-

Ulrike Götting

Welfare State Development in Post-Communist Bulgaria, Czechoslovakia, and Hungary_

A Review of Problems and Responses (1989-1992)

Zes-Arbeitspapier Nr.6/93

Cenlre for Socia! Policy Research University of Bremen

Parkallee 39 D - 2800 Bremen 1

This paper is based upon a research project Ulat is joinUy conducted by Ion Elster (Center for

the Study of Constitutionalism in Eastem Europe, University of Chicago), Claus Offe (Center

for Socia! Policy Research, University of Bremen), and Ulrich K. Preuß (Center for European

Law and Policy at the University of Bremen). The project is funded by Ule Volkswagen

Foundation.

Contents

I. Introduetion: Socia! poliey and eeonomie transfomlation in East Central Europe

2. Unemployment benefits and aetive labour market policies. 4

3. Provisions for old-age and disability. 12

4. Sick-Ieave schemes. . . . . . 15

5. The siekness of medica! care. . . . 17

6. Income support for families . . . . . 20

7. Socia! safety nets against poverty . . 22 8. Conclusion: Different paths of welfare state development? . 24

Bibliography

Ulrike Götting

Welfare State Development in Post-Communist Bulgaria, Czechoslovakia, and Hungary

A Review of Problems and Responses (1989-1992)*

1. Introduction: Social policy and economic transformation in East Central Europe

Capitalism and socialism are frequenUy looked at from the perspective of an equity-efficiency

trade-off.1 Capitalism is praised for its ability to attain economic growth and efficient aIlocation

of resources, while socialism is said to have traded off efficiency for a more egalitarian

distribution of income and social protection. This reasoning suggests that, when moving from

plan to market, societies in the Eastem part of Europe may weH achieve improvements a10ng

the dimension of efficiency, but limit the attainment of equity goals in this way. To incrcase

labour productivity, it is argued, govemments have to give up Uleir commitrnent to rull

employment; to promote economic growth and stabilize the stale budget social programmes

have to be curtailed; to encourage people to seek gainful employment access to social income

has to be tightened. Reversely, if political elites in post-communist societies pay "too mueh"

attention to soeial problems and people's demands for "social justiee" during Ule transition

process, they are to miss the goal of stabilization and end anger the possible, long-term fruits of

eeonomie transfonnation.

This simple framework needs refinement in several respeets to be useful for the analysis of

eurrent soeial reform in East Central Europe. First, we must doubt the assumption that Soviet­

style eeonomic systems and welfare policies were, in fact, more sueeessful along (all 01) the

various equity dimensions (MI employment, social transfers and services, enforeement of soeial

• Thanks are due to Frank Bönker, Thomas Faist, Brigiue Hartmann, Vera Kuchalova, el aus Offe, Friedbert W. Rüb, and Alexander Stoyanov for important information, suggestions, and criticism on an earlier draft. I do not want to discuss here whcthcr and in what respectthe notion of an equity-cfficicncy Irade-off actually makes sense. Le Gmnd (1990) and Schmidt (1991), e.g., have addresscd this issue thoroughly. In what follows I shall use the terms equity, equality, and soeial justice synonymously. Thc goal of efficiency is for this purpose identificd with economic growth and optimal allocation of resources.

2

rights, etc.) lhan lhe Western Keynesian welfare states. This is to say lhat the transilion to

democralic capitalism could result in improvements bolh in equity and efficiency (Rupp 1992).

Seeond, lhe efficieney-enhancing features of social policies probably offset eertain reservations about lhe priority of efficiency. As Western experienee shows, vocalional training and

promotion of regionalmobility, e.g., may lead to productivity gains, social policies may have a mitigating effeet on business fluctuation, and "social peaee" appears to be one of lhe basic requirements for steady economic growlh (K1einhenz 1986).

Third, problems and ehallenges to social policy makers occurring in periods of trallsitioll differ

from lhose "standard" problems to be addressed in eilher of lhe systems onee established. In lhe

transition period, political actors have to decide on basic questions of institutional design: how

to counter lhe problem of unemployment, to replaee lhe pension schemes of lhe old regime by

newly designed ones, to redefme lhe funetion of family benefits, to draw an inslitutional

distinetion between eeonomic and social polieies, etc.2 These dccisions are taken for granted,

onee lhe constitutional confliet is setUed. Then "nomlal" policy-making has to resolve lhe task

of smoolhly adapting lhe already existing institutions to changing environmental eonditions.

Furlher, the transition period calls for special measures to alleviate lhe most pressing "social

eosts" of societal transfornlation. These emergeney measures, lhough merely intended as

stopgaps, are likely to have longer-Iasting effeets and to influenee lhe process of welfare state

institution building in lhe region as weil (Offe 1993). In short, we have to tailor lhe analytical

franlework particularly for lhe dilemmas of institulion building and for lhe ralionality of

"polilical engineering" (Greskovits 1992) of comprehensive economie and social refonns ralher

lhan for lhe comparison of "matured" eeonomic systems and welfare regimes.

To get an idea of lhe necessities for profound social refoml in post-communist politieal economies, we must briefly look at lhe old approach of social benefit provision.3 Fonnerly,

social programmes were designed to serve eeonomic goals. Social policy was seen as an

integral eomponent of lhe production process necessary to satisfy lhe "workers' needs", as

defined by lhe party-state. It was not perceived as a supplement to lhe labour market whieh ex

post redistributed resources to compensate for "social risks" . None of lhe welfare "rights" was

legally enforceable in lhe sense lhat unconditional enlitlements were conferred on lhose

fulfilling lhe relevant condilions (having participated in lhe labour masket for a eouple of years,

laeking olher means of subsistence, ete.). Fonn, content, and level of benefits were ultimately

detennined by tlle party-state and, lhus, were ralher gifts lhan rights by nature. The eoverage

ratio of lhe eore social progranlmes (pension, sickness, medieal care, and family support

sehemes) was close to a hundred per cent. However, benefits and services were often very low

(as in lhe case of pensions) or of poor quality (as in lhe ease of heallh services). In addition to

social income and services, extensive subsidies on basic goods (foodstuff, housing, energy,

transport) eonstituted a erucial element of lhe state socialist approach to social policy. Nearly all of lhese benefits were distributed at lhe workplaee. State-owned enterprises provided c!tehes,

2

3

Yel in the area of social poliey, Ihere are more meaningful points of eontinuity Ihan, e.g., in Ihe realm of economics. For a summary deseription of Ihe "Iogie" and features of slate socialisl welfare slates, see Deaeon 1992a; Ferge 1991a; Holzmann 1991; Offe 1993; Queisser 1992.

3

holiday hornes, housing, health setviees, training, and other welfare faeilities for their

employees. In other words, they performed most of those soeial poliey funetions whieh speeifie

ageneies provide outside the sphere of produetion in Western industrial eountries. Social poliey

in state soeialist politieal eeonomies was not aseparate poliey area, but took the fornl of price

and industrial poliey as weil. The eore soeial programmes were largely finaneed by eannarked

eontributions of enterprises (payroll taxes)4, but funds were not separated from the general state

budget and benefits not linked to previous eontributions.5 The eontribution of market or non­

profit organizations to the provision of soeial welfare was negleetable .

This paper is taking a eloser look at the first three years of post-eommunist soeial reform in

Bulgaria, Czeehoslovakia, and Hungary. Generally speaking, eaeh of these eountries represents

one of several types of socialist eountries (Offe 1992). They differ remarkably from eaeh other

in their eeonomie, politieal, and eultural legacies of eommunism as weil as in the mode and

speed of regime transition. We might expeet these differenees to be refleeted to so me extent in

naseent post-eommunist social poliey legislation.6 During the Zhivkov era, Buigaria Oike

Romania) stood out for her solid loyalty to the Soviet Union, her relative eeonomie

baekwardness, and her high level of ethnie eonfliet The regime transition took plaee within a

very shon period of time, but the rnajority of eadres remained in leading positions after the first

free eleetions. While Bulgarian eommunists did not allow for any eeonomie experiments almost

till the end, HUlIgary could look back to and feet encouraged to continue a long history of partly

successful eeonomic reform perfonned during the Kadar period. Hungary (like Poland) has

strong cuitural ties to Western Europe and belongs to the group of eountries eharacterized by a

high degree of national integration. While Hungarian leadership is increasingly concerned with

the problem of external minorities (Hungarians living in Romania, Slovakia, and the sueeessor

states of Yugoslavia), Czechoslovakia was ehallenged (and meanwhile has failed) to nlitigate

internal sub-national cleavages. The latter country had Oike the GDR) one of the most

developed eommand eeonomies, but (after 1968) no tradition of eeonomic refonn communism

to build upon. Rather than being the result of prolonged eonf1iets and negotiations, regime

transition in Czechoslovakia was rapid and radical.

Moreover, each of these countries has a specific pre-war social policy tradition which might

also aceount for prospeetive · differences in post-eommunist welfare approaehes. When

Czechoslovakia was founded in 1918, Austria's sociallegislation immediately came into force

in the Czech lands, whereas in Slovakia Hungarian law persisted at first. What the country

4

5

6

The total social insurance contribution of employers is very high in East Centra! Europe eompared to Western European countries. In 1991, payro11 laxes amounted to 48 per cent in Poland and to 50 per cent in Czechoslovakia, but only to 30 per cent in Bulgaria. In Hungary, employers currently contribute 49 per cent and employees eleven per cent of their wages. The raising of earmarked contributions may be regarded as one of the few remainders of the "insurance principle" (equivalence of eamings-graded benefits and contributions) that are to be found in socialist social security systems at a11 (Schönfelder 1988). Crucial factors that affect speed and direction of welfare state reform are, e.g., the macroeconomie conditions and social problems the country is facing in the transition period, the preferences and bargaining power of the political actors that are involved in the decision-making process, the institutional legacies inherited from the past regime, and probably also the mode of extrication. I cannot elaborate tllis point here in fulliength .

4

inhcrited from the Danube Monarchy was a highly fragmented, still incomplete Bismarckian

social insurance system. This social security net was substantially improved in the 1920s,

particularly in ternlS of coverage, and was taken over on the fonner Hungarian territory (Bohata

1990). Hungary also set up a patchy Bismarckian-type social insurance system at the beginning

of the century. Yet social insurance covered almost exclusively the industrial workers, whereas

agrarian jobholders, representing the majority of the working population at that time, were

practically unprotected (Czucz 1991: 330-331). The Bu1garian social security system of the inter-war period mainly consisted of two branches, one granling pensions to civil servants and

the other providing a modicum of social proteetion for industrial employees in case of old-age,

disability, sickness, matemity, and work injury. The vast majority of the population working in

agriculture was not covered by these schemes (Dodun~kowa 1978: 701).

