourth based on legacies. First, there was a desire to share burdens. The neoliberal
transformation was risky economically and politically, and the new governments
sought to share responsibility for tough economic times. Tripartism could serve to
deflect blame and divert the anger of those most deeply affected. Second, tripartism
enhanced the ‘European’ credentials of the postcommunist states. Seen by the
European Union and ILO as the paradigmatic form of inclusion, tripartism enabled
postcommunist governments to demonstrate their institutional correspondence with
modern western democracy, which was crucial to their applications for membership27.
Third, in conditions of new democracy, the governments needed to demonstrate
that they were talking to someone about economic policy, and unions, with their
bureaucratic structures and inherent interests in a growing economy, seemed a more
responsible partner than fledgling organizations of other economic losers such
as unemployed, retirees, or farmers. Tripartism is part of what Greskovits calls
‘compensation’, or the ‘set of measures with which governments attempt to address
the political tensions that arise from crisis, stabilization, and adjustment’ (Greskovits
1998: 137). The question for governments is where to direct the resources and the
political energies in order to best nip any potential budding opposition. Unions
entered the postcommunist period with better organizational capacities than any
other group in civil society28, and with an unwillingness to use them. It made sense
for governments to work with them rather than with new and unpredictable groups
emerging on the scene. Tripartite agreements with unions helped bring social peace
and political stability at a low cost – lower than might have to be paid if and when
dealing with the worst societal losers, who tended to be rural and unemployed,
or with new radical groups pretending to speak for such constituencies. Pacts in
Latin America have been made with established trade unions for the very same
27 Already in 1990, the EU aid program PHARE fi nanced the ‘Project “Social Dialogue”’
instructing all postcommunist states on the details of west European social partnership (see:
Pliszkiewicz 1996: 259).
28 The old dissidents had had the best organization and the most valuable resources, but they had
since become the new elites.
116 David Ost
reasons (Nelson 1992). If the government can neutralize opposition coming from
organizations with established resources, such as trade unions, it minimizes the
threat coming from new and unpredictable ones29.
Finally, some sort or labour inclusion follows from the legacy of state socialism.
In authoritarian non-communist countries, structural adjustment programs have
been introduced without labour input. But in such countries workers do not begin
as the fabled ruling class. Whereas neoliberalism in authoritarian capitalist countries
perpetuates the exclusion of labour, the neoliberal project in communist countries
initiates a profound exclusion, severing labour’s crucial structural and symbolic
position. In the face of cuts on wages and benefits far more severe than workers
with their sunny expectations had anticipated, stability requires maintaining
a semblance of inclusion. Since neoliberal arrangements demand the weakening of
the employment guarantee, drastic price rises, erosion of state subsidies, preferential
treatment of the private sector, and limits on labour’s capacity to disrupt, there are
not many ways that labour can be included. Symbolic inclusion thus becomes all the
more important.
The sheer rapidity with which ostensibly tripartite commissions were established
gives an indication of their role. Except for Poland, tripartite boards were introduced
at the very beginning of the transformation process – not in response to demands by
workers, but as part of the effort of reformers to introduce painful market reform. The
marketizers understood that workers were going to pay a price for the transformation.
Indeed, they identified labour, and not the old elite, as the major obstacle to successful
transition. (The letter, seeking with considerable success to exchange political capital
for economic capital, could be won over to the new system.) The task thus became
how to win workers over to a cause that would exclude them30. Tripartism, a model
readily available in Western Europe (and encouraged by West Europe on the East),
appeared as the model of choice, a tried and tested forum in which labour could be
included without posing threats to emerging capital. Tripartism was an attempt to
secure loyalty by granting voice, hoping thereby to preclude the exit (ie, turn against
marketization) that the reformers most feared.
29Greskovits notes that during social protests in 1992, when the Hungarian government
consciously ‘upgraded’ the unions’ status and the tripartite board in order to avoid dealing with hunger
strikers and to reach an easy accord that would prop up its shaky political coalition. Union bureaucrats,
of course, shared an interest in marginalizing other contenders(see: Greskovits 1998).
30
This is how Adam Przeworski identified the key dilemma of transition. See the final chapter of
his Democracy and the Market (Przeworski 1991).
Thus, if tripartite arrangements in the West were about including the excluded,
in post-communist society they are intended to give limited say to the already
included now headed for marginalization. Unlike in the West, workers in Eastern
Europe did not demand inclusion. Instead, they expected it. Both communists and
anti-communists had valorised the working class: the former because it was the key
part of their legitimacy, the latter because it was a way to undermine communism
from within. The result was that 1989 left labour with more hopes and expectations
than, from a neoliberal perspective, they had any right to have. Just as southeast
Asian peasants expected capitalism to maintain pre-capitalist security, and rejected
it when it did not (Scott 1976), East European labour expected capitalism to maintain
some kind of substantive inclusion, and tripartism was offered to keep labour from
rejecting capitalism when that substantive material inclusion was not forthcoming.
The establishment of tripartite bodies was a means to control labour, not empower it.
If social democratic tripartism resulted from workers resisting the lived realities of
the capitalist experience, East Europe’s neoliberal tripartism is the result of new elites
responding to the formal inclusiveness of the communist experience.
This line of argument might seem contradictory. One might object that unionists
who believe in capitalism do not need to be mollified, or that workers who mistrust
trade unions could not be mollified by symbolic inclusion of its representatives, or
that elites with a compliant labour force have no need to incorporate the latter at all.
Besides the obvious point that labour, even if weak and compliant, always represents
a potential disruptive threat, such objections miss both the specificities of the East
European experience, as well as the way all institutions seek to preclude conflicts by
managing discontent.
First of all, workers may enter the new era as supporters of capitalism, but as their
understanding of it as a system that rewards hard work comes into conflict with the
lived reality, the possibilities of major conflict are never far off. As the country studies
show, tripartites have been a useful forum for managing discontent when it appears.
Second, East European workers are quite accustomed to being represented by
organizations they do not trust. Mistrust of party and union organizations in the
communist era did not prevent workers from turning to them when they needed
assistance. They may not trust unions, but that does not mean they would consent to
their abolition. They understand that unions are the institutions formally responsible
for protecting workers. ‘So let those organizations do their best to do so’, they say,
‘even if we’re not going to help them’.
When governments publicly cite and promote tripartite agreements with union
representatives, this signals non-elites that their interests are being taken into
118 David Ost
account31. Such signals register even with workers who think little of trade unions.
(My earlier point was only that workers do not believe in unions, not that they loathe
them or see them as the enemy.) Formal inclusion, in other words, can mitigate
discontent even among those who profess not to care. The janitor is grateful for the
invitation to the company Christmas party just as much as the non-tenure-track
professor likes being invited to the provost’s picnic. They might even make some
useful contacts there. Yet no one would call this evidence of meaningful inclusion.
The roles of the labourer and the adjunct are sufficiently important to secure them
some recognition, but not enough to give them influence over policy.
To offer one more comparison, there is no reason that Russia ‘needs’ to be invited
to the G–7. Its GDP is lower than that of many excluded countries, while its citizens
regularly profess disinterest in the state’s embeddedness in international institutions.
But historical legacies as well as severe disruptive potential make inclusion necessary
despite Russia’s weaknesses. That inclusion, to be sure, has been purely formal; Russia
has no influence on any of the G–7’s decisions. Yet its elites come to feel that they are
not left out, while the sense that they live in a country still taken seriously serves as
an occasional tonic for common citizens who otherwise say they don’t care, and helps
keep them from a dangerous despondency. Inclusion is necessary despite weakness,
and that inclusion is symbolic.
Workers coming from a communist tradition feel they need some sort of
inclusion. Their vision of capitalism leads them to believe that they will be included
by the market, but as they fi nd this to be untrue, they need to be included in
some other fashion. Symbolic tripartism is not much. If we look at the outcomes
produced by effective neocorporatism in the West, union influence over public
policy (concertation) and increased standard of living for workers, it has not been
very successful for labour. But that is precisely the point. It is a minimal inclusion
to give the illusion of being counted. It probably does help preserve ‘social peace’,
understood as the minimization of labour conflicts32. But given what has happened
to labour in the decade since the fall of communism, minimal conflict has not been
in labour’s interests.
31
Murray Edelman writes eloquently on the conservatively affirmative significance of formal
agreements (see: Edelman 1964; Edelman 1995).
32
I was struck when a Polish union official in charge of tripartite negotiations told me he
considered them ‘very useful’ – at the very moment his union was boycotting them on the grounds that
they were not. Interview with Ryszard Lepik, Vice-President of OPZZ, Warsaw, July 1999.
Conclusion
Neocorporatism integrates workers into the political system by realizing, within limits,
labour’s class interests33, in return for which labour promises to use its organizational
discipline to provide for political and economic stability. What are its conditions?
On the labour side, which has been the focus of this paper, corporatism requires
the existence of authoritative representatives of labour committed to representing
working class interests, able to command organizational loyalty, and structurally
able to pose a convincing threat in order to make sure they are taken seriously. In
Eastern Europe, these conditions are lacking. In response to the communist era,
unions today eschew class ideology and refrain from organizing the private sphere.
The region is marked instead by weak trade unions, with declining support from
the workforce, unable to authoritatively represent class interests, unable to challenge
emerging capital, and so unable to serve as the stabilizing linchpin of an inclusive
neocorporatism.
Actually-existing tripartism is little more than a pseudo-corporatist facade that
has so far done little to resolve the central political issue that neocorporatism in the
West aimed to resolve: namely, how to guarantee labour input in a capitalist economy,
thereby eliciting labour’s acceptance of a system based on the hegemony of capital.
Until it does so, tripartism is only an illusory corporatism, not a real one, and labour
will remain a potential threat to the stability of the new order.
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WFES 1:2 2010
Constitution of the Republic

