Presentation in the Public Interest Law Speaker Series at Washington University School of Law on October 13, 1999; published in Washington University Journal of Law & Policy, vol. 4, 2000, p. 23

Bottlenecks in the transformation of Eastern Europe

Prof. Vojtech Cepl

We are now past the tenth anniversary of the 1989 revolutions in Central and Eastern Europe, so you might ask first why I am still talking about the transformation. The reason is simple: we are still in the midst of it and in some respects the pendulum is swinging back. That which has been done has in many cases been done imperfectly because the nature and the needs of the transformation were poorly understood. While political institutions could be reformed relatively quickly (after all, for them we have models to follow), that effort did not result in the transformation of the political culture, and there is now a tendency to feel nostalgia for the old days, which is reflected in a renewed growth in popularity of the former communist parties. The economic systems were reformed to a certain degree, but, as I shall explain later, there are inherent obstacles to transforming a backward economy, and these barriers are showing up now. In addition, the legal systems underwent significant modifications, but still they do not function properly to meet the needs, for example, of a market economy.

The transformation has not been completed in any case because the mere reform or change of the political, economic, and legal systems does not suffice for a genuine transformation. I do not wish to go into specifics about these reforms; rather, I would like to focus on a neglected and, in my view, most crucial, albeit elusive, aspect of the transformation. This is the transformation of the normative order, which is founded on the value order. My discussion of it will center primarily in its relation to the legal order. I want to emphasize something that is sometimes not entirely understood in our country: the legal order involves a great deal more than legislation itself (that is, legal directives issued by state authority). One essential aspect of its proper functioning is represented by the extra-legal normative systems, which, in contrast to legislation, originate from the opposite direction--from the people. These normative systems are often the product of an implicit and voluntary agreement, sometimes the natural and spontaneous generation of rules of human conduct. It is absolutely essential to bear in mind that, for the official legal system to function properly, it should be in harmony with society's informal normative order.

Perhaps my point can best be illustrated by a striking example. I will compare the transformation in two countries--the Czech Republic and the former East Germany, or DDR. Prior to the 1989 revolutions, both countries were in a relatively similar situation as far as their economic, political, and legal systems. Nonetheless, it was generally considered that East Germany would succeed much better in the transformation since it was to be incorporated into West Germany, a fully operating western country with the largest and strongest economy in Europe. East Germany would not be required on its own to transform its economic, political, and legal systems, as everything was already prepared, and it received a colossal amount and quality of assistance in its transition. For example, as far as the economic transformation was concerned, in one year approximately 140 billion West German marks were spent on reviving the East, in sharp contrast to the approximately 4 billion which the Czech Republic received from abroad.

As far as the legal order was concerned, East Germany was already more accustomed to the law to be applied in the new circumstances. East Germany essentially acceded to the West Germany legal order, and all that was required was to begin applying the already existing law, which had gone through many years of fine tuning in the West. Moreover, the DDR had far more civil law continuity with the pre-communist system than was the case in the CSSR: The basic structure of the BGB (Burgerliches Gesetzbuch) remained valid throughout the communist era. This is in sharp contrast to the CSSR, which put into practice such poisonous ideas as the separation of commercial law and family law from civil law or, even worse, the 1964 Czechoslovak Civil Code's classification of civil law relations into three groups according to the configuration of subjects: (1) between two citizens; (2) between a citizen and a state organ; and (3) between state organs.

The West Germans also tremendously assisted the transformation of the East German legal order by replacing its legal personnel. From the West came armies of fresh, well-educated, hard-working, ambitious, and determined lawyers and judges, all fluent in the language and trained in the legal system, something other post-communist countries could only dream about. So, for the most important positions in terms of instilling the legal order--judges, law professors, and other lawyers--the East Germans were able to sweep away the old, corrupted, and compromised legal personnel whose ability and training were suspect to begin with, and whose loyalty to the new regime could never be fully relied upon. All or most of them were replaced with fully trained, competent, uncompromised, and trustworthy personnel, who in any case knew the German legal system better than the persons they replaced. With these and many other factors in mind, one could not help but reach the conclusion that the transition in East Germany should have been smooth, quick, problem free, and highly successful.

Well, so much for predictions. Paradoxically, despite all the advantages the East Germans enjoyed, the legal system did not function properly there either. Their transition did not fare markedly better than ours, as one would have expected due to their better position.

The situation in the Czech Republic/Czechoslovakia was entirely different regarding the transformation of the legal system. The true inner political struggle was waged between those on the left who were strong advocates of legal continuity (some of whom I view as crypto-communists), and on the right, the ruling government coalition led by such economists who shared a thinly disguised but deep contempt for law. When the debate is played out between these two camps, it is little wonder that reform of the legal system has been a great bottleneck of the transformation. Within both camps, the idea prevails (and is enthusiastically supported even by the former communists) that reform of, for example, commercial law involves no special difficulty or obstacle--all that is needed is to learn managerial skills and technical rules about how to run businesses, and everything will be all right. In view of what I have said about the normative order, this conception is hopelessly flawed. For businesses to function in conformity with western models, first they have to learn the basic principles: not to steal (respect others' property); not to envy (concepts of fair play and respect for your business partner); not to lie and cheat (keep promises, etc.).