The present paper, however, does not aim at presenting a comprehensive explanation of post­

communist welfare state refonn. E.g., it does not take up the question, whether today's social

policy makers in East Central Europe have, in fact, invoked their country's pre-communist past

and attempted to revitalize some of the institutional patterns of the inter-war period. This study

is not concerned with the decision-making process and the political conflicts of welfare state

redesigning, but focusses on the policy side 0/ current welf are slale re/oml. The aim is to

explore the necessities for social refornl and to summarize the first institutional responses to

these problems in the Ulree countries. Yet, owing to the state of Ule existing literature (wrilten in

English and Geffilan), the picture sketched below shall be far from complete. The present study

deals with each country's employment, pension, health, family, and welfare policies in

comparative perspective, but does not claim to fully account for all relevant aspects.

Unfortunately, the literature surveyed also did not allow for an analysis of the problems

regarding housing, education, and social services. This means that some of the social policy

areas that were crucial for the socialist welfare approach, as outlined above, will not be taken

into account. In short, the paper intends to review the "state of the art" and to identify the issues

that are still in need of exploration.

2. Unemployment benefits and active labour market policies

At the outset of the refoffil process, Central and Eastern European societies could not rely on

any extant institutional policy system to address the problem of unemployment Under

communist rule, unemployment had been a taboo subject for a long time. Adequate income

support systems for the unemployed were virtually non-existent in the region'? Therefore, all

post-communist goVeßU11ents had to start from scratch. lmmediately, they saw thcmselves

confronted with the task of introducing adequate unemployment benefit schemes, setting-up

7 The same is true of the majority of countries in the inter-war period. Only Poland, the Soviet Union, and Bulgaria set up a kind of unemployment insurance after Wor1d War I (cf. Szurgacz 1991: 298; Schönfelder 1984: 41-42; Ferge 1991a: 74).

5

market-oriented employment exchange offices as weil as designing retraining programmes and

other active labour market policies.

In the first two years of the transition period. employment levels in most post-communist

societies fell only moderately. despite enormous declines in aggregate economie output. With

the exception of Poland and the (former) GOR, unemployment ratios in East Centra! Europe

remained low in 1990 (below two per cent of the labour force), but meanwhile have increased sharply. Until today. open unemployment has far exceeded the threshold of ten per cent in most

of the countries. with significant regional disparities (see chart I). According to the official

statistics, in Oecember 1991, national unemployment rates amounted to 12.5 per cent in

Bulgaria. to 8.5 per cent in Hungary. and to 6.6 per cent in Czechoslovakia (4 .1 per cent in the

Czech Republie. 11.8 per cent in the Slovak Republic -- OECO 1992: 257). Moreover. high

levels of unemployment are likely to become a persistent feature of labour markets in transition

countries (Boeri 1992; see also RFE/RL 1992).

chart 1: Registered unemployed in East Celltral Europe as a percellt of the labour force

16

14

12 :,...---

10

a

6

4

2

/' /

/

/'

..... -..... ---

/"/~ ... , .~ ............. ..... : __ --_4>

Olr"! ___ - I I •

.­---

..... /

/

/" /'

, , .'

~

---. "

-.-:0""'- - # --

, ,~.' ./ .. ~~ .. , / . ./

0" ",' . /

". o. _ .. _ ··_··Jo /.,

/

-

Jan 90 Mat May Jul Sep Ho't Jan 91 Mat May Jul Sep Nav Jan 12 .. .tu .IIo(ay

Bulgaria Czechcs:ovakia Hungarj Poland Romania

Sources: Monthly data on the number of registered unemployed provided by national statistical offices. quoted after Beeri 1992

Large-seale unemployment means a sharp break with the communist commitment to full

employment that people had got accustomed to in the past twenty or more years. Weil from the

beginning of the process of economic transformation. when unemployment still was a minor

6

phenomenon in quantitative terms, the populations of the post-communist countries reacted with

anxiety and nervousness to Ule looming threat. Their fear of unemployment was exacerbated by

the risk of losing access to non-wage benefits that had been a major component of remuneration

under central planning (foodstuff and durable consumer goods, child care and holiday facilitics,

housing and other benefits -- cf. Standing 1991: 244-248).

Generally speaking, political actors in East Central Europe can select among Jour strategies of coping with unemployment: First, they may tolerate continuing labour hoarding or even

subsidize inefficient levels of employment to avoid the breakdown of old state-owned

enterprises that otherwise would not survive in a market cconomy, thus delaying the process of

economic transformation. A second type of measure is aiming at the reduction of labour supply

on the labour market, either by having women, pensioners, or school-leavers switch over to the

so-called "hidden labour supply", by promoting sclf-cmployment, or by furthering contractual

work in (or even encouraging migration to) foreign countries. The result would be that the

(visible) problem of unemploymcnt to deal with becomes smaller. Th.ird, governments may

introduce income support schemes for the unemployed in order to alleviate the consequences of

unemployment. Such compensatory ("passive") measures are to be distinguished from, fourth,

active labour market policies. These latter policies try to modify either the supply side (training

and retraining programmes) or the demand side (job creation and public works programmes)

and seek to balance supply and demand in the labour marker. Most (Western) economists judge

the first category of measures, if overdone, to be an inadequate response to the threat of mass

unemployment.8 However, the latter three are commonly recommended and belong to the well­

tried instruments of labour market regulation in Western industrialized countries.

Which of these measures have been taken in the three countries? At early stages of economic

restructuring, short-time working arrangements, paid leave, subsidies for state enterprises which

maintain past levels of employment, and similar measures were used rather extensively in

several countries (e.g. in Bulgaria, Roman.ia, and the fornler GDR) to keep workers in some

form of employment.9 This response may account for the fact that employment-output

elasticities have persisted to be relatively low du ring the first two years of the reform process in

East Central Europe. Governments obviously accepted that "managers have so far confined

themselves to reductions in the number of shifts, the introduction of short-time work.ing

arrangements and the shutting down of production lines without implementing large scale

layoffs" (Boeri/Keese 1992: 147).

The employment laws enacted in Bulgaria, Czechoslovakia, and Hungary since 1989 introduced

a mix of measures to foster reintegration of displaced workers into gainful employment (cf.

8

9

See, e.g., van Wijnbergen (1992: 20-22) on the problems of a "workfare firm "-approach to enterprise reform. The Romanian deeree-law of January 19, 1990 is a good exarnple of an inadequate response to the problem of unemployment. Under this law, institut ions and enterprises were obligated to hire a set number of unemployed pcople within a year. "There was no economie rationale behind this move, sinee most enterprises were already ovennanned and the eeonomie situation showed no sign of recovery." (Ioneseu 1991: 28) Shortly, even the govemmental newspaper eonfessed that the decree­law was, in fact, "an EI Dorado for many truants" (Ioneseu 1991: 28).

7

OECD 1992: 259-263; Fischer/Standing 1992: 13-20). In particular, hopes were placed on

training and retraining sehemes to improve and change labour force skills according to the

probable long-term demands of a restructured economy. Yet much of the initial optimism has

been damped in the meantime. It appears to be extreme1y difficult to identify the specific type of

training needed and to design schemes that are appropriate for the task of reintegrating job­

seekers into work as fast as possible. Further, in order to cut unemployment direcUy publie work

programmes providing temporary, low-paid jobs for the (unskilled) long-ternl unemployed were introduced in Hungary and Czechoslovakia (in Bulgaria only on an experimental base).

Participation in retraining and public works has so far been on a voluntary basis to avoid the

smack of centra! plaruling.

In addition, alI three countries offer some kind of assistance to unemployed people who want to

beeome entrepreneurs, such as start-up loans, direct financial support equivalent to the amount

of unemployment benefits, and a reimbursement of consulting costs. Job ereation sehemes

which provide investment aid to enterprises hiring unemployed people frorn the roUs were quite

extensively used in Hungary prior to 1991, but were then canceUed because of their limited

effectiveness and cost concems. Today, a similar programme granting "soft loans" to job­

creating enterprises is successfully applied in Czechoslovakia. The Czech Republic also set up a

system of employmem subsidies for sehool-Ieavers in 1991 which has proved very effective and

has meanwhile been adopted in Siovakia, too. Finally, Hungary and Bulgaria introduced early

retiremem programmes to cut back on employment of oldcr workers (see below sect. 3).

In short, a diversified set of employment policy instrwnents 10 has been legally put in pI ace. But

financial and administrative constraints have seriously limited the actual implementation of

Ulese policies so far. Because active and passive measures are, as a rule, financed out of the

same budget, the ouUays for the latter are likely to crowd out the fonner. Total expenditure for

labour market programmes has meanwhile increased to bctween one and two percent of the

GDP. Unemployment compensation as apercentage in the employment budget has doubled in

Bulgaria (from 31.7 to 83.2 per cent) and Hungary (from 34.4 to 76.0 per cent) over Ule period

from 1990 to 1992, while in Czechoslovakia the share of the active component has slighUy

increased from 1991 to 1992 (from 23.4 to 30.0 per cent -- OECD 1992: 261). The latter country

is said to be the most successful anlOng the three in instituting a serious active labour market

policy (Burda 1992).11 In Bulgaria and Hungary, by contrast, various active programmes were

abandoned for budgetary reasons. Employment offices in these countries are still understaffed

and not sufficienUy equipped to fulfill their tasks of registration, guidance, and placement

properly (OECD 1992: 261-262). In Hungary, the right to ofrer employrnent service has been

liberalized; since 1991, job placement is no longer astate monopoly. Policy instruments need to

be urgenUy refined, especially to counter regional disparities of employment prospects and deal

with the problem of labour market segmentation. Hence, the introduction of mobility ineemives

10 Detailed infonnation on the programmes and the scope of their implementation have not yet been available to the author.

11 lt is the only country among the thrce where the employment prospects have meanwhile improved; in the course of 1992, unemployment rates decreased by!wo points both in the Czech and the Siovak Republic (Holubov5 1992: 88).

8

and targeted programmes for long-tenn unemployed, disadvantaged youth, ethnic minorities,

and other groups vulnerable to marginalisation is presenUy taken into consideration.

Unemployment insurances were introduced remarkably early in East Central Europe. Table

summarizes the main features of the schemes implemented in the three countries surveyed as

weU as recent curtailments in this area. However, it should be emphasized that these systems

have been frequenUy revised and that they are hard to compare beyond fomlal institutional parameters, viz. in tenns of generosity. effectiveness, etc. 12

Table 1,'

COUIIIIYI

I pcoircotl.in"e

8. I __ 11ft. 1990

__ NlW. I990 I

tinf;:eJuIy 199. I

I "'"' MK:ehn. l990

..... Pd>.1991 I

..... 1-.199l I

..... hR. I99) I

Unemploymenr Benejit Sehemes in Bulgaria, Czechoslovakia, and Hungary (first

legal provisions and their amendments since 1989)

:;-1 ....... .. - ....- ~ ...... .-....... ......... _ .. "." .... " • illmLn

_ ..... eiaNil>' dlnlionol

_ ... ') ........ ...... .. -.. ~ IOclMll l ) , ...... ,.-""'"'

A I Job __ tolldl _ 9""'" 1000001 •• omdt" l'IoI...o<:mI QoWiII-

...... ic:oI>nd_ _1iIw~IO. UlIm_~_

tllJ>lcbqllll,,'" elOh "'{lnt/, 10 ~ elUm fVId (oortain

_0'" 6IhnlOlllh,mw_ ......... ~ ofp&yroll

)m",,'" IM'"

8 I y ....... _ ....... ~ ........ now ( ....... "")

v""' ........ ...., .. ion

A jablllll .... 01 ..... ...,""~Hkulim

~, ... .... ....... A ..-.. .~. job .... loItbDc_ '-ll...aJU\l·) m ...... uminp- 9Ofoolmw l..o..oI.",w

of""""-"'_"\leha- .. a-_'l wicul'.IIO ..... III..,,-

1IIWl11fJk>YI,,"".oU.lIO .. ruu/ 01 Job ...