of Poland as the Foundation
of Democratic Society and State
Joachim Osiński*
Abstract
Following the downfall of communist rule in 1989, most countries in Central and
Eastern Europe promptly adopted new constitutions. In Poland, however, the
constitutional debate consumed eight years. The paper aims at exploring the still
relevant question whether the constitutional process should proceed more vigorously so
that legal foundations of the newly restored democratic state could be laid right after the
systemic change. It is argued that protracting disputes eventually allowed for adopting
a constitution based on a broad consensus, thus contributed to a long-term political
stability of the country.
Introduction
The process of assembling a new constitution and subsequently passing it into law
usually takes place in special circumstances. Seldom such process occurs in comfort
of predictable political and economic environment, sustained by consensus among
political elites and according to thoroughly planned scenario. The latter was the
case of the Constitution of the Republic of Finland of June 11th, 1999 or the Federal
* Department of Public Administration, Warsaw School of Economics.

124 Joachim Osiński
Constitution of the Swiss Confederation of April 18th,1999 (See: Constitution of

Finland of 1999). However, more often than not the constitutional process follows
a curvy path, shaped by socio-political crisis and conflict. Such were the cases of
constitutions adopted in CEE during the era of systemic transformation. Certainly
each case had its specific features not observable in the other countries of the region.
Despite the fact that national parliaments played a crucial part in the legislative
process, in some countries the executive power gained more influence than in the
neighbour states (e.g. the Russian Federation). The length of constitutional process
depended on how smoothly (or not) transformation proceeded. Yet, all the cases in
the region contributed to the global wave of democratization building up. Between
1990 and 1996 total of 69 democratic constitutions were passed throughout the world,
a vast share of which consisted of acts adopted by CEE states surrounding Poland.
Nevertheless, as of 1996 Poland – despite being a pioneer and a leader of
democratic change in the post-communist part of Europe – still did not belong to
the club of the CEE states with new constitutions. Firstly, one may ask of the reasons
behind that dragging debate over the fundamental legislative act. The question itself
is quite trivial and, more importantly, had been repeatedly raised in various context.
What can hereinafter be done is providing a synthetic account of main reasons and
different political motives of major players. Secondly, a question arises whether
such a delay in adopting a new constitution did more help or harm to the act itself
in terms of its content. That question seems of more weight, as the debate over the
need to amend the constitution has become very lively, with not only politicians
but also media commentators and (to a lesser extent) academics being involved1.
Thirdly, a question should be asked how the daily practices of political life relate to
core values and specific regulations carried by the constitution. Before answering that
1With the confl ict rising between the President and the newly appointed Prime-Minister as
well as some of the members of his cabinet after the parliamentary elections of 2007, numerous
comments were being forwarded pointing to the alleged ambiguity of certain provisions of the
Constitution regarding the issue of mutual relations of the two branches of the executive power. The
conflict, however, should rather be seen as a rivalry between two major political parties, seeking such
interpretations of the Constitution as to secure their particularistic interests as much as possible. So,
behind the façade of a constitutional dispute, there has been quite a conventional political struggle
of parties tightly attached to clearly divergent philosophies of power (hence each unwilling and
unable to recognize position of the counterparty) continuing. As the parties involved has not been
capable of ending the stalemate by means of parliamentary debate, they turn to the very foundation
of the national political system in search of arguments supporting their respective viewpoints, being
apparently insensitive to the fact that with such a fierce conflict still unresolved, chances of assembling
a parliamentary majority necessary to amend the Constitution are virtually nonexistent.
Constitution of the Republic of Poland as the Foundation of Democratic Society and State 125
question in detail, I allow myself a short remark that the incongruities observed in
that dimension are more a result of immature democratic political culture in Poland
than defects of the constitutional regulation.
The Political and Procedural Reasons Behind