Why is it that the transformation of the German legal order has been rockier than expected? To answer this question, one must dig a bit deeper into legal theory and consider the different aspects of the legal order that I already mentioned. In my view, an answer can be found in part by considering three approaches to the concept of law.

The first and most rudimentary is what I shall call linguistic formalism (sometimes called analytical or conceptual jurisprudence), a dogmatic approach which deals only with law in books and on paper. In this model, law is limited to that which is defined in statutes and regulations (official state law, as I mentioned above) and is interpreted according to strict linguistic criteria--what the actual words mean, to the exclusion of consideration about the purposes for which the law was adopted.

The second is a sociological approach (sometimes referred to as legal realism), which attempts through observation to describe actual behavior of legal subjects. It considers real relations in life (not on paper)--rather than analyzing legal relations and institutions in the abstract, it investigates how law is enforced, how legal norms are implemented in practice.

The third approach is a more psychological approach, which concerns itself not just with texts or the conduct of state officials, but primarily with legal consciousness, that is, how law penetrates into the hearts and minds of the people. It considers how knowledge about law spreads, how it is learned, how it is internally accepted by people. In my view, the lack of success of the German legal system to take hold in the East is due to the fact that it remains in conflict with the informal normative system in the East. People there still do not accept the new legal order. On the contrary, in many ways they view it as imposed upon them against their will. In order for a legal system to function, the state must be able to rely on the fact that people will comply voluntarily with the rules in the vast majority of cases. This, in turn, underlies the importance of achieving harmony between informal normative systems (morality) and law, which can only occur, if at all, if the state actually practices what it preaches (a problem which I shall consider further below).

If one understands that need for harmony, it will be seen how crucial this third model is. We should focus more on how changes in legal consciousness occur. This transformation is still underway because, when we are dealing with the psyche of the people, it is a marathon and needs a great deal of time. First and foremost, it is vital to teach the people that the law is a good thing and should be learned. This approach emphasizes the importance of a positive environment to motivate people to accept the law as part of their culture.

This very lack of acceptance, indeed a hatred of law, has been what we have inherited from the communist regime. It has been the colossal mistake of our social engineers, that they have attempted to resolve all the problems of society by market engineering and privatization--that is, easy technical rules. You can substitute the informal normative systems partially by legislation, but it is too expensive, too demanding administratively, too awkward, and too labored.

Therefore, I would like to concentrate on how the rules of human conduct are learned and spread and on how people are motivated to obey them. In thinking about this, we must keep in mind that there are two aspects of legal consciousness: (1) sheer knowledge of rules and (2) positive internal attitudes to them, that is, the inner acceptance and agreement with them. What are the factors that are helpful for learning of the rules (the first mentioned aspect) and for the spread of their acceptance (positive attitude)? There are several different avenues.

First, it is the government that must give the crucial signal. It is necessary for the state to act as a role model in the process of transformation. Generally, people do not learn about the law from reading statutes or law books, they learn indirectly by decisions of state authorities. The law will be judged positively or negatively in accordance with how the state actually acts. There is no more important factor for the people's attitude toward the legal order than the attitude which the state takes toward it. If the state acts cynically and hypocritically by solemnly declaring the rules and then disregarding them in practice (typical of totalitarian regimes), then this signals to the people that the legal order is meant to bind them while leaving the state free to act as it wishes. It is for this reason, in the case of the Czech state, that after the revolution the most important signals from the state were those consisting in decommunization, lustration, and restitution.

The state decommunized by adopting the Act on the Lawlessness of the Communist Regime, which both condemned the communist regime as criminal and illegitimate and made clear that those who committed crimes on behalf of the state are still subject to punishment. Lustration ensured that unreliable people such as former secret police informers cannot hold sensitive state offices. Restitution involves the immense and complicated process of returning to the people the property that was stolen by the communist regime. By these means, the state makes a sincere attempt openly to declare that its behavior was wrong and to a certain extent to correct the wrongs it committed. Although the implementation of this legislation was imperfect, it was an important signal to the society which influenced the development of basic societal values.

Contrary to the experiences under socialist governments, democratic governments must not create a privileged class of those loyal to the regime. Rather, everyone must be treated equally, thereby embodying the concept of equal protection in government's dealings with its citizens. This means, for instance, that people who hold high positions in society are not to be given immunity against application of the law.

The second avenue for spreading the normative order is what are called civic associations. I will define them as groupings that occupy the social space between the family and the state. This is the milieu, the fertile soil, for the growth and development of the rules of human cooperation and coexistence. In essence, people learn them through contact and interaction with others. In contrast to legislation (which is the product of the sovereign will, orders from a superior, the exercise of power over a subordinate), these informal rules are the habitual product of interaction between people. The development of these rules is analogous to the development of rules of human language. If there is mutual support and acceptance (which creates a harmonious and productive society), then it is not necessary to enforce everything.