"'u .... qatl'u

8 I ... pmorwdilchafacdr_ .- rn .. { ......... '

miliUry _""""*

A I " ....... 9Ofo .... 60110" 11I.6moollba, I,OOOKCS 2,.ooXCS ........ ~ 2nd 6 monI\I

A I " ...... '''~ 110 .... oulWy"~- 11 moollM ~or601lo') ,.. Utin_

..... "" ... L\II..IIotjClt> hl6rnodht, !he_I),

otru, ia<:_llon. 7) 601Iolnli6 __

LI I ... ........ ,.,... A I ........ 6010 •• ) mmchI

~2nd)"""

~durioI&"

I.oinin&

A I _.-(caJlritJutionl

ot ... ~ .. 1fId

efl1ll00)'tU)

12 For a related argument conceming the comparison of unemployment benefit systems in OECD countries, see OECD 1988.

9

'QoII~1)'1 - ........ "'.- ..u....i .. p""'.ot ~.- ..... "'piaoo- ......, -- ",tueel:

ponoftime ') "."lnun polio.:! prior elilllilily donli<Jo.fII mont r. J) ...... , -, r .. _ioC

.........,..... IOWinl2) ...... ..-

.-H I I __ , ... 191' A ,,- '- 110011 .. ,,,,",,,,,- _ ,,- 6O-70!10 9). 101 ~at" ... ), .... """"')D"'oIfUd

h_ .- h_ (1UIe 1r...ms,

_2.Dd6Da11hf;

• I upI ................ IO _ _ ,,- 7fl1ocl ............. _ 21 __

~bener. --, .. "~ __ MoodI

I A ,,- '- ~ ..... ~ 6-204 nlOllht IOJ 70110 111 puio.l of Sol~y f\Ind

"" ...... enliClonwnl ("",IIribo.lIoo.d .....

~2nd ... riod "'''Y1' .. arld~) <1fcn.itlo .... nI

• I .r~ 1u .... 1dIooI Jmmlhlwailq ...... 7)11oc(1QW

IIOU/tio. INfIl )'UR .. puiDd ( ___ J

...... J ... I99l I A I S. l l mollthJ 10) '''"" \toc " ....

MW = minimum wage

1) cases A and B are mutually exclusive alternatives 2) in order to qualify for benefits lhe claimant must have completcd the rcquired minimum employment period

within Ihis time; seme non-paid "useful" activities (education. military service, matenity) are counted as employment

3) ratio o f benefit 10 previous gross eamings; benefit as a rule taxable 4) dcpcnding on age and total Jenglh of service 5) 20 per cent of the differcncc between the previous wage and Ihe minimum wage; when a bcncficiary starts

part-time work, hc is entilled 10 50% of the unemploy-mcnl bcncfil, if the remuneration docs not cxcccd thc

minimum wage

6) first ratio , if job lass duc to "rcorganizalion" of the enterprise; second ratio all other cases

7) provisions differ in detail betwcen the Czech and lhe Siovak: Rcpublic

8) in February 1991lhe minimum wage was set at 2,CXX) KCS

9) depending o n who had terminated employment and the reason for giving no tice

10) depending o n previous contributions

Sources: Czucz 1990; Czucz 1991; Jessel-Holst 1991; Stoyanov et al. 1992; Tausz 1992; World Bank 1992; correspondence with colleagues in Prague

Arnong the three countries, the Hungarian communist regime has embarked on economic

refonn most substantially, and post-communist elites have been inelined to continue the polities

of gradual refonn of the previous govemments. Sinee the 1980s, Hungarian employment poliey

has changed step by step.13 Arnong other things, a re-employment benefit was introdueed in

1986, whieh offset the loss of income of the redundant labour force for one year, if an enterprise

dismissed at least ten employees during the sanle period. Yet, owing to the tight eligibility

13 Similar changes in employment policies can be observed in Poland. Weil before the end of communist rule (in February 1974, amended in January 1982), a sort of unemployment compensation was set up and a number of employmcnt promotion measures were introduced. The new goveming coalition headed by Soldarity Prime Minister Mazowiecki picked up the thread of previous legislation when quickly drafting an Employment Act in late 1989 (Szurgacz 1991: 298; correspondence with Andrzej Kijowski, Poznail). -- For similarities between the Hungarian and the Polish road to democratic capitalism, see also Bau 1991.

10

eriteria easily to be by-passed by the managers, the seheme remained insignifieant in

quantitative temlS (Szirnezki 1990: 717-718; Ferge 1989: 99-1(0). In April 1988, the eritieal

"ten-persons-rule" was eancelled and, fmally, the re-employment benefit was replaced by an

unemployment benefit scheme in late 1988. The scheme at most paid two years of benefit

(unemployment benefit plus temporary allowance) LO someone who had spent at least half of the

previous three years in employment.

The Employment Aet of 1991 eompletely restruetured the scherne. Sinee March I, 1991,

employers and cmployees have to contribute to a so-called Solidarity Fund Ulat was newly

established to separate unemployment payments from the state budget. The basis of entiUement

is nOw the amount of contribution paid prior to becoming unemployed. One has to work at least

one year to be supported for half a year; those who contributed for four years or more receive

payments for two years at maximum. In the meantime, the Employment Act has been modified,

to~, and contribution rates have been significanUy raised. They nOw anlOunt to five per cent

(I 991: 1.5 per cent) for employers and One per cent for employees (1991: 0.5 per cent) (Tausz

1992: 15).

The initial construction of the Bulgarian unemployment insurance reflected rather short-teml

political objectives (cf. Stoyanov et al. 1992: 14-17). Joblessness was not defined as a "social

risk" that people were regularly exposed to in market economies, but regarded as a corollary to

enterprise restructuring in the transition period. The perception and definition of the problem

have changed in the meantime. After the scheme had been in operation for several months, a

first attempt was made LO introduce more stable and manageable eligibility criteria in OcLOber

1990. The Employment Act of 1991 again redefined the qualifying conditions. Compared LO

other countries in the region, eligibility criteria have remained rather tight in Bulgaria. Persons

who "voluntarily" quit their job still cannot receive benefits even after a long waiting period

(OECD 1992: 258).14 Other features of the scheme, like the calculation fomlUla and Ule level of

benefits, have also been reshaped. At present, Ule scheme is a hybrid between a flat-rate and an

eamings-related system. The unemployment benefit consists of a payment at the anlOunt of the

minimum wage plus an eamings-related bonus amounting LO 20 per cent of the difference

between the minimum wage and the beneficiary's average wage during the previous six

months. 15

In Czechoslovakia, to~, the unemployment benefit scheme was anlended several times. Most

importanUy, the initial level of benefits was lowered and the length of payments was cut down

from One to half a year. In the meantime, the scheme also provides substantial incentives

towards retraining. After the expiration of their claims, unemployed persons are eligible for

14 In Deeember 1991, nearly half of those registered at labour offices in Bulgaria (46 per cent) did not reeeive unemployment compensation either because they did not meet the qualifying conditions or had exceeded the maximum duration of payments, compared to 32 per cent in Hungary and 21 per cent in Czechoslovakia, Poland, and Romania (Boeri 1992: 5).

15 Poland meanwhile has followed that path of institutional adaptation. The Polish govemmcnt gave up their initial commitment to the insurance principle at the end of 1991 and opted for a flat-rate approach. Aceording to the new Employment Law, unemployment benefits are paid at the amount of 36 per cent of the national average wage to all reeipients in Poland.

11

social assislance which is not necessarily lower than uncmployment benefits; i.e. the "principle

of distance" between the level of social assistance and the amount of social insurance benefits is

not applied. Czechoslovakia is the only country anlOng the three that has not set up a special

income support progranlme for graduates who do not succeed in finding a job immediately after

school. Since the major lax refonn has taken effect on January I, 1993, support for the

unemployed is financed, as in Hungary, out of a separate fund to which employers and

employees each contribute two per cent of the wages (Svitek 1992). Eligibility criteria (as weil

as unemployment rates) vary considerably between the Czech Republic and Slovakia. 16

However, it is open to question whether the Siovak leadership will now, after the divorce of the

two nations, slow down the speed of economic refonn and can afford to "buy" political

support 17 by adopting a more "generous" strategy of social refonn.

Notwithstanding a1l the differences in regulation just described, two striking similarities

between the three countries should be emphasized. First, a1l of the countries have set up

eamillgs-relared schemes at the beginning, although moderate flat-rate benefits, as proposed by

the International Monetary Fund (IMF) and the World Bank, seem to be more appropriate due

to the fiscal constraints and peculiarities of the transfonnation period (cf. Holzmann 1991: 7). A

flat-rate benefit at or above the minimum wage, it is argued, would be more targeted than an

earnings-related schcme, as equal benefits replace a larger percenlage of lower incomes Ulan

higher incomes. Workers with higher eamings would have a greater incentive to strive for

reemployment than under a regime that replaces in proportion to previous earnings. Also, the

stigmatizing effect and the high administration costs of a means-test, if compared to a (though

even more targeted) social assistance scheme, could be avoided. Moreover, if coupled with

eamings-related contributions (and not only with payroll laxes), the !laHate scheme would have

a distinct redistributive effect, and it seems to be easy to implement and operate. Other

considerations at the beginning of the transition period, however, were opposed to the IMF

proposal. Seeing that societal consent was weak and that there was no time for experimentation,

designers of post-communist social policy legislation feit tempted to copy well-tried,

"successful" institutional patterns of Western welfare states. In addition, an earnings-related

approach relieves governments to some extent of the task of taCkling the ticklish problem of

poverty lines and subsistence levels (see below sect. 7). While a flat-rate benefit demands

justification with regard to the poverty threshold, an eamings-graded scheme simply couples the

level of benefits with the primary distribution of income, the laller being essentially detennined

by the two sides of industry in the process of wage bargaining.

