Economic Reform and Citizen Entitlements in Eastern Europe: Some Social Implications of Structural Adjustment in Semi-Industrial Economies

In this wide-ranging paper, FitzGerald attempts to relate the processes of economic restructuring currently under way in Eastern European countries to the social aspirations of the people and the political imperatives of a democratic state. The paper highlights a major dilemma facing the countries of Eastern Europe in their attempts to promote structural reform and economic growth. With levels of productivity nearly a quarter of those in Western Europe, the countries of Eastern Europe had attained indices of social achievement not too far below those in the West. At the same time, with the establishment of political and civil liberties have come social aspirations for welfare systems prevailing in Western Europe. These are in direct conflict with the current policies of economic liberalization, stabilization and restructuring. The strategy of the "big bang", promoted by the Bretton Woods institutions and several Western countries and adopted increasingly by countries of Central Europe, implies in the short to medium-term sharp falls in private consumption, curtailment of social services and creation of high levels of unemployment.

The states in Eastern Europe are thus faced with the contradiction between the economic consequences of restructuring and the social aspirations of the people based on the citizenship entitlements of a modern democratic state. These contradictions are the more difficult to resolve as the modernization project itself calls for major investments in education and skills of the labour force. The author concludes that the contradictions can only be resolved within the framework of an explicit social contract between management, labour and the state. This may in turn call for the establishment of clear entitlements as citizenship rights and necessitate the social planning of basic