a Dragging Constitutional Debate
The first political reason stemmed from the agreement reached at the ‘Round Table’
negotiations between the communist government and democratic opposition in
1989, in particular from the part of the agreement concerning elections, which was
to be only partially democratic in case of the lower chamber of parliament (‘Sejm’),
while completely free and entirely democratic in case of the upper chamber – the
Senate (‘Senat’) (See: Stanowisko w sprawie reform politycznych: 7)2. The course
of the pre-election debate clearly indicated that the opposition were willing to
treat the Senate as the sole democratically legitimate institutional form of political
representation at the central government level. After the election such a position
towards the Senate was maintained not only by democratic forces in the political
scene, but also by the vast majority of the public opinion. Thus, it was the Senate (and
definitely not the Sejm), to whom the society was ready to hand a mandate to launch
the work over the future truly democratic constitution.
In practice, however, each chamber of the parliament established a separate
legislative commission to prepare the constitution on December 7th, 1989. Lacking
the relevant legislative procedures, the two commissions not only would not engage
in cooperation, but continued to work virtually independently, which in the end of
the day led to completion of two draft legislations quite distant from each other in
terms of content (Pietrzak: 149). The Sejm voted favourably on its draft legislation on
October 10th, 1991, while the Senate concluded its works on October 24th, 19913.
The draft constitution completed by the Sejm consisted of a preamble followed
by 161 articles divided into 12 chapters (See: Projekty Konstytucyjne 1989–1991 1992:
19–53). Despite certain hopes the draft would be embraced by the parliament in the
2 It was emphasized in the paper that one of the major tasks for the future parliament ‘is a creation
of the new, democratic constitution’.
3The proceedings of the commissions over 1989–1991 period were collected and published in:
Komisja Konstytucyjna. Biuletyn 1990–1991 and in: Prace Komisji Konstytucyjnej Senatu 1990–1991.
next term, numerous constitutional lawyers and vast part of political class openly
spoke of the draft as a result of political compromise, which most likely, due to
rapidly changing political environment would be dropped off the agenda after the
first entirely democratic parliamentary elections of 1991.
On the other hand, the draft assembled by the Senate significantly differed from
the Sejm’s version. It opened with the invocation ‘In the name of the God almighty!’
and consisted of 160 articles divided into 10 chapters (Ibid.: 54–94). Furthermore,
following the adoption of the draft the Senate issued a special proclamation, in
which it clearly stated that the draft would be handed over to the parliament in
the next term4. Regardless of ideological cleavages present in the parliament, there
was a widespread belief that the new constitution would be (and should be) passed
into law on the 200th anniversary of the first Polish constitution (the so-called the
Constitution of May 3rd) adopted in 17915.
Another reason behind the deceleration of the legislative works on a new
constitution stemmed from the fact that multiple political parties crafted their
own drafts of the constitution over the period 1989–1991, and seemed reluctant to
abandon the results of their work in favour of other projects put on the table by
their political competitors. Chronologically, the Democratic Party (Stronnictwo
Demokratyczne, SD) – one of the satellite parties of the communist party during
the authoritarian socialism era – stepped forward with the document entitled ‘The
Theses for the Constitution of Poland’ on January 9th, 1990. The ‘Theses…’ consisted
of a draft preamble followed by 95 theses divided into six chapters (See: Projekty
Konstytucyjne: 95–116). The other satellite party from the communist times – the
United Peasants’ Party (Zjednoczone Stronnictwo Ludowe, ZSL) – soon proceeded
with the project of its own, which was originally published in the party’s official
newspaper ‘The Green Flag’ (Zielony Sztandar) on July 22nd, 1990. That project did not
include a preamble and consisted of 102 divided into 6 chapters (Ibid.: 117–140). The
document contained one quite innovative proposal (in the Article 2) of replacing the
Senate with the Chamber of the Self-government (Izba Samorządowa).
4 Further reading on the issue available in: Prace Komisji Konstytucyjnej Senatu.
5
There were also some voices critical of such approach. In July 1991 J. Zakrzewska wrote: ‘Such
voices could be heard even prior 1989, which indicates that certain fondness of anniversaries is
common, spreading across political divisions. Myself, I have never been an admirer of such solution,
because rushing with anything (except monuments, maybe) only to match anniversaries seems
a doubtful task to me (quit to the contrary of a popular belief, especially in the case of the Constitution
of 3 May). Therefore, I am in a position that the parliament should not be criticized for not having
passed a new constitution on May 3rd, 1991. in: Zakrzewska 1993: 58.
The new parties emerging from the former anti-communist opposition also
did not hesitate to disclose their projects or constitutional theses. For example,
the Centre Alliance (Porozumienie Centrum, PC) completed the document called
‘The Guidelines for the Draft of the Constitution of the Republic of Poland” during
its first congress, which took place on March 2nd and 3rd 19916. The document was
divided into four parts, each regarding one of the democratic powers: the president,
the government, the legislature, and the judiciary. It should be noted that the party
was going to refrain from incorporating the elaborate list of civic liberties, claiming
that ‘an attempt to include the full catalogue of such rights cannot be successful’,
a statement which stirred some controversies at the time (Projekty Konstytucyjne
1989–1991: 145).
The Confederation for Independent Poland (Konfederacja Polski Niepodległej,
KPN) prepared another project (quite original, not only in terms of the content,
but also a language employed). On July 5th, 1991 the KPN leader Leszek Moczulski
handed a copy of the document entitled ‘The Programme for the Third Republic’ to
the President of Poland Lech Wałęsa at the conference called ‘The Constitution for
the Third Republic”. The document contained a draft constitution accompanied by
several other draft legislations7. As for the project of the constitution, it consisted of
124 articles divided in to 14 chapters (Projekty Konstytucyjne 1989–1991:146–176). The
promoters of that project also insisted that until the time the new constitution was
adopted, a pre-war constitution of 1935 should be reinstated first, and then replaced
by the so-called Provisional Constitution8.
Further reason behind the dragging pace of the constitutional process should be
sought for in the very nature of the transformation process taking place in the Central
and Eastern Europe. That process was in fact multi-linear, unpredictable, spontaneous
and with an extremely unstable, even liquid, internal structure. Due to the high
velocity of political life between 1989 and 1991 the Constitutional Commission of the
Sejm devoted most of the time during the total of 56 meetings it held to the matters
6 The authors of the document recruited from politicians and scholars bound with the party:
H. Izdebski, W. Lamentowicz, A. Szcząska, R. Gwiazdowski and P. Wójcik (secretary of the team).
7 The authors of the document were as follows: L. Moczulski, K. Król, D. Wójcik, A. Ostoja-Owsiany,
P. Aszyk, B. Czyż, A. Izdebski, M. Janiszewski, A. Lenkiewicz, Z. Łenyk, A. Mazurkiewicz, W. Pęgiel,
A. Słomka, A. Terlecki and A. They.
8 Aside from the abovementioned projects, there were also number of initiatives undertaken
either by individuals or teams of authors, among which: the project by M. Huchla; the project by the
team led by S. Zawadzki; the project by A. Mycielski and W. Szyszkowski; the project by J. Zakrzewska
and J. Ciemniewski; and the project by J. Lityński.
of new election ordinance for the upcoming parliamentary elections scheduled