16 While in lhe Czech Republic anyone who, in case of dismissal, receives a lump sum equivalent to two up 10 five monlhs' wages by his company is nOI enliUed 10 unemploymenl benefils for belween two and five monlhs, Slovak law slales Ihal unemploymenl benefits have 10 be granled regardless of olher paymenls. Furlher, Ihe limil for income allowed 10 eam while receiving unemploymenl compensalion is lower in Ihe Czech lands Ihan in Siovakia (Manin 1992: 41-42). -- 11 is not c1ear, whether Ihe exceplional Siovak provisions are slill in force al Ihe lime of wriling (see, e.g., Ihe assessment in OECD 1992: 263).

17 According to recent survey data, Ihere are considerable differences in people's attiludes and expectations in lhe Czech and Siovak republics wilh regard 10 income inequalilies, employmenl perspeclives, and welfare benefilS. The Siovaks obviously expecl more Slale proleclion and ask for higher welfare benefils lhan Ihe Czechs (Vecemik 1992: 74,76; POlucek 1992: 4-5).

12

A second striking similarity is timt, initially, all countries introduced rather gellerous income

support sChemes18, but soon started to readjust them. Due to fiscal constraints and mass

unemployroent which both had clearly been underestimated, political actors had to tighten

eligibility criteria and to reduce replacement ratios as weil as duration of payments. Widespread

"misuse" of the original provisions was another reason for cutting benefits. In all countries, the

"classical" financial dilemma of unemployment insurances is now obvious: The moment

expenditures of the scheme increase revenues decline. 19 Retrenclunents adopted to taclde the

pressing financial problems, however, cause further problems. One major problem is that the

disadvantaged who have most difficulties in fmding a new job are the first to lose social

protection. There is a rising number of long-term unemployed whose eligibility for benefits has

ceased and who are now subject to the still underdeveloped social assistance schemes at the

locallevel (see below sect 7).20

3. Provisions ror old-age and disability

The pension systems of the three countries surveyed have several basic features in COInmon (see

table 2 for details): The schemes were designed to cover the risks of old age, disability, and

survivorship of the whole population, Le. all occupational groups were inc1uded in one

retirement income programme. Within these public progranmles, a distinction was usually made

between different work categories or occupations conceming, e.g., the age of retirement or the

level of benefits. In none of the three countries, the obligatory public pension insurance was

topped up by -- either mandatory or optional, public or private -- supplementary support

schemes.21 All programmes combined, even though at varying degrees, elements of a flat-rate

and an eamings-graded schenJe. The respective pension fonllulas were non-linear, viz.

including substantial redistributive elements (minimum pension, degresssive replacement rate,

upper ceiling for benefit calculation, etc.). In oUler words, they were not tailored for truIy

transfonning the insurees' empIoyment records into their pension entitlements, as is, e.g., the

West Gemlan pension scheme. Rather, they were designed to somewhat equalize the

distribution of income within cohorts at the time of retirement. In addition, the pension formulas

18 The generosity of the sehemes described is difficult to assess because they differ along various dimensions. If we Lake into account the duration of payments, income replacement, and coverage ratio, Hungary's programme is by far the most generous, while the benefits provided by Czechoslovakian and Bulgarian policies are comparatively frugal (Burda 1992).

19 "The most striking example is that of Bulgaria, where the number of employees for which unemployment contributions are paid by entelJlrises fell by more than one-fourth (from 4.1 to 3 million) since the start of the transition process." (OECD 1992: 261) -- For an analysis of the fiseal crisis of post-communist slntes, see Campbell 1992.

20 Especially two issues need to be furt her examined: the links between unemployment insurances and social welfare programmes and prospective compensations for partial unemployment (short-time working etc.).

21 By contrast, the GDR had a two-tier pension system. In 1971, a voluntary public supplemcntary pension insurance (Freiwillige Zusatzversicherung) was introduccd to insure earnings that exceeded the constant income ceiling of the obligatory public sehe me for computation of maximum benefits (cf. Schmähl 1992).

13

were statie ones (no indexation rules being ineorporated) leading only to benent adjustments to

inflation on an ad hoc basis. Further, salient privileges of the politieal elites were built into the schemes. The retirement age was very low (for women lower than for men) and not completely

flexible, Le. there were no or linie actuarial decrements or inerements for early or later

retirement. On the eontrary, pensioners were encouraged not to fully withdraw from regular work, but to supplement their (non-taxed) pension by ineome from employment.

Tab/e 2: Pension Schemes in Bu/garia, Czechos/ovakia, and Hungary (as 011991)

-..,. I ....... , qu&l;tyin, """'"'" pcOlion min"mUD ,,~~ fllll diuobil.iry

retftlDent per;.,.t 2) ..:pI-=mcnt ..... , pt'llIioa widDw'. peo- PClUm S) (in ')

'SC 1) (in )UI"$) -" (ia )'I'ars) (m,," .im ( in 'It or (in'lo) olm.) heDen ... or ~"""""'" o<Jx,

m;'" ~. tbe dcccued) ddeue or u_ accideDl

BO 60~. 25m SS..ao 6) 61-92 6) ] (I~) " ,. 70-100 0) 55-90

55 WOll)ltD 20_-. ."lI! ofOI!. (atagc.5O) 10) .rGE "'OE (Iimitcd) Oimised)

"'FR 60~. 25 50-60 9) 1-2 Ux:..: ... 9) S (10) 12 00 miu. 60-70 11) Dlin.SQ.60 11)

S3-S7 ..,omen 8) orOE pcr 8I:rvlcc (u l&e 50) 10) orGE ofGl!

year,abKilule

cciliD,

H 60_. 20 12) " " , (S, " ,. 1Q.IOO I) miß .• 7.5 14)

S:5 women .rNE .rNE (luge SS) 10) "'NE "'NE

GE = gross earnings; NE = net enrnings; mw = minimwn wage

1) age when full benefits can be taken up; lowcr for some occupations

2) minimum number of service years requircd for entitlcment to full benefits; seme periods of non-contribution (education. military service, matemity) are counted as service years

3) ratio ofbcnefit lO income when in work (as declarcd in the bcnefit reguln.tions) 4) (consecutive) years of service with highest carnings considercd for computn.tion; in brackets refcrence period

prior 10 rctircment 5) disability category I (pcrsons unable to work: anymore bccause of severe health handicaps) 6) depending on runount of prcvious earnings 7) depending on amount of previous earnings and service period 8) depending on number of children raiscd 9) depending on work category the beneficiary belonged to

10) as a rule, the age requiremcnt is irrelevant. if the widow is disabled or has to take care of minor children 11) depending on work category the beneficiary belonged to; 1-2% increase per service year up to absolute ceiling 12) increased from 10 10 20 years in 1981 13) depending on service period 14) exact amoun1 dcpending on age when invalidity occurcd and service period

Sources: Adam 1983; Cztlcz 1991; Holzmann 1992; lessel-Holst 1991; Schmied 1982; Stoyanov et al. 1992

In detail, however, national pension programmes differed remarkably: The Hungarian pension

scheme was less egalitarian than the other two. Leaving the minimum pension aside, in

Hungary, the level of benefits fully depended on service years and employment incomes. The

income ceiling for the computation of maximum benefits was rather high (more than two tim es

14

the average net wage in the mid eighties) and a maximum of 42 service years could be considered. In Czechoslovalda and Bulgaria, by contrast, wage differentials were essentially reduced by means of a low flat-rate benefit maximum (about 1.5 times the average net wage in

the mid eighties). In the latter country, a degressively graduated replacement ratio also serves as

a levelling element. In Czechoslovakia, the categorization of work introduced as an incentive to direct labour into less "attractive" jobs (e.g. in mining) had notable redistributive effects. In

sum, pension differentials (in terms of the difference between lowest and highest pensions) have been much wider in Hungary than, e.g., in Czechoslovakia since the mid seventies (Adam 1983:

295). Moreover, the comparatively high relative level of pensions set Hungary apart from her

neighbours in the region, albeit this might not be equally true, if we compared pensions in real temlS. "The high pensions of a small percentage of the population in Hungary are to a certain

extent a money illusion since, once set, their purchasing power steadily depreciates." (Adam

1983: 296; cf. also World Bank 1992: 142)

Few restrictions were placed in getting access to disability pellsiolls in the three countries in

question. In the case of occupational diseases or accidents, only medical criteria were applied to

determine eligibility for pensions. If disability could be contributed to other causes, pension

entiUements were somewhatlower and also depended on certain qualifying periods. The major

drawback of the unified treatment of various disability risks within one scheme, however, was

that employers were not held responsible for occupational risks, UluS having litUe incentive to

increase safety and health standards at work. As a rule, beneficiaries were neither allowed to work, nor were they forced to submit to medical checking on a regular basis. In addition,

rehabilitation and retraining programmes were completely insufficient. Hence, there were no

incentives and opportunities to leave the schemes, once a person was on the roll. The approach

to survivor pensions was governed by the idea of "social compensation". Surviving dependants

were granted income support, only if Uley could not be expected to participate in the labour

market to eam their living, such as in the cases of tull disabili ry, child raising, or old age.

World Bank Country Studies and other reports reveal that the pension programmes in the three

countries are today in a severe crisis (cf., e.g., Holzmann 1992; World Bank 1992). The studies

call into question the effectiveness and efficiency, as weil as the long-term financing of the

schemes. Most importanUy, the systems presenUy do not guarantee a minimum standard of

living for the elderly. In January 1991, about half of the Hungarian pensioners received a

pension below the official subsistence level (Queisser 1992: 16). In Bulgaria, the average old­

age pension amounted only to 32 per cent of the average wage by the turn of 1991/92 (Stoyanov

et al. 1992: 28). Moreover, inflation pennanenUy reduces the value of pensions in real terms.

Thus, pensioners are still forced to look for paid work after retirement, often evading the

minimum wage provisions. The unfavourable employment trend, the extremely low retirement

age, and the demographic development (fall in fertility rates, increase in life-expectancy,

migration of younger age groups) render the systems more and more financially unsustainable.

The old-age dependency ratio (i.e. the nunlber of persons aged 60 and over as a percentage of

those aged 20 to 59) was lower in East Central Europe than in Western industrialized countries

in the mid eighties, but is expected to increase substantially over the next 40 years (ILO 1989:

100; cf. also Dybovä 1989). Falling labour force participation rates and the financial

15

consequences of benefit improvemenlS bring even more pressure 10 bear on the schemes. Bulgaria, e.g., had roughiy 2.37 million "full-time pensioners" in January 1992; compared to the

about 3.1 million adullS in employment, this is a very high figure which far exceeds, e.g., the

West German pensioner ratio (Engelbrekt 1992: 64). Without major structural refomls 10 curb

total pension ouLlays, the a1ready high contribution rates in East Central Europe will have to be

raised further.

