The Ideological Determinants of Liberal Economic Reform: The Case of Privatization

Abstract

The empirical literature on mass privatization in the postcommunist context emphasizes the preferences and power of interest groups in order to account for the design of privatization. This approach has been consistent with mainstream theories of property rights formation that focus on the self-interested, rationally calculated pursuit of wealth and/or power as the motivation behind the development of new ownership arrangements. Absent from these theories, however, are the ideological and cognitive components in the creation of property rights systems. This lacuna is extremely problematic when considering the postcommunist privatization experience in which specific ideologies—such as anticommunism, liberalism, pro- or anti-Westernism, and nationalism—have profoundly influenced the particular form that new property institutions have taken. This article explores how ideology interacts with the distribution of power and the formation of material interests in society. After considering the shortcomings of strictly material-based theories of property regime change, the article suggests four mechanisms by which ideology determines the design and implementation of privatization programs in postcommunist countries.