I mean civic associations in a very broad sense, not just charitable or educational organizations. There is a wide spectrum of such organizations that range, in their levels of formalization, from associations that are almost of a public law character (such as the bar association) to the most unstructured types of social gatherings. Even very informal associations, such as recreational groups or organizations directed toward a particular hobby, serve the function of developing the normative order. For example, a group that just gets together during free time, what might be termed a gang or a band, also fits into this latter category. During a teenager's formative years, such groups play an absolutely central role in the individual's socialization.

It is with regard to civic associations that free societies so markedly differ from totalitarian, since in the latter the state is very jealous or suspicious of such associations because it is aware of the influence, and thus power, that they wield. The communists did not stamp them out, which is a common misperception; rather, they co-opted them, allowing just a single and unified, hence fake, association under strict state and party control. So it is important to keep in mind that the Czech Republic, as is the case with other post-communist nations, is a virtual desert in terms of civic associations. The communist era left in its wake a very atomized society. In contrast to the situation in which we found ourselves in 1989, the Czechs were far better placed to overcome this problem in 1968, when a large portion of the people had themselves experienced life in a free society and their previous civic organizations spontaneously revived them without much difficulty. There is a tendency on the part of public officials to misconceive the critical importance of these associations. They feel that in many cases it is serving a function that belongs to the state, but that it is doing so without democratic legitimization, so they should be regulated. In my view, this is a grave error.

Thirdly, there is the family and the school. There exists a general misconception that these are the most important factors, however, the most recent research demonstrates that their importance is limited to the basic socialization functions. For example, the parents' love and touching of an infant is irreplaceable and without it the child will always suffer from deprivation syndrome. These humanistic qualities are essential but not sufficient for modern complex society. Absolutely critical years for development of the inter-human relationships are what is called the "formative years," but they are also the teenage years when youngsters rebel against their parents' influence and start to follow the role models provided by their peers (or heroes from sports and literature). The newest findings contradict the view that the quality of teachers is the factor that is most significant to a person's development in these formative years. On the contrary, what is most important is that the teenager has a quality circle of friends, because these friends will most influence the teenager's behavior. For this reason, far more important than the quality of teachers is the place where the school is, or the type of people among whom the teenager finds friends. Similarly, I think the advantage of going to top universities is not that the professors are tops in their field or even Nobel Prize winners; it is because the student is placed among other students of the highest caliber. Finding a wider circle of quality friends is why study abroad is so vital.

The fourth avenue is the media in the modern world. I conceive of the media also in the broadest possible sense, as including TV and the press (which have immense direct influence on our daily lives), but also encompassing more profound cultural expressions found in literature, films, even children's fairy tales. The importance of this sector is seen if we consider again the necessity of harmony between informal and formal normative systems. The values conveyed in the media, especially literature, constitute a nonrational, noncognitive milieu of conveying norms. As it has a close connection with people's emotions, it can be a stronger and much more effective way of teaching values. To state it succinctly: the stirrings of the heart call forth the stirrings of the mind. In fact, the sense of justice, which is a nonrational, even emotional reaction to wrongdoing in the world, is the point where we can see the connection between art or beauty and law. They touch each other precisely at that point where myth or literature provide people with their deepest, most instinctual spheres. Of course, this fact can be misused, as it is the basis of propaganda.

In 1990, a few professors of the University of Chicago Law School expressed great skepticism whether any transformation in Central and Eastern Europe would be possible at all. They cited the great hardships involved in rapid economic restructuring, the lack of available finances, but also the fact that the new democratic institutions are not generally conducive to undergoing such hardships. They reasoned that when the people participate in the decision-making process, they will not be willing, in the long run, to suffer the hardships, such as widespread unemployment, inflation, and other deprivations that are necessary to achieve genuine economic transformation. After a certain period of tightening their belts, they will simply revolt against it and vote in those who promise easier ways to reform the economy. This inherent difficulty could be overcome by financial assistance as represented, for example, by the Marshall Plan.

The main point I wish to make is that while transformation can be helped along or sped up if you replace financial capital by importing it, by receiving assistance from abroad, however, since it is connected to the local culture, the same cannot be done for moral capital. Of course, you can substitute informal, moral rules by legislation (state enforced rules). The replacement of morality by law is a trend that can be seen generally around the world--while it is workable in part, it has its limits. Namely, it is financially costly and it brings about serious costs in terms of alienation. If you replace voluntary rules by enforcement of tough legislative measures, you increase the people's negative attitude toward the law (hatred and alienation). This is among the most unfortunate legacies of the communist regimes--alienation from the law, which is in sharp contrast to an identification with the legal system.

It is not possible for the transformation in Eastern Europe to occur in a relatively short time, unless we all concentrate on the hearts and minds. The people have to change, which will most likely only occur due to the change in one generation. The danger is that, if we do not intensively focus on the education of the younger generation, it will take even longer. For this reason, I am convinced that it is better to send our young students to the West than to have legal experts come to Prague to explain the rules of some area. As I said, more is required than to learn the rules. The exposure to an entire complex of culture and life in a foreign society (the natural contact with foreign contemporaries or learning by osmosis) cannot be substituted by lectures about new rules.