In the first two years alter transition, pension laws were frequenLly revised, but no major

pension reform bill has been passed so far. The pension models discussed range from a

moderate (universal or means-tested) flat-rate public scheme allowing for extensive private

provisions 10 a (mandatory) two-tier public system (basic flat-rate plus eamings-related

supplementary scheme) topped up by (optional) private pension arrangemenlS (cf. Hoizmann

1992; Ferge 1991b: 140-141). The numerous minor pension amendmenlS put into force mainiy

have aimed at adjustillg Ihe level 0/ beJlejits to Ihe rising cost of living. In Czechoslovakia, Ihe

Pension Act of March 1991 fully links minimum pensions to Ihe cost-of-living index, whereas

higher pensions are oniy partially adjusted on an ad M e basis to Ihe development of wages. In

Bulgaria, 100, Ihe implementation of an automatic indexation rule is still on Ihe agenda. A

regular adjustment principle has been introduced oniy in Hungary so far (pensions Iinked to

average net wage -- Social lnsurance Act of February 1992).

Considering the current labour market situation, post-communist govemmenlS have rejected any

increase in the standard retirement age up to now. Instead, early reliremellt programmes have

been introduced in Hungary (already in 1988) and Bulgaria (spring 1990) to tackle Ihe problem

of uncmployment. In Hungary, older workers may go into retirement up to five years earlier

Ihan they are originally allowed to; Ihe state subsidizes 50 per cent of the costs of early

retirement in cases of large-scale workforce reductions. The Bulgarian govemment offers older

workers 90 per cent of Iheir normal pension, if Ihey agree to end Iheir employment conlract

wilhin Ihree years prior to the standard retirement age; entelprises are free to make up the ten

per cent difference or pay an additional sum of money as a compensation for the loss of

employment (Szirnczki/Windell 1992: 491). Tbere seems to be a trade-off between, on Ihe one

hand, Ihe requirement to gradually delay retirement at full benefit levels in order to render Ihe

pension systems viable and, on Ihe olher hand, Ihe need to increase exit from Ihe labour market

at almost any cost to cope wilh Ihe emerging problem of mass unemployment.

4. Sick-Ieave schemes

Central and Eastem European countries have not set up separate social insurance branches to

make employers Iiable for Ihe risk of occupational disease or injury. The appropriate social

insurance agencies provided paymenlS bolh in case of industrial and non-work-related

sickness22 (lhe same applies to disability pensions, see above sect. 3). Tbe major difference

22 Matemily allowances are included, too. For systematic reasons, I arn going 10 deal with !his type of benefit in sec!. 6.

16

between both types of compensation was that the former was paid without any time restriction

and designed to fully replace previous eamings starting on the first day of illness. In the event of

non-work-related sickness, the socia! insurance 1aws provided in none of the three countries a

waiting period of a few days to reduce the problem of "moral hazard" (such as in France, Ita!y,

or Great Britain). Yet the respective replacement rates increased with extended illness, thus

constituting at least a smaII disincentive to "misuse" the programmes for short periods of non­

sickness-related absence from work. The fmancia! burden of siek pay rested solely with the

social insurance funds, except for Hungary where the employer had the financial responsibility

for at least the first time days of sick leave (see table 3).23

Table 3: Siek Pay Provisions in Bulgaria, Czeehoslovakia, and Hungary (as 0/1991)

-'UY nuninal ..,placement nie I) (in 'I muimwD ~ioo waitinr. e.q>loyer'.

g(paynJ:m. pc:riod 3) re.~bility

~POtiOmI DOD- .... ork-n:lall:d aictnt. 2) (DOD-woR:oft llscd fgr pa)'mC'1U

di.tc:_ GI'" .eo;Kk,. .ickDuo)

Ba '" 70-90 rll'Sl14day. ~

orGE 80-90 bcyond 14 da)'.

orGE

CSF' 90 50-70 fusil da)'. 1 y<u

.(NE "'·90 bo:yond 3do)"

.(NE

H 100 65-76 fl1Sl 30days 1 y<u fl1Sl1 da)'l

orGE 70-80 bcyond 30 diaYI

7S-8S beyond 90 day.

ofGE

GE = gross earnings; NE = net earnings

1) ratio of benefit 10 incorne when in work (as declared in the benefit regulations) 2) the Tale dcpcnds on service years; there are certain maximum benefit provisions 3) rlfst days of sickness during which no bencfit will be paid

~tioo

ofbencflls

,..

4) no Icgislatively set upper limits; if sickncss duration exceeds 12 months, the individual is classificd as disabled and entitled to disability allowances

Sources:Czucz 1991; Dohle 1991; Schmied 1982; Stoyanov et al. 1992

The prime deficiency of the schemes proved to be their illcelltive strueture. Neither employers

nor employees were encouraged to minimize total sick leave costs. On the contrary, the schemes

stimulated enterprises to reduce their wage bills in periods of cyc1ica! downtum by shifting the

burden to the socia! insurance funds. 24 Given the possibility of engagement in Ule shadow

23 In Poland, by contrast, benefits for employees of state-owned enterprises were paid out of the enterprise wage fund. whereas the socia! insurance agency covcrcd private sector employees. Furthermore, enterprises were obliged to pay for work-related injuries and diseases (Szurgacz 1991: 291-292).

24 In the past, state-owned enterprises manoeuvred a great deal to increase their independence from centraJ wage regulations. The law "permitted them to hide the wages of !hose on sick leave or in the

17

economy to compensate for small decreases in nominal net income (and the comparatively low

replacement rates of the newly introduced unemployment benefit schemes), employees, too, had

a strong case for preferring frequent and/or long speils of sick leave over regular work (or

unemployment). In addition, siek pay provisions were badly integrated with rehabilitation

efforts (Holzmann 1991: 11). Hence in all three countries, the level of siek pay ouUays are

relatively high due to the large number of beneficiaries. This is especially true of Hungary

which is said to have the world's highest number of compensated siek days per insured, averaging 29 days per year (World Bank 1992: 49; cf. also Levai 1991: 22).

Amendments of sickness provisions, most importanUy, pertain to the distribution o[ [inancial

responsibilities. Reform proposals aim at shifting a large share of the costs to employers, to a

lesser extent also to the insured individual. Bulgarian govelTUllent, e.g., intends to introduce a

waiting period of one day and an elllployer's obligation to pay for the first four weeks of annual

sickness (Holzlllann 1991: 12; cf. also Stoyanov et a1 . 1992: 23-24). As of January 1992,

Hungarian employers have to pay for the first ten (instead of only three) days an elllployee is

absent beeause of a bout of illness (pataki 1992: 61). Such a gradual modification of the old

schellle had a1ready been an issue during the discussions of the social insurance reform bill at

the Couneil of Interest Conciliation (Erdekegyezeto Tandcs), founded in late 1991. In the end,

both the employers' and the employees' representatives agreed upon the amendment because the

Minister of Welfare threatened to increase the contribution rate by 2.5 points (Brusis 1992:

543).

5. The sickness of medical ca re

The basic idea underlying the organizational structure of socialist health care systems was to

provide all members of society with free medical services of high quality and equal standard. In

practice, however, these goals were hardly realized. Neither did all citizens have equal access to

medical services due to increasing regional disparities in health provision and apparent

privileges of the nomenklatura as against ordinary people. Nor did the technologieal,

phanllaceutical, and personnel equipment of hospitals and oUlpatient departments come c10se to

Western standards. As investments in the health sector have almost been absent for two or more

decades, health facilities, especially hospital buildings, are today in a desolate state. Moreover,

medical services were free of charge only on paper. Though socialist health law at most

prescribed that patients had to bear a small anlOunt of drug costs, it had become common

practice in Central and Eastern European countries to give substantial tips ("fees") to doctors

and nurses in return for extra or better medical treatment.

process of applying for disabilily pension. In this way they could creme a considerable 'saving' from their yearly wages for a while, by counting such staff among their aClual employees. That sum remained with the firm and could be used freely for increasing the eamings of those who really worked, without harming the stricUy sanclioned rules which related only to their aggregate wage expenditures." (Szalai/Orosz 1992: 153)

18

Especially in Hungary, the practice of tipping reached alanning levels in the 1970s and 1980s.

The majority of patients feit obliged LO pay so-ealled "gratitude money" in order to be

adequately treated. Surveys condueted in the 1980s revealed that the amount of payments varied

signifieanUy throughout the eountry. In ease of simple surgieal operations, shadow

remuneration eommonly reaehed four-digit, in eomplieated eases (e.g. eardiae or ophthalmie

operations) f"ive-digit amounts of forint (SitzIer 1988: 177-178). The Hungarian govemment

pennitted and even indueed the expansion of this distorted market relationship beside the state­socialist health system. The loose provision of the Penal Code conceming paraszolvellcia was

never revised. All the more, gratitude money was officially taken into aceount when salaries of

the state-employed physicians had to be fixed .25 There seemed to be a tacit consent between

docLOrs and goveming elites in that the fornler accepted a steady relative decrease of their

official salaries while the latter LOok the practice of gratitude money for granted (Szalai/Orosz

1992: 160). The eorollary of this deal was that patients substantially contributed to the financing

of medical care in Hungary.

Generally speaking, the publie health systems inherited from the socialist past lack both

efficiency and effectiveness. It is true that all three countries surveyed belong to the

international top echelon coneeming the number of physicians per inhabitants. But such figures,

of course, do not tell us very much about the quality of medical services and the efficiency in

health provision. In Hungary, e.g., the number of physicians per hospital bed has steadily

increased since the 1960s, yet at the expense of primary health care. The oulpatient sector

providing medical treatment for the very most of the patients is said LO be hopelessly

overburdened, notably in the eountryside (Sitzier 1988: 202). Further, eosUy hospital beds were

frequenUy "misused" for the care of the elderly and chronically ill. As hospital treatment was

free of charge, with accommodation in nursing homes being a scarce good, the elderly and their

families attempted to prolong the stays in hospital, if need be, by bribing doctors (Ferge 1991 b:

145; Dohle 1991: 295). In addition, observers regularly complain of the constanUy deteriorating

physical condition of the Hungarians. As in Bulgaria or Czechoslovakia, the state of health of

the Hungarian population is LOday much more dire compared to Western Europe (in tenns of

mortality rates, life expectancy at birth, suicide and alcoholism rates, etc. - cf. VlIgerö/l1lsley

1992). Taking into account budgetary eonstraints, the population's deteriorating health status,

corruption, and waste of money, post-communist goverrunents have a strong ease for

eompletely overhauling their health systems.

It is mainly the Gennan insurance system -- partiy publie, partiy private -- that serves as a

model for eomprehensive health eare refonn in East Centrai Europe, particularly in Hungary

and Czechoslovakia26 The eornerstones of refonn in these two countries27 may be deseribed as

folIows:

25 "The final blow fell on morals in 1989, when the Ministry of Finance made these tips taxable." (Ferge 1991b: 144)

26 Cichon (1991: 319) also points to the striking similarity betwecn loday's rcfonn proposals and the basic features of the health eare systems that existed in these eountries up to the late 1940s.

27 At this point, precise infonnation on Bulgaria is unfortunutely lacldng. For Hungary and Czeehoslovakia see Ciehon 1991; Ferge 1991b: 145-150; Pataki 1992; Pehe 1990; Pot~cek 1991; Potucek 1992: 14-16; Szalai/Orosz 1992: 162-165.