for the autumn of 1991, the side-effect of which was neglecting the issue of a new
constitution. The entire parliament was focused on the abundant number of crucial
legislations concerning the most vital issues if economic and social nature. Moreover,
as time went by, it gradually became obvious that the parliament would not be
allowed to serve the entire four-year term, as for the majority of deputies and senators
of the non-communist provenance the fully democratic elections appeared to be the
main priority, even more urgent than adoption of a new constitution (Geremek: 1–2).
Those three reasons combined effectively prevented adoption of a new constitution
between 1989 and 1991. In my opinion, however, it was the belief that the parliament
elected in only partially democratic manner had neither moral nor legal power to vote
on the constitution for a democratic state, which prevailed among the non-communist
politicians, and eventually blocked the constitutional process.
Such belief was based on a quite solid ground but its prevalence resulted not
only in a delay in the constitutional process but also in overlooking a unique chance
for a swift adoption of a new constitution (Chruściak 1997: 12–13). After the initial
consolidation of anti-communist opposition, the decomposition of that political
block would soon begin. New (competitive and often contradictory) concepts
were emerging, new leaders were entering the stage, and new social and economic
challenges, which required immediate action, were materializing. After all, the right
time for adoption of a new constitution passed, and then a new political climate
favourable for the resumption of the constitutional debate needed more than two
years to crystallize. In the turbulent era of transformation two years were certainly
a long period of time.
Pros and Cons of the Dragging Constitutional Process
The first entirely free and democratic parliamentary elections in post-war Poland
took place on October 27th, 1991. In the newly elected parliament, there were
representatives of more than 20 parties present, most of which originated from the
former anti-communist opposition. The number of candidates competing in the
elections was exceptionally high, in particular in metropolitan districts9. Ultimately,
9 For example, in the District No. 1 (the Capital City of Warsaw) there were 17 seats in the Sejm
to win, for which total of 387 candidates of 35 committees competed. (See: Wyniki wyborów do Sejmu
RP 1991).
the elections produced a very fragmented parliament, where the biggest faction –
the Democratic Union (Unia Demokratyczna, UD) – claimed merely 62 seats for
a total of 460. Such an extreme dispersion of deputies among multiple factions would
hamper a coalition-building in the parliament over numerous causes, including
the new constitution. First of all, the new parliament decided to discontinue works
on the drafts completed during the previous term but instead to concentrate on
resolving procedural issues regarding the constitutional process. It was argued that
the former, only partially democratic Sejm, should not in any case dictate the new,
truly democratic, parliament how to proceed over a new constitution.
As the result, procedural matters once again overshadowed the essence of
constitutional process. The parties present in the parliament rushed to formally
submit their projects, beginning with the draft by the Christian National Union
(Zjednoczenie Chrześcijańsko-Narodowe, ZChN) and the jointly prepared draft
by the Democratic Union (Unia Demokratyczna, UD) and the Liberal-Democratic
Congress (Kongres Liberalno-Demokratyczny, KLD). In the following debate over
those drafts, on the one hand there were arguments that the new constitution should
be adopted only by a special majority of 2/3, while on the other hand there were
voices (some of which quite ridiculous) questioning the need of general approval by
the whole nation in a referendum10. All in all, the deputies appeared to be concerned
more with formalities and advertising their own projects as the only appropriate ones
rather than with the primary objective of adopting a viable democratic constitution
for the state.
On March 10th, 1992 the President of Poland submitted a draft legislation
regarding the procedure of constitutional process, previously having objected the
draft legislation on the very same issue prepared by the legislative commission of
the Sejm. Time went by, and the President and the parliamentary majority (both
of the same ‘Solidarity” background) continued to struggle with formal disputes
and ambitious queues, making the adoption of a new constitution a more and more
distant goal. After another straw in the Senate, the Act on Procedures for Preparation
and Adoption of the Constitution of the Republic of Poland was finally adopted on
April 23rd, 1992, and following its signing by the President, was eventually published
in late September (Journal of Laws 1997: 67, item 336). Apparently, enactment of the
Act consumed 10 months since the parliament had been elected.
10 For example, S. Niesiołowski, MEP, strongly opposed the idea of the referendum, and presented
the following argument to support his view: ‘I believe that for at least next few years we should not
bother ourselves with elections or referendums’. (Sprawozdanie Stenograficzne z 5 posiedzenia Sejmu
RP w dniach 3 i 4 stycznia 1992 r. 1992: 15).
One year after the elections the Constitutional Commission of the National
Assembly (both chambers of the parliament), whose existence was stipulated by the
aforementioned Act was established on October 30th, 1992. The parliamentary majority
with the ‘Solidarity” background needed 12 months to prepare organizational and
procedural frames for further proceedings with the constitutional process. According
to the regulations set by Act, for six months since the day the Commission launched
its works, the eligible entities (that is, the President, groups comprising at least 56
members of the National Assembly, and the Constitutional Commission) would
be able to formally submit drafts of the constitution. At the moment, at least part
of the legacy of the parliament serving the previous term was already wasted, and,
considering the legal constraints, the Constitutional Commission could begin to
proceed with works on the drafts submitted as late as in mid-1993, around 18 months
since the elections.
Despite lagging of the process, it should be noted, however, that the debate
over the new constitution appeared more democratic in style than in most of the
neighbour states going through similar experience of political transformation, as
the whole nation, as well as various interest groups and circles of influence became
deeply involved not only at the public discourse level but also at the level of the
Constitutional Commission11. Therefore, the spectrum of collective actors engaged in
the process extended to eventually embrace not only new emerging political parties
but also other groups and organisations constituting the fabric of civil society.
As everything seemed fi nally settled for a successful legislative works, the
parliament was prematurely dissolved by the President’s decision on May 31st, 1993,
after the cabinet of the Prime-minister Hanna Suchocka had been dismissed by the
Sejm in a confidence vote. That event should be seen as a vivid manifestation of the
ongoing dispute between the President and his surrounding (promoting the concept
of semi-presidential political system, bearing some resemblance to political system
of France) and the parliamentary majority of the ‘Solidarity” provenance (opting
for parliamentary-cabinet system), which in the end led to a dramatic turn in the
transformation process. The next parliamentary elections produced a stunning
victory for two post-communist parties: Democratic Left Alliance (Sojusz Lewicy
Demokratycznej, SLD) and the Polish Peasants Party (Polskie Stronnictwo Ludowe,
PSL). The two parties along with a post-Solidarity leftist Labour Union (Unia Pracy,
UP) seemed more willing to seek compromise over the constitution with other
11
That particular feature of the constitutional process in Poland was highlighted by B. Geremek,
asking provocatively in the title of his article: Kto się boi Konstytucji? (1991): 1–2.
(centre and right wing) post-Solidarity parties, than the latter among themselves.
For that reason, aside from the President’s original intentions behind the decision to
dissolve the parliament in the spring of 1993, its outcome proved positive as long as
the constitutional process is concerned.
Facing the constitutional process dragging, major political actors tended to favour
a transitional solution of the so-called Minor (Lesser) Constitution first12. Notably,