19

(a) Reductioll 0/ state control and red tape: Medical services are no longer to be financed and run direcUy by the state but by either anational self-goveming body (as headed for in Hungary) or by local self-govemments (as p1anned in Czechoslovakia).

(b) (Re)transformation of the public service model into an illsurallce-based scheme: Govemments are mapping the course for the introduction of a two-tiered system, composed of mandatory sick funds covering "standard care" and complemented by option aI private schemes for "non-standard" medicaJ treatment.

(c) Encouragement of private provisioll of health care: Patients should be able to consult doctors of their own choice with their insurance cards. Correspondingly, physicians in the private (may be also in the public) medical sector are to be paid by insurance companies for services rendered.28 Social policy makers hope thaI an appropriate reimbursement of medicaJ personnel will spirit the phenomenon of tipping away.

(d) Complete modemization of the existing health infrastructure, including large-scaJe investments in the health sector, a new management system and reimbursement scheme for hospitals and a pronounced improvement of preventive medicine.

As a matter of fact, comprehensive refoml of the health service proceeds only very slowly in

both ex-socialist countries. In 1990, the Czechoslovak parliament decided on a proposal to

change the old system in three successive steps: first the decentralization of administration, then

the setting up of the insurance scheme, and finally, the privatization of health provision.

Decentralization was set forth in the course of 1991, but resulted in an unexpected "patchwork

of many incompatible institutions" (potucek 1992: 14). The details of the health insurance

scheme and the privatization progranlme still have to be worked out and are far from being

implemented yet.

The Hungarian govemment took the first step towards health care refoml in December 1991,

when it ordered the printing of insurance cards and started a so-called "family doctor system".

However, "the haphazard way in which the changes are being introduced is already causing

confusion and concem among doctors and patients alike" (pataki 1992: 62). Physicians are

afraid of losing (supplement) income29 and job security; patients suspect that they will have to

pay for everything in the end. lt is not surprising that the details of this first health reform bill

were negotiated behind closed doors without consulting the main pressure groups concemed.

Up to now, none of the latter is strong enough to have a decisive bearing on the legislative

process. The reestablished physicians' associations so far have been caught up in deep inner

struggles. Trade unions are proliferating and are no less plagued by intemal conflicts. In sum,

strong collective actors and established procedures for consensus-reaching are still missing in

Hungary - "which is the main (although not the only) obstacle to the promulgation and

implementation of an adequate health refonn proposal" (Szalai/Orosz 1992: 165).

28 We may eagerly observe whether the Gennan melhod of reimbursement of physicians in private praetiee and other regulations of Ihe heallh eare system that the Gennans heavily debale at present will be truIy copied in East Central Europe.

29 Doctors seem to be reluctant to give up Ihe praetiee of receiving (and demanding) "gratitude money" as a means of supplementing Iheir ineome. "For example, when the Hungarian Medieal Association was reestablished in September 1991, it was announeed thaI the association would eombat corruption, but the body's final statutes did not inelude any elause to Ihis effeet." (pataki 1992: 62) .

20

6. Income support for families

Central and Eastem European countries have set up comprehensive and rather generous systems

of family benefits since the mid sixties including, most importantly, lengthy periods of paid

matemity and parental leave, provisions for paid leave of working parents in case of the

sickness of their children, universal family allowance schemes providing high monthly

payments per child which rise by the ordinal number of the children, and lump-sum payments at

birth of cltildren (see lable 4).30 Such family cash benefits were a necessary supplement to low

and egalitarian wages. Moreover, benefits were designed to promote births, yet did not prove to

be very effective in Ws respect

Table 4: Maill Family Bellejits ill Bulgaria, Czechoslovakia, alld HUllgary (as o[ 1991)

-"" ,,",cnanc:y and matemity leayc child-can: Icaw I ) famiI)' dUld binh <:bild-cuo:

alIowanoc 2) -" .iek IcIW

dlll'atioo ..... """"" ........ cCJOllCIUA1kxl

(inlOOlUbt) (in"'> <alt olchid)

BG I 4_6 4' 100 ..... , mwl) n"·r.rebe ..... ye.4) 1001. 01 GE., ifdtild lIDdu 1;

ofGl! rll \lQtiI chjd standard liek pa)" if dUld

""" , ..... ~ac:br. 16 (e.- 18) belwem 9 aod 16.5)

(001.)' lDlIll ~ of

IMn' COß1Xowioa)

CSFR I 1 .. ..... , low !lu·nle naHate \>enc- l<' IIp 10 7 days ewry proIaJ*,

"'NE bc:.xr" fit WlIiI child standard,i<:k pa)'

rucbt.26

H I , 65.1006) "," , 6S.'Ylo6)ofGE, nil-nie belle- ,.. .tandatd ,iek pa)' S)

"GE 9O'lo of mw a1 minimum fil\l~ilchild

vntil3 low nal-rlle bendit 4) reacbt. 16 (01" 20)

GE = gross earnings; NE = oet earnigs; mw = minimum wage 1) bcnefit providing a continuation of the matemity allowance; may be received also by fathers on ccrtain

conditions; reemployment is guaranteed 2) amount of bcnefit essentially depending on number of children; as a rule, higher payments for disabled children

and single parents 3) lump-sum payment at birth of the child to cover the costs connected with the birth 4) depending on numbcr of children 5) duration of paid leave cssentially depcnding on age of the sick child 6) depcnding on service period 7) substantial wage increase, if benefit not laken up

Souree,: Chernozcmski 1991; Dohle 1991; Kroupov:i/Huslar 1991; Z:\m 1991

30 There are other family benefits that are not dealt with hcre atlength, including subsidized loans for young couples, extra payments for large families, mother's-day holiday bonuses, child lax allowances, travel support, and various benefits in kind. Mozny (1992), in addition, points to lhe effects certain provisions of the pension law (low retirement age, lacking limit for additional income) had on behavioural patterns of the family.

21

Family benefit ouUays as percentage of GDP, especially expenditures on family allowances,

were much higher in East Central Europe than in most OECD countries in the 1980s (Holzmann

1991: 28). A disproportionately large share of total expcnditures went to lower income

households, but persons at the top of the income pyramid also received a considerable amount of outlays because of the universal granting of income support (see for Hungary, e.g., World

Bank 1992: 65, 79).31 !LO figures indicate that Hungary had the most generous scheme of

family allowances for !wo children in 1980 (25 per cent average remuneration), closely followed by Bulgaria (22 per cent) and Czechoslovakia (20 per cent), while Western Europe

clearly fell below that standard32 (quoted after World Bank 1992: 167). However, these figures

should not be mistaken for truly reftecting social policy preferences of the respective

govemments. Typically in the Western part of Europe, a greater variety of instruments are used

to provide income support for families, among them, most importantly, the instrument of child

tax allowances (World Bank 1992: 64).

Since the breakdown of communist rule, the function and, thus also, the generosity of the

schemes have been heavily debated. The further the process of transformation to a market

economy is proceeding, leading to productivity-based wage increases, the more the need for a

generous universal system of income support for families, supplementing low wages, is

diminishing. Nevertheless, that situation calling for a fundamental redesign of the schemes will

probably not arise in the near future. At least in the transition period, post-communist

govemments have strong incentives for preserving the real value of family benefits and much of

the universal character of the schemes, regarding them as an instrument for reducing poverty.

A better "targetillg" of (some of the) family benefits seems to be necessary, so as to contain

costs and to avoid unequal treatment of citizens in the process of economic restructuring. In all

three countries, a means-testing or a taxation of (a portion ol) family allowances and a sharp

differentiation of payments by family size are envisaged. None of the govemments can virtually

afford to "waste" money on subsidizing high income households. Moreover, the likely different

impact of wage and price liberalization on the real income position of households would be

exacerbated, if the schemes remained unchanged. Arguably, those getting higher-than-average

wage increases at the beginning of the process of wage differentiation need not receive an

additional compensation for the rising cost of living by means of family benefits. Further, high

income households suffer less from the relative increase in prices of basic consumer goods

(Holzmann 1991: 13). These arguments, however, have to be balanced with considerations of

horizontal distributive justice (Le. coneerning the distribution of ineome between households

with and without ehildren), whieh the family poliey is aiming at, too. The costs of widespread

31 Despite the numerous farnily benefits, however, large families particularly suffered from poverty in East Central Europe. In Czechoslovakia, e.g., about 150,000 families with together 350,000 children had to live on an income just at the subsistence level (Tome~ 1991: 193). While poverty among pensioners has relatively declined in Czechoslovakia and Hungary over time, poverty among family with children has become re1atively more important since the mid seventies (cf. Atkinson/Micklewright 1992: 237).

32 In Great Britain, e.g., the percentage amounted to eight per cent, in France and West Germany to seven per cent, in Denmark only to three per cent; however, in Austria to 17 per cent.

22

means-testing should be laken inlo aeeount as well, so as to have a true idea of the financial

implieations of sueh a measure.

Another point at issue is the lellgrh of maremiry alld parelllalleave. Under eommunist rule, the

system of ehild eare payments, guaranteed reemployment, and publie day-eare faeilities ensured

both high fern ale labour market panieipation rates and a heavy relianee on paid maternity and

parentalleave. Mothers frequently stayed at horne to look after their ehildren in the first years of life, but typieally reentered the labour market when subsidies expired. The eommon family

pauern was based on two full-time earners, exeept for those periods of paid leave. In Hungary,

e.g., the employment pattern of mothers is refieeted in a low usage made of nurseries providing

day-eare of ehildren aged less than three, eompared lo high rates of participation in kindergarten

edueation for 3-6 year old ehildren (World Bank 1992: 175). In the proeess of transition from

plan to market, this regime of subsidies and guaranteed job rights is diffieult to preserve.

Employers may be more reluetant to hire women, if they are obliged to guarantee reemployment

for up lo three years at ehild birth (Pauken 1991: 627-628). Extended periods of paid parental

leave are ineompatible with budgetary eonstraints and detrimental to the eeonomy in ternlS of

human eapital 1055 (not to speak of women's eareers). Yet these eonsiderations must be offset

against the eosts of providing sufficient day-eare and the long-tenn effeets of demographie

imbalanees. Paid maternity and parental leave might also serve, as in Western industrialized

eountries, as an instrument for withdrawing women from the labour force, thus disguising

female unemployment (see above sect. 2).

Finally, the [illallcial responsibiliry for family benefits is a subject of debate. The Hungarian

Parliament adopted a law, in December 1989, aceording to whieh the state rather than the Social

Insurance Fund becanle responsible for the financing of fanlily allowances, while the finaneial

burden of medical care was shifted from the state budget to the Social Insurance Agency. This

measure is Iikely lo render the family allowance scheme more vulnerable to budgetary

constraints.