other countries of the region did not consider such a solution, which makes such an
arrangement an exclusive characteristic of Polish constitutional process. The idea of
conceiving the Minor (Lesser) Constitution first surfaced in the semi-democratic
Sejm elected in 1989 with two consecutive projects prepared by the government
accompanied by another by the Constitutional Commission of the Sejm (See: Polskie
prawo konstytucyjne: 120). Due to an early ending of that term, none of those three
projects ever advanced to the stage of parliamentary debate. In late January 1992 new
project of the constitutional act regarding relations between legislative and executive
powers was submitted by the Democratic Union. After a lively debate in the Sejm,
the project was adopted on September 1st, 1992. The Senate introduced a number of
amendments to the bill timing to strengthen its own position in the constellation of
power, some of which would later be rejected by the Sejm. On September 17th, 1992
the Sejm finally voted the bill into law, calling it the Constitutional Act on mutual
relations between legislative and executive powers and on the local government
(Journal of Laws 1992). Subsequently, President Wałęsa signed the Act, which came
to force on December 8th, 1992.
The specific regulations of the Minor Constitution created a foundation for
a constitutional consensus between the key centres of power decisive for the course
of changes in the political system of the country for the next few years (See: Polskie
prawo konstytucyjne: 93). However, soon the Minor Constitution proved to bear
numerous flaws and inconsistencies, which inevitably led to disputes over prerogatives
of respective powers and political institutions not only among politicians but also
academic experts in the field. At the political level, the Minor Constitution should
be seen as a compromise between the parliamentary majority and President Wałęsa
12 In the scholarly literature there is a view that the term ‘Minor (Lesser) Constitution’ is in fact
more than juts a portable shortened name for the legislative act, whose full title is long and complicated.
The notion applied to the act indicates its true weight as a provisional and transitional arrangement
essential for the interim period lasting until the ultimate goal of adopting a constitution is attained.
However, the scope of the Minor (Lesser) Constitution was more narrow than it usually occurs in the
case of a fundamental law a constitution is; for instance the Act did not embrace such key issues as
civic rights, liberties and obligations. See: Polskie prawo konstytucyjne: 90–91.
regarding roles and functions of executive and legislative powers. Whereas the
parliamentary majority supported the concept of division of power with the locus
placed in the parliament appointing Prime-ministers and cabinets accompanied
by a president with marginal prerogatives (narrowed mostly to representational
duties), the President favoured the idea of a system, in which the head of state would
be assigned a position of arbiter between a parliament and a cabinet. However, the
string of queries and disputes over interpretation of the Minor Constitution – always
initiated by the President seeking every opportunity to expand his power – which
culminated in early dissolution of the parliament and elections in 1993 suggests that
the head of state (and political circles centred around him) never considered that
compromise entirely satisfactory from their point of view.
The Minor Constitution neither could resolve the political dispute over the
future form of national political system in general, nor provide a ground for
designing particular solutions. The permanent conflict between the parliament
and the president seemed to have convinced a number of post-Solidarity politicians
(mostly associated with the Democratic Union, which later transformed into the
Freedom Union /Unia Wolności, UW/) that the future constitution should be backed
by a broad political spectrum, including the post-communist parties, in order to
effectively neutralize expansive rhetoric and actions of the ‘presidential camp’.
Furthermore, the lesson of ‘cooperation between the parliament and the president’
thus far experienced apparently taught parliamentary parties of a need to devote
particular attention to the issue of the content of the future constitution with a view
of avoiding the ambiguity of the Minor Constitution and prevent a torment of
ongoing reinterpretation of the act. Achievement of that goal required reinforcement
of the expertise behind the constitutional commission. Stronger expertise could
be provided through incorporation in the constitutional process the circles in the
academia either connected to or simply associated with the communist regime, which
to that point had been consistently denied any opportunity to become involved. Those
experiences, however, could fully be utilized by the parliament of the next term13.
On September 19th, 1993 the second fully free and democratic parliamentary
elections were held. As a result, the political scene were completely reshuffled.
Two post-communist parties emerged as the leading actors of the new Sejm: the
13
Over the period of six months after establishment of the Constitutional Commission (September
th
30 , 1992), total of seven projects of constitution were delivered to that body by various entities entitled
to doing so. The Commission managed to meet for a few sessions, during which four of the submitted
projects were presented and discussed. The works terminated prematurely following the President’s
decision to dissolve the parliament as of May 31st, 1993.
Democratic Left Alliance (Sojusz Lewicy Demokratycznej, SLD) won 171 seats in
the lower chamber, while the Polish Peasants Party (Polskie Stronnictwo Ludowe,
PSL) claimed 132 seats. Those two parties along with a post-Solidarity Labour Union
(Unia Pracy, UP), whose faction consisted of 41 deputies, received altogether 344 seats
for a total of 460 in the Sejm. Out of the remaining post-Solidarity parties only the
Democratic Union (Unia Demokratyczna, UD) scored a moderate success claiming
74 seats in the Sejm (Wyniki wyborów do Sejmu RP 1993). In the Senate the shares
slightly different, however, the two key parties managed to secure a comfortable
majority in the chamber (where total number of seats amounted to 110). SLD won
37 seats, while PSL had 36, NSZZ ‘Solidarność’ – 9, UD – 4 and, finally UP – 2 seats
respectively (Wyniki wyborów do Senatu RP, 19 września 1993 r.).
Emergence of the new parliamentary constellation opened another chapter in
the long-lasting history of the constitutional process. On October 22nd, 1993 the
Sejm appointed 46 deputies to the Constitutional Commission, and on the following
day the Senate nominated 10 senators to participate in the works of that body. On
January 18th, 1994 the Constitutional Commission adopted its rules of conduct,
among which a principle of ‘opening’ its proceeding to a wider spectrum of actors was
included. In detail, that principle aimed to involve in the works of the Commission
also the non-parliamentary political parties, trade unions, nation-wide social and
professional organisations and associations, and representations of churches and
religious associations (Chruściak 1997: 23).
The following non-parliamentary political parties received invitations to
participate in the works in the Commission: the Liberal-Democratic Congress
(Kongres Liberalno-Demokratyczny, KLD), Union of Real Politics (Unia Polityki
Realnej, UPR), the ‘X’ Party (Partia X), Polish Peasants Party – People’s Union
(Polskie Stronnictwo Ludowe – Porozumienie Ludowe, PSL-PL), the Centre
Alliance (Porozumienie Centrum, PC), the Movement for the Republic (Ruch dla
Rzeczypospolitej, RdR), and, finally, the Christian National Union (Zjednoczenie
Chrześcijańsko-Narodowe, ZChN). Furthermore, 12 trade unions and social and
professional organisations and associations were invited, as well as 11 churches and
religious associations. While some of the ‘guest participants’ in the Commission
frequently took part in the proceedings, some other did not seem very interested.
The representatives of the President, the Council of Ministers, and the Constitutional
Tribunal participated in the works on regular basis. The Commission further dealt
with the projects ‘inherited’ from the parliament of the previous term, that is: the
project completed by the anteceding Constitutional Commission, joint project of the
PSL and UP deputies and senators, the project by the KPN, and, finally, the project
by PC14. All those procedural features were not present at the earlier stages of the
constitutional process. Furthermore, they should also be described as innovative in
the Central and Eastern Europe scale.