7. Social safety nets against poverty

Under communist rule, poveny was widely ignored33 and, therefore, a benefit of last reson

based on nationwide poverty criteria vinually non-existent. Social assistance in cash or in kind

was provided mainly for the destitute handicapped and frail elderly. The schemes were not

designed to suppon large numbers of people solely lacking an adequate income. In Hungary,

e.g., ollly persons over 18 who (a) suffered from severe disability or were ten years older than

the retirement age and (b) did not dispose of an income above a cenuin limit (viz. the minimum

widow's pension) and had no relatives able and obliged to suppon them could be granted a

33 The available figures on poverty under communism are hard to compare. The results Atkinson/Micklewright (1992: chap. 8, esp. 236·237) present at least indicate that, measured according to official minimum levels of living, the problem of poverty in the 1980s was of significance in Czechoslovakia, Hungary, and Poland.

23

regular minimum income. Adults experiencing severe temporary fmancial distress, but not

meeting the requirements for regular support might apply for emergency social assistance, six

times a year at maximum. The determination of eligibility and the setting of payments were

entirely in the hands of local authorities. Similar provisions existed for children in need. Further,

there was a very patchy network of social services and social income in kind, including food

catering and school meals, payment of rent and fuel costs as weil as nursing services and

homes. 34

Such schemes had three salient shortcomings. Most importantly, the population of the three

countries did not have a right to social assistance. They were not entitled to welfare aid, "in the

sense that any individual demonstrating fmancial need (and meeting any other specified criteria)

is guaranteed payment, with an appeals procedure providing for redress in the case of an

assessment with which the claimant disagrees" (World Bank 1992: 88). Access to social

assistance was essentially a matter of discretion left to local councils. As a result, people were

not treated equally ac ross the country. In small rural conullunities in Hungary, means-testing

was handled in a much more restrictive, bureaucratic, and stigmatizing way than in large urban

councils. Finaily, the programmes suffered from budgetary constraints. The financial resources

made available by the central govemments were not sufficient to protect more than an infmitely

small part of the population.

Post-communist goverrullents have already started to address these problems. The idea is to set

up a so-called "sodal safety lIet" directed at the poor. It is recognized that, on the one hand,

there is a rising number of people who fall through the meshes of other income support schemes

and are not cushioned by the old poverty relief progran1mes. On the other hand, the popular

notion of a "safety net" is used to justify a highly "targeted", residual approach to social policy.

The prevailing idea is that the state should guarantee effective social protection for the "truly

needy" and, at least in the transition period, curtail social protection for everybody else (cf.

Fischer/Standing 1991: 21).

However, a targeted approach requires reliable information on the scope and characteristics of

poverty. Which group is to what extent threatened by marginalisation? Regular poverty

reporting of that kind is still missing in the region. In addition, it appears that govemments

avoid setting up a nationwide poverty line, being concemed that this step would create non­

feasible claims to the social security systems (cf. Queisser 1992: 19-20). So far, post-communist

govemments have concentrated on reshaping the insufficient poor relief progran1mes. In

Bulgaria, e.g., a new social assistance scheme was adopted in March 1991 and has been

amended several times since then. Individuals and fanlilies without an income (above a fixed

minimum) who meet certain conditions (referring to savings and other assets, the size of the

aparunent, etc.) are now entitled to various monthly, periodical, and one-time benefits in cash or

in kind. The amount of regular payments is defined as a percentage of the minimum wage,

34 Welfare schemes in Bulgaria and Czechoslovakia were designed very much along the characleristics ouUined for Hungary. See for the three countries Czucz 1991: 345-346; Jessel-Hoisl 1982: 218-219, 241; Jessel-Hoist 1991: 370-371; POlucek 1992: 12-13; Schmied 1982: 187-188, 197-198; Sloyanov el al. 1992: 30-36; World Bank 1992: 87-98, 176-182.

24

namely 37 per cent of the minimum wage for each person capable of working, 40 per cent for each pensioner and 24 per cent for other members of the family. The minimum wage itself is set

as a percentage of the official "social minimum", monthly calculated by the consumer basket method.

The Hungarian government had conunitted itself to working out a new social assistance law during 1991, but did not manage to pass a bill till mid-I992. The crucial design questions of such areform concern the eligibility criteria, the range of the relatives' responsibility to provide

maintenance, the subsistence minima as well as the rules of cost-sharing between central and

local governments. The Federal Parliament of Czechoslovakia, by contrast, passed a bill in 1991

which guarantees a minimum income to people demonstrating financial need. The financial aid

is only minimally below the support for the unemployed, and the benefits are adjusted to inflation twice a year.35

8. Conclusion: Different paths of welfare state development?

The tour de force across several fields of social policy has unearthed numerous points of

similarity between the countries included in our comparison. In all three cases, hundreds of

bills, decrees, and regulations have been devised to cure the failures of the old welfare systems

and to respond to new social problems resulting direcUy from the first steps taken towards

capitalism. It is, above all, the direction of social reform and the mode of decision-making that

appear to be very much the same in Bulgaria, Czechoslovakia, and Hungary. The legal framework for coping with rising unemployment has been established, and far greater reliance

than before is now placed on the market for the provision of benefits as well as in voluntary

effort ("Third Sector"). Policy makers had to act under enonnous time pressure, and first measures taken often followed the "trial-and-error" principle. Initial generosity has decreased,

and all governments presenUy favour a targeted approach to social policy. In very general ternls,

we can say that welfare arrangements in the three countries have become much more Western­

style in that the "Iogic" of benefit provision has been reversed (cf. Offe 1993). The state socialist

social security system has been and will further be reshaped to operate as a concomitant of the

labour market which redistributes resources to compensate for "social risks" ex post.

However, there is no such thing as the typical Western welfare state, and the transition to

democratic capitalism does not imply that welfare state provision need take a particular form

(Esping-Andersen/MickJewright 1991: 62-64). This suggests that we even take small

differences in post-communist social legislation seriously and look for emerging diversities in

social policy responses. RecenUy, Bob Deacon (1992b: 175-183) has argued that we may draw

a sharp distinction between countries like Hungary, Poland, and Czechoslovakia (or Ule Czech

Republic), one the one hand, and Bulgaria, Romania, and the fonner Soviet Union, on the other.

While the former, from the outset, were more willing 10 reshape their welfare systems from

scratch, the latter countries, lacking a historical affinity to the Bismarckian model, were much

35 Unfortunately, details of the law have not yet been available to the author.

25

more inclined to continue the pattern of the old regime. While Hungary and Czechoslovalda appcar to convert the communist legacy into a "liberal" welfare strategy (perhaps later on even into a "social democratic" regime), Bulgaria seems to follow a strategy of aulhoritarian

populism that secures a greater degree of state protection for bolh lhe old nomenklatura and sldlled workers.

This study has not shown the distinction between Bulgaria and lhe two olher countries being lhat clear-cut. On lhe one hand, lhe projecl of welfare state refoml has made real progress in Bulgaria since lhe end of 1990. The new coalition govemment, headed by the Union of

Democratic Forces, took a more "radicai" standpoint to economic and social refornl lhan its

predecessor and worked out several important refonn bills (new Employment Act, Social

Assistance Law etc.). On lhe olher hand, diversities between Czechoslovalda and Hungary seem

noteworthy as weil. At first, Hungary was in the advantageous position of picklng up the thread

of gradual refonn initiated by previous govemments, e.g. in the area of employment policies,

but till the present the process of welfare state refornl has proceeded rather slowly. In Czechoslovalda, the lack of previous refonns apparentiy invited a more comprehensive and radical departure from the old regime (cf. Bruszt 1992). This country (respcclively the Czech

Republic) now seems to be in the best position to set up a "social safety net" that mcets the

concems ofboth efficiency and "social justice".

If we take the present findings as a starting-point, research on social policy in transition must

proceed in two directions. First, we have to take into account lhe decision-maldng process and

ask about the genesis of the rules adopted: What coalition of actors adopted the rules sketched

above? In what situational context (resources, administrative capacities, data, skills, foreign

support, etc.) were lhe decisions made? What strategic and nonnative considerations were decisive for introducing certain eligibility criteria, replacement rates, etc.? To wh at extent did

designers of post-communist social legislation attempt to copy institutional patterns of Western welfare states or revitalize their country's inter-war tradition? Second, we have to study lhe

various (intended or unexpccted) effects of lhe rules adopted. If we proceed in both directions,

we will hopcfully be able to give a comprehensive account of welfare state refonn in post­

communist societies.

26

Bibliography

Adam, J., 1983: "The Old Age Pension System in Eastern Europe: A Case Study of

Czechoslovak and Hungarian Experience", Osteuropa Wirtschaft 28, 276-296

Atkinson, A.B./Micklewright, J., 1992: Economic transformation in Eastern Europe and the

distribution of income, Cambridge: Cambridge University Press

Batt, J., 1991: "The End of Communist Rule in East-Central Europe: A Four-Country

Comparison", Government and Opposition 26, 368-390

Boeri, T./Keese, M., 1992: "Labour Markets and the Transition in CentraJ and Eastern Europe" , OECD Economic Srudies No.18, 133-163

Boeri, T., 1992: "Unemployment in Ccntral and Eastern Europe: Transient or Persistent?",

unpub!. ms., Paris

Bohata, P., 1990: "Der Wandel des Sozialversicherungssystems in der Tschechoslowakei",

Jahrbuchfür Ostrecht 31,397-416

Brusis, M., 1992: "Systemwechsel und institutionelle Umgestaltung: Die Reform der

ungarischen Sozialversicherung", Südosteuropa 41, 528-545

Bruszt, L., 1992: "Transformative Politics: social Costs and Social Peace in East Central

Europe" , East European Politics and Societies 6, 55-72

Burda, M.C., 1992: "Unemployment, Labor Market Inslitulions and Structural Change in

Eastern Europe" , unpub!. ms., Berlin

Canlpbell, J.L., 1992: "Retlections on the Fiscal Crisis of Post-Communist States", paper

presented at the 3rd conference on "The Negotiated Economy versus Neoliberalism as an Institutional Framework for a Market Economy: Implications for Post-Socialism" in

Ambleside July 3-6, 1992, unpub!. ms., Canlbridge

Chernozemski,l., 1991: "Children and the Transition to Market Economy in BuJgaria: 'Shock

Therapy' With a Difference?", in: Cornia, G.A./Sipos, S. (eds.), Chi/dren and the Transition

to the Market Economy. Safety Nets and Social Policies in Central and Eastern Europe,

Aldershot: Avebury, 123-148

Cichon, M., 1991: "Health sector refonns in CenlraJ and Easlern Europe: Paradigma reversed?",

IlIIernational Labour Review 130, 311-327

Czucz, 0., 1990: "Arbeitslosigkeit in Ungarn. Ursachen sowie Maßnailmen und Strategien zu

ihrer Behandlung", Zeitschriftfür ausländisches und internationales Arbeits- und Sozialrecht