On April 22nd, 1994, the Sejm adopted the new constitutional act amending
the Minor Constitution (the constitutional act of 1992). The amendments triggered
a new conflict between the Sejm and the President, who stepped forward with his
own constitutional act draft. A very significant feature of that draft was a clause
stipulating that also a group of at least 100,000 citizens was eligible to submit
constitutional projects (so-called ‘citizens’ projects’). Another innovative regulation
proposed by the President determined that in case of new constitution being adopted
by the parliament but subsequently failing to receive the nation’s approval in the
constitutional referendum, parliament was to be involuntarily (by virtue of law)
dissolved. The Sejm rejected the proposals by the President, whose reaction was
to withhold not only his project from the parliament but also his representatives
from the Constitutional Commission. However, the parliament did not succumb
to the pressure exercised by the head of state, and the Constitutional Commission
continued to work, leaving the door open for each new project meeting the formal
conditions set for submission. On the very last day (September 5th, 1994, as stated by
law) yet another project was delivered to the parliament by NSZZ ‘Solidarność’, which
managed to gather nearly one million signatures under their project, thus with such
an enormous support drawn from the public became able to submit it as the ‘citizens’
project’15.
By the end of 1994 the Permanent Experts body of the Constitutional Commission
completed the ‘Multi-dimensional consolidated project of the Constitution of the
14
On May 23rd, 1994, the leader of the PC in an official statement delivered to the Chairman
of the Commission informed that due to the decision taken at the III Congress of the party, the
project submitted by the PC during the previous terms of the parliament was being withdrawn.
The Commission accepted the decision, and subsequently refrained from any further proceedings
involving that particular project. Other post-Solidarity parties, which (like the PC) found themselves
driven out of the parliament as the result of 1993 elections, acted in a similar manner hoping to at least
prevent the new parliament (dominated by the left) from adopting the constitution during the current
term. The non-parliamentary opposition continued to denounce the parliament as having no sufficient
mandate to proceed on the constitution. The sole exception among the post-Solidarity parties were the
UD, which adhered to the idea of quickly completing the constitutional process, and even presented
its own project of a constitution on May 9th, 1994.
15
The Project presented by the Solidarity was authored by the Civic Constitutional Commission,
which consisted of 22 members delegated by the trade union and political parties of the centre-right.
M. Krzaklewski, the head of the ‘Solidarity’, served as the chair of the Commission.
Republic of Poland’, which, after a few more weeks of editorial work by the Editing
Sub-commission and minor adjustments, was named the ‘Consolidated project
of the Constitution of the Republic of Poland (in a multidimensional form)’, and
subsequently taken over by the Constitutional Commission as a basis for future
works. The process, however, encountered numerous organizational obstacles, major
of which seemed a notorious lack of quorum, set at the 50% level of total number
of Commission’s members. With no quorum, voting would become pointless, as
no legitimate decision could be taken in such circumstance. Arguably, the lack of
quorum stemmed from incoherent attitudes observable among the members of
the Commission, which seemed to have split into three separate circles. The first
circle could be described as a core of the commission and consisted of several MPs
and senators, who alongside the experts carried the main burden of work. The
second circle contained the members duly participating in the works but nevertheless
remaining passive. The third circle consisted of MPs and senators occasionally making
appearance in the sessions held by the Commission (Chruściak 1997: 91). Last but not
least, there were frequent changes in the position of the Chair of the Commission
held by three different politicians in a row: A. Kwaśniewski, W. Cimoszewicz, and
finally M. Mazurkiewicz.
At the end of the day, the Commission successfully overcame all difficulties
and after some 18 months of continuous works on June 19th, 1996 finished reviewing
the project and gave its seal of approval. That period came to be regarded as
a crucial part of the constitutional process (Ibid.: 89), because the consolidated
project the Commission produced appeared consensual (but not beyond the point
of being internally contradictory) as a result of incorporating the concepts derived
from all seven projects delivered to the Commission by eligible social actors. The
Commission then handled its finished project to the experts whose final comments
and recommendations were eventually mostly recognized as valid the Editing
Sub-commission. Having made those adjustments, the Sub-commission published
the updated version of the project on August 27th, 1996. From September 17th,1996
on, the Constitutional Commission resumed its works, proceeding over the text
delivered by the Sub-commission. At that stage of the Commission’s works one issue
in particular seemed to be stirring the most serious controversies, as the members of
the Commission struggle to reach the agreement over the shape of the preamble. The
question was the following: should the preamble include an invocation to God or not?
Once again, the compromise was achieved. On December 11th,1996, the Commission
voted for a modified version of the preamble as proposed by T. Mazowiecki, in which
the opening invocation to God was omitted and the following sentence was included
in the further part the preamble: ‘aware of the responsibility before God or our own
conscience, we establish the Constitution of the Republic of Poland’.
With the Constitutional Commission fi nalizing its proceedings with the
consolidated project, the National Assembly would commence the second reading
if the final report presented by the Commission. On February 24th, 1997 the speech
delivered by the Chairman of the Commission to the two chambers of the parliament
present jointly officially marked the beginning of the next stage in the constitutional
process. Subsequently, delegates of factions spoke on the subject. Whereas the major
parties expressed its support for the project either in its entirety (SLD, PSL and UW)
or with minor critical remarks (UP), the smaller factions – such as Non-party Block
for the Support of Reforms (Bezpartyjny Blok Wspierania Reform BBWR), KPN, the
Right Alliance (Porozumienie Prawicy) or the senate faction of NSZZ ‘Solidarność’
presented a large number of comments regarding specific regulations and suggested
the criticized clauses be reformulated.
Eventually, after a stormy debate a vote over the Constitution as a whole was
held on March 22nd, 1997. Out of 497 members of the National Assembly voting, 461
supported the Constitution, which meant that the act received more than necessary
backing (a required majority in that particular case was 2/3 members of the National
Assembly, which translated to 332 persons voting).
As a result, the Constitution successfully passed the test in the parliament and
should consequently be handed over to the President, who in turn could propose his
own amendments within 60 days after receiving the act from the National Assembly.
President Aleksander Kwaśniewski submitted a series of amendments to 41 clauses
of the Constitution on March 24th, 1997.
At the next stage of the constitutional process, the Constitutional Commission
would prepare a new report regarding the proposed presidential amendments, which
then was to be presented to the National Assembly in the third reading. Afterwards
the Assembly would vote on each amendment. Gradually most of the amendments
proposed by the President were accepted by the parliament. Finally the amended
act became a subject of vote by the National Assembly. Out of 497 persons present,
451 supported the Constitution, while 40 were against, and 6 refrained from voting.
A required majority was once aging 2/3 members of the National Assembly, which
translated to 332 persons voting. Thus the Constitution was finally adopted by the
National Assembly. The critical phase of constitutional process launched eight years
earlier was completed.
Nevertheless, the journey would not have been finished, if the very final step in
the constitutional process had not be taken, namely the national referendum over the
newly adopted constitution16. The citizens’ approval was a necessary condition to be