4,270-282

Czucz, 0., 1991 : "Ungarn: Die doppelte Krise eines einhundert jährigen

Sozialversicherungssystems. RefornlVorschläge und Diskussionen", Zeitschrift für

ausländisches und illlemationales Arbeits- und Sozialrecht 5,327-351

27

Deacon, B., 1992a: "East European Welfare: Past, Present and Future in Comparative Context",

in: Deacon, B. et a1. (eds.), The New Eastem Europe. Sodal Policy Past, Preselll and Future, London: Sage, 1-30

Deacon, B., 1992b: "The Future ofSociai Policy in Eastern Europe", in: Deacon, B. et a1. (eds.),

The New Eastem Europe. Social Policy Past, Presellt and Future, London: Sage, 167-191

Dodun~kowa, P., 1978: "Die Soziale Sicherheit in der Volksrepublik Bulgarien", Zeitschrift für Sozialreform 24, 701-716

Dohle, A., 1991: "Die Gesundheitssysteme in den osteuropäischen Llindern", Die

Sozialversicherung 46, 265-268 (part I), 293-298 (part II)

Dybova, B., 1989: "Population Aging and Pension Systems in Czechoslovakia", Osteuropa

Wirtschaft 34, 320-324

Engelbrekt, K., 1992: "Growing Poverty among Bulgaria's Pensioners", RFE/RL Research

Report I no.9, 64-66

Esping-Andersen, G./Micklewright, J., 1991: "Welfare State Models in OECD Count ries: An

Analysis for the Debate in Central and Eastern Europe" , in: Comia, G.A./Sipos, S. (eds.),

Chi/dren and the Transition to the Market Economy. Safety Nets and Sodal Policies in

Cemral and Eastem Europe, Aldershot: Avebury, 35-67

Ferge, Zs., 1989: "Arbeitslosigkeit in Ungarn", Probleme des Klassenkampfes 76,92-108

Ferge, Zs., 1991a: "Social Security Systems in the New Democracies of Central and Eastern

Europe: Past Legacies and Possible Futures", in: Comia, G.A./Sipos, S. (eds.), Chi/drell and

the Transition to the Market Economy. Safety Nets and Sodal Policies in Central and

Eastem Europe, Aldershot: Avebury, 69-90

Ferge, Zs., 1991 b: "Recent Trends in Socia! Policy in Hungary", in: Adanl, 1. (ed.), Economic

RefomtS and We/fare Systems in the USSR, Polanti and Hungary. Social Contract in

Transformation, London: MacmilJan, 132-155

Fischer, G./Standing, G., 1991: "Restructuring in Eastern and Central Europe: Labour Market

and Social Policy Issues", unpubl. Ms., Paris

Greskovits, B., 1992: "The Use of Compensation in Economic Adjustment Programs" , unpubl.

ms .. B udapest

Holubova, H. (ed.), 1992: ConditioltS ofEmploymem, Prague: Trade Links

Holzmann, R., 1991: Adapting to economic change: Reconciling sodal protection with market

economies (International Labour Organisation er ASS/l991/6), Geneva

Holzmann, R., 1992: Reforming Old-Age Pensions Systems in Central and Eastem European

Countries in Transition: Necessity and Chance (Forschungsbericht 9207), Wien: Ludwig

Boltzmann Institut

lLO, 1989: From Pyramid to Pi/lar. Population change and sodal security in Europe, Geneva:

International Labour Office

28

Ionescu, D., 1991: "Romania - Unemployment: A Major Threat", Report Oll Eastem Europe 2 no.II,27-32

Jessel-Holst, C., 1982: "Das Sozialversicherungs- und Versorgungsrecht Bulgariens", Jahrbuch

für Ostrecht 23,201-243

Jessel-Holst, c., 1991: "Das bulgarische Sozial recht" , Zeitschrift für auslälldisches und

illternatiollales Arbeits- ulld Sozialrecht 5,352-372

Kleinhenz, G., 1986: "Der wirtschaftliche Wert der Sozialpolitik", in: Winterstein, H. (ed.),

Sozialpolitik in der Beschäftigullgskrise, Teil I (Schriften des Vereins für Socialpolitik,

vo1.l52/l), Berlin: Duncker & Humblot, 51-81

Kroupov:\, A./Huslar, 0., 1991: "Children at the Turning Point: Economic Reform and Sodal

Policy in Czechoslovalcta", in: Cornia, G.A./Sipos, S. (eds.), Chi/dren alld the Trallsition to

the Market Ecollomy. Safety Nets alld Social Policies ill Central alld Eastem Europe,

Aldershot: Avebury, 149-/77

Le Grand, J., 1990: "Equity versus Effidency: The Elusive Trade-off', Ethics 100,554-568

Levai, K., 1991: Towards a Refom! of Social Policy in HUlIgary (Diskussionspapier 6-91),

Hamburger Institut für Sozialforschung

Martin, P., 1992: "Rising Unemployment in Czechoslovakia", RFEIRL Research Report I no.3,

38-42

Mozny, 1., 1992: "The Czech Family in Transition from Sodal to Economic Capital", paper

prepared for the conference on "Sodal Responses to Political and Economic Transformations in East/Central Europe" in Prague May 29-31, 1992, unpub!. ms., Bmo

OECD, 1988: "Description of Unemployment Benefit Systems in OECD Countries",

Employmellt Outlook, 115-127

OECD, 1992: "Labour Market Refonns in Central and Eastern Europe and the Rise of

Unemployment", Employmelll OU/look, 239-269

Offe, C., 1992: "Die Integration nachkommunistischer GeseUschaften: die ehemalige DDR im

Vergleich zu ihren osteuropäischen Nachbarn", lecture given at the 26th Meeting of the

Gennan Sociological Assodation, unpub!. ms., Bremen

Offe, C., 1993: The Politics of Social Policy ill East Europeall Transitions. Alltecedellts, Agellts,

alld Agellda of Reform (Zes-Arbeitspapier Nr.2/93), Bremen: Centre for Sodal Policy

Research

Pataki, J., 1992: "Reforn1 of the Hungarian Health-care System", RFE/RL Research Report I

nO.6,59-62

Paukert, L., 1991: "The economic status of women in the transition to a market system. The

case of Czechoslovakia", Illtematiollal Labour Review 130,613-633

Porucek, M., 1991: "The health care reform in Czechoslovakia after 17 November 1989",

Journal of Public Health Medicille 13,290-294

29

Porucek, M., 1992: "Current Social Policy Developments in the Czech and Siovak Republies", unpubl. ms., Prag

Pche, J., 1990: "Czechoslovakia - Changes in the Health Care System", Report Oll Eastem

Europe I no.37, 22-25

Queisser, M., 1992: "Reformpolitik in Osteuropa: Reißt das soziale Netz?", ijo Schllelldienst45,

13-19

RFE/RL, 1992: "International: Unemployment Provision in the Former Communist Countries",

RFE/RL Research Report I no.2, 23-29

Rupp, K. , 1992: "Democracy, Market and Social Safety Nets: Implications for Postcommunist

Eastem Europe",Joumal of Public Policy 12,37-59

SchmähI, W., 1992: Trallsformation and lIlIegration of Public Pellsioll Schemes - Lessollsfrom

the Process of the Germall Un(fication - (ZeS-Arbeitspapier Nr.3/92), Bremen: Centre for

Social Policy Research

Schmidt, V.H., 1991: Some Equiry-EfjiciellCY Trade-Offs illthe Provision ofScarce Goods: The

Case of Lijesavillg Medical Resources (ZeS-Arbeitspapier Nr.II/9I), Bremen: Centre for

Social Policy Research

Schmied, E., 1982: "Die soziale Sicherung in Tschechoslowakei", Jahrbuch für Ostrecht 23,

153-200

Schönfelder, B., 1984: Ökollomisches Risiko und Versicherung ill sozialistischen

VOlkswirtschafteIl. Am Beispiel der UdSSR ulld der DDR ullter Eillbeziehullg der

Sozialversicherullg ulld UllIer Berücksichtigullg der Versicherullgstheorie, Berlin: Duncker

& Humblot

Schönfelder, B., 1988: "Das Versicherungsprinzip in der Sozialpolitik sozialistischer Staaten",

Osteuropa 38, 205-219

Sitzler, K., 1988: "Ungarns Gesundheitswesen - Chronische und akute Probleme", in: Gumpei,

W. (ed.), Probleme der Sozialpolitik im Sozialismus, Berlin: Spitz, 175-211

Standing, G., 1991: "Wages and work motivation in the Soviet labour market. Why a 'BIP', not

a 'TIP', is required", IlZIenzatiollal Labour Review 130,237-253

Stoyanov, A./Beleva, I./Roussenova, L./Lukanova, P./Rakovski, V., 1992: "Economic

Restructuring and the Social Safety Net in Bulgaria" paper prepared for the workshop "Economic Restructuring and the Social Safety Net", in Sofia June 8-9, 1992, unpubl. ms.,

Sofia

Svitek, 1., 1992: "The Czechoslovak Tax Refonn of 1993", RFE/RL Research Report 1 nO.24,

38-41

Szalai, J./Orosz, E., 1992: "Socia! Policy in Hungary", in: Deacon, B. el a!. (eds.), The New

Eastenz Europe. Social Policy Past, Presellt alld Future, London: Sage, 144-166

Sziraczki, Gy., 1990: "Employment Policy and Labour Market in Transition: From Labour

Shortage to Unemployment", Soviet Studies 42, 701-722

30

Szirnczki, Gy./Windell, J., 1992: "Impact of emp10yment restructuring on disadvantaged groups

in Hungary and Bulgaria", IlIIernariollal Labour Review 13 1,471-496

Szurgacz, H., 1991: "Die neueren Entwicklungen auf dem Gebiet des Sozialrechts in Polen",

Zeitschriftfür auslälldisches ulld illternatiollales Arbeits- ulld Sozialrecht 5,279-305

Tausz, K., 1992: "Reforming the Hungarian Welfare State", paper prepared for the conference

on "Comparative Studies of Welfare State Development: Quantitative and Qualitative

Dimensions" in Bremen Sept. 3-6, 1992, unpubl. ms., Budapest

Tome~, 1., 1991: "Social reform: A cornerstone in Czechoslovakia's new economic structure",

Illternatiollal Labour Review 130, 191-198

VAgem, D./llisley, R., 1992: "lnequality, Health and Policy in East and West Europe",

IlIIernational Journal of Health Sciellces 3, 225-239

Vecemfk, J., 1992: "The Labor Market in Czechoslovakia: Changing Attitudes of the

Population", Czechoslovak Sociological Review 28, 61-78

van Wijnbergen, S., 1992: Elllerprise Reform ill Eastem Europe (CEPR Discussion Paper

No.738), London: Centre for Economic Policy Research

World Bank, 1992: HUllgary. Reform of Social Policy alld Expenditures, Washington

Z~m, M., 1991: "Economic Refomls and Safety Nets in Hungary: Limits to Protection", in:

Comia. G.A./Sipos, S. (eds.), Chi/drell alld the Trallsitioll to the Market Ecollomy. Safety

Nets alld Social Policies ill Celllral alld Eastern Europe, Aldershot: Avebury, 179-206