fulfilled. Ironically, the country with the second longest constitutional tradition in
Europe (tracing back to 1791), which pioneered the democratic change in Central and
Eastern Europe was the last one in the whole region to introduce a genuine democratic
constitution after the downfall of the communism. Fortunately, the new constitution
matched the highest standards of the modern democratic world, thus provided a solid
foundation for development of viable, yet citizen-friendly democratic state.
The Scope of Constitution of Poland:

Theory and Practice
More than a decade has passed since the Constitution was enacted, thus it is
hardly surprising that not only politicians but also academic researchers have been
increasingly keen on assessing the act’s content and efficiency. It is not unexpected
either that views of the politicians’ (and of some journalists’ as well) on the
Constitution tend to be far more emotional and less neutral than those expressed
by the experts. Almost routinely, after each parliamentary elections subsequent
cohorts of politicians were voicing the need to amend the constitution in one way
or another. Such a specific ‘constitutiogenic’ climate remained especially strong
in the beginning of each term (reaching its peak in 2005) but as time went by it
was gradually fading. It should be emphasized that after 1997 such an objective
never seemed attainable with the parliament remaining divided so deeply that the
constitutional majority could be constructed only in one, very specific case, that
is introduction of the European arrest warrant as a part of acquis communataire.
Following the 2005 presidential elections new wave of postulates for amending the
constitution emerged and continued to climb up after 2007 parliamentary elections,
which produced a ‘cohabitation Polish-style’17, a new phenomenon in the domestic
16 Having reviewed total of 433 formal protests, on July 15th, 1997 the Supreme Court issued
a resolution recognizing the constitutional referendum of May 25th, 1997 as lawful and binding.
President A. Kwaśniewski signed the Constitution on July 16th, 1997. On the very same day an edition
of the Journal of Laws was published and three months later (October 17th, 1997) the Constitution
of the Republic of Poland of April 2nd, 1997 finally came to force, replacing the constitutional laws
previously binding.
17 The unique form of cohabitation in Poland is shaped by the ongoing confl ict between the
parties involved, unlike in other European countries (e.g. Finland, France or Portugal), where periods
political arena. Interestingly, voices supporting the idea of changing the constitution
could be heard not only from the ruling parties but also from the opposition, which
also has been a quite a new pattern in behaviour of the political class regarding the
foundations of the political system. Obviously, the aims pursued by different sides of
the scene are divergent: while the presidential camp (his former political party being
the major opposition party in the parliament included) is attached to the concept of
expanding the prerogatives of the head of state, the current ruling coalition would
rather see the scope of competences enjoyed by the Prime Minister broadened. For
that reason, chances for building up a parliamentary majority to alter the constitution
before 2010 (when the next presidential elections are scheduled) in one way or the
other are virtually non-existent.
As the odds of any major changes in the constitution being introduced prior to the
upcoming presidential elections (provided the candidate of the ruling coalition wins,
effectively ending the cohabitation, otherwise the stalemate is likely to continue) are
slim, it is worthwhile to ask the following question: is the constitution still adequate
to the political environment, which has certainly evolved profoundly since the
moment the act came to force? Let us not forget that after 1997 two momentous events
occurred: in 1999 Poland joined NATO, and in 2004 was admitted to EU. In addition,
a series of important domestic changes also took place. The answer to the question
is short and concise: no, at the moment any major modifications of the constitution
are not necessary, because its main provisions still remain functional to the demands
of the environment, not only in political but also social and economic dimensions.
However, if the constitution still seems sufficient to the needs of the present
world, one may inquire about the reasons behind the ongoing disputes over its
content (especially such touchy subjects as mutual relations between the President
ant the Prime Minister) tearing the political class apart. Sadly, the major source of
tensions appears to be a result of insufficient political culture of the elites. Unlike the
of cohabitation were marked by pragmatic and consensual cooperation of the heads of state and
parliamentary majority led by prime-ministers. Provided a cooperative approach of the two sides,
even thought conflicts appear from time to time, they are not destructive, mostly because heads of
state elected in popular vote tend to identify themselves more closely with the entire society and
less with their political circles. In addition, the form of Polish cohabitation has been affected by the
fact that prior to 2007 parliamentary elections two major offices in the country were held by twin
brothers, and following the defeat of the ruling collation in 2007 and subsequent rotation in the office
of the Prime-Minister, the President ‘assumed” the position his brother, the former prime-minister,
in the political rivalry. As a result the cohabitation in Poland evolved into a specific form that could
possibly be described with a notion of ‘management by conflicts” (created in the fields where spheres
of influence of the President ad the Prime-Minister cross).
political culture of mature democracies in the West, national political culture lacks in
pragmatism and willingness to seek consensus. Instead, Polish political culture seems
to retain uncompromising rivalry and ideological bias as its dominant components.
Actually it is not a difficult task to prove that point, because there are numerous
constitutions across democratic world, which by far are not as detailed and explicit
in its content as their counterpart in Poland, and yet due to the higher standards
of political culture observed by the elites in their everyday conduct, no disputes as
depreciative and shameful as those arising in Poland in recent years happen.
With some elementary forms of mature political culture absent, a dubious practice
of reinterpreting certain provisions of the constitution by parties and persons holding
power in line with their particularistic interests is not uncommon. Unfortunately, it
is not feasible to design any regulations to serve as ‘safety valves’ for the constitution
simply because no lawmaker will ever be able to correctly anticipate each and every
political situation in course of democratic life to which a specific, effective and
undisputable solution can be applied. The most eminent constitutional academics
have ridiculed as utopian the idea of responding to each new (that is: explicitly
not accounted for by the constitution) situation with a detailed regulation to be
incorporated to the constitution18.
It may also be argued that it is not the major function of the constitution to
provide solutions for mediation and resolution of political (and ideological) disputes
among parties. No constitution can be designed to prevent political and ideological
conflicts or to effectively appease all antagonisms and tensions among political actors.
After all, the traffic law cannot completely eliminate road accidents and quarrels
among the drivers either. What matters most seems to be the culture of driving in
case of roads, and, analogically, political culture in public sphere. So in the end we
come to the same answer as the one given initially the question: is the constitution
still adequate?
18 ‘For instance, the Constitution does not provide an answer to the question who should assume
the duties of the head of state in case, when a president as well as the chairs of the two chambers of
parliament fall prey to a deadly disease at the same time. Furthermore, one will find no provision in
the Constitution regarding a situation of the Constitutional Tribunal going on strike indefinitely.
Moreover, what a body will the president preside over if the members of the Council of Ministers make
no appearance in the meeting of the Cabinet Council’ (Winczorek 2008).
Conclusions
It might seem like a paradox but at the end of the day a dragging pace of the
constitutional debate in Poland positively contributed to the quality of the final
product. Certainly, one may speculate whether adoption of a constitution by
a constituency elected especially and exclusively for such a purpose would have
been a better solution. There are some noteworthy arguments at hand to support
such a thesis. First and foremost, had the constituency been in place working solely
on the constitution, then the parliament could have had focused on daily legislative
process essential in the success of the socio-economic transformation. Moreover,
constituency could have acquired a much more professional and less ideological
profi le than the parliament. All in all one might assume that the constitution
would have likely been adopted sooner, head a constituency been created. However,
accelerating the constitutional process might have proved a short-term gain achieved
at the long-term expense of quality, integrity and stability of the constitution being
carefully built over a lengthy period of time. There is a plenty of real-life evidence
from other countries in the region (like Croatia, the Czech Republic, Hungary, Latvia,
Romania or Slovakia) that rushing the constitutional process usually resulted in
constitutions which soon required numerous amendments. So one may claim that
Polish parliament did not misuse a long time the constitutional process consumed
and learned some valuable lessons offered by the rich constitutionalist tradition
of whole Europe, other states on the region, and finally, domestic experience as
well. Putting those lessons in constitutional practice allowed for preparation of the
constitution that is not considerably flawed by provisions which are not viable, hence
replaceable. The advantages of the Polish constitution outlined above also prove that
despite multiple allegations towards the act depicting it as an ultimate effect of the
supposed ‘betrayal of the elites’ committed during the ‘Roundtable negotiations’ in
1989 and bearing a stigma of the communist past (Winczorek 1997: 16–17), it really
features innovative and feasible provisions which are likely to effectively serve the
state at present and in the future.
The curvy road that the national politics followed in the 1990s and early 2000s
eventually led to establishment of a constitution which proved solid and not to be
easily affected by ongoing swings in political climate. As successive elections at the
national level, both parliamentary and presidential, were perpetuating a constant
rotation in power and encouraging a string of politicians to boldly announce
inevitability of amending the constitution, it survived in a virtually untouched shape.

Therefore, it seems that the major reason for such durability of Polish constitution
should be sought in its very content19.
References
Chruściak, R. (1997), Przygotowanie Konstytucji Rzeczypospolitej Polskiej z dnia 2 kwietnia

1997 r.: przebieg prac parlamentarnych. Warszawa: Elipsa.
Geremek, B. (1991), ‘Kto się boi Konstytucji?’. Tygodnik Powszechny 22.
Journal of Laws (1992) 84, item 426.
Kallas, M. (ed.), (1992), Projekty Konstytucyjne 1989–1991. Warszawa: Wyd. Sejmowe.
Komisja Konstytucyjna. Biuletyn, 1990–1991, I–XLI. Warszawa: Kancelaria Sejmu Biuro
Prasowe.
Konstytucja Finlandii z 1999 roku (2003). Transl. and foreword by J. Osiński. Warszawa: Wyd.
Sejmowe.
Konstytucja Szwajcarii (2000). Transl. and foreword by Z. Czeszejko-Sochacki. Warszawa:
Wyd. Sejmowe.
Pietrzak, J. (1995), ‘Problemy konstytucyjne w programie i działaniu Obywatelskiego Klubu
Parlamentarnego’, Przegląd Sejmowy 3(11).
‘Podstawowe zagadnienia Konstytucji RP 1997’. Państwo i Prawo 11–12.
Politické systémy Slovenskej Republiky a Pol`skej Republiky (1999). Bratislava: Ekonomická
Univerzita.
Prace Komisji Konstytucyjnej Senatu, 1990–1991, 1–5. Poznań–Warszawa.
Skrzydło, W. (ed.) (1997), Polskie prawo konstytucyjne. Lublin: Morpol.
‘Stanowisko w sprawie reform polityczny’, in: Porozumienia Okrągłego Stołu, Warszawa
6 luty–5 kwietnia 1989 r. (1989). Olsztyn: Wyd. NSZZ Solidarność Regionu
Warmińsko-Mazurskiego.
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Winczorek, P. (1997), ‘Uwarunkowania prac nad nową Konstytucją Rzeczypospolitej
Polskiej’, Państwo i Prawo 11–12.
19 There is bulk of scholarly publications supporting that thesis (e.g. Podstawowe zagadnienia
Konstytucji RP 1997). Furthermore, similar opinions have been expressed by constitutional experts
from other states of the Central and Eastern Europe (e.g. the Czech Republic or Slovakia), who are often
critical of constitutions of their own countries. See: Politické systémy Slovenskej Republiky a Pol`skej
Republiky 1999: 7–15.
Winczorek, P. (2008), ‘Konstytucja nie zastąpi dobrych obyczajów’. Rzeczpospolita, February

27.
Wyniki wyborów do Sejmu RP, 27 października 1991 r. I and II (1991). Warszawa: Państwowa
Komisja Wyborcza.
Wyniki wyborów do Sejmu RP, 19 września 1993 r., I and II (1993). Warszawa: Państwowa
Komisja Wyborcza.
Wyniki wyborów do Senatu RP, 19 września 1993 r. (1993). Warszawa: Państwowa Komisja
Wyborcza.
Zakrzewska, J. (1993), Spór o Konstytucję. Warszawa: Wyd. Sejmowe.
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Martin, A., Ross, G. (eds.) (1999). The Brave New World of European Labour: European Trade
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ISSN 2081- 9633

Warsaw Forum of Economic Sociology

WFES Warsaw Forum

Volume 1 Number 1 January 2010 Pages 1 – 560

Warsaw School of Economics

Warsaw School of Economics

WFES_nr2.indd 1 25-10-10 0:28:41

WFES_str_2-3_nr2.inx 2 25-10-10 0:33:39

Volume 1 Number 2 (2) Autumn 2010

Warsaw School of Economics

WFES_str_2-3_nr2.inx 3 25-10-10 0:33:39

Warsaw School of Economics – Publishing

Juliusz Gardawski, Guglielmo Meardi

Instructions for authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

Ecomomics as an Empirical Science

1. Economics – the Science of Economic Management

* Department of Economics II, Warsaw School of Economics.

Picture 1. Place of economics among other sciences

2. The Method of Economics

Picture 2. How the economic knowledge is made

The economists’ method involves several subsequent actions. They are:

Observation is a deliberate act of noting and recording something. An economist

3. The Language of Economic Theory

4. Why is it so Bad, when it’s so Well?

achievements as landing on the Moon, splitting the atom or heart transplant. In

II. Peculiarities of Economics

1. Limited Possibility of Experimenting

2. Uncertainty and Generality of Forecasts

Theories formulated by economists usually refer to specifically defined situations.

The Effect of Changeability of Circumstances of Economic Management

6 6 According to the Duhem–Quine thesis no theory can be exploded by a one-off experiment.

To sum up: the changeability of circumstances of economic management resulting

It is usually an especially important problem in economics because of the complexity of situations

Picture 3. Solow’s model of economic growth

For instance, a conclusion of the neoclassical model of growth is the thesis of

3. The Impact of Research and Publication

behaviour of subjects in an economy by interviewing all of them according to the

4. Economics and Human Interests

In the course of economic management the interests of groups and individuals,

The knowledge provided by economics has a strong impact on people’s potential to

III. On the Potential for Progres in Economics

I don’t believe that the presented above peculiarities of economics as an empirical

1. Experimental Economics and Observation

Experimental Economics Development

Observation Instead of Experiment?

2. Results of Research and Their Publication Can be Predicted

For Less Uncertainty and More Accuracy of Forecasts

The Role of Interests

4. On the Progress in Economics

Thirdly, the strong dependence of the possibility of realisation of interests (both

informally: to organize our necessarily incomplete perceptions about the economy,

Hausman, D. (ed.) (1994), The Philosophy of Economics: An Anthology, Cambridge: Cambridge

Sugden, R. (2005), ‘Introduction. Experiment, Theory, World: A Symposium on the Role of

Slight Crisis of Mainstream

It seems to me, although it is my subjective opinion – that today’s economics is

* Department of Applied and Theoretical Economics, Warsaw School of Economics.

There is a problem of risk related to cooperation. Let us go back for a moment to

Do we Need New Methodology

The questions whether methodology employed by mainstream macroeconomics is

The mainstream academic economic theory seems to rest on two fundamental

Undoubtedly, this way of looking at macroeconomic phenomena has played

example of the production of public goods. Public goods are characterised by

Analysis of the impact of policies on the economy based on the Representative