Capital, coercion, and postcommunist states

257 Pages·2012·0.85 MB·English

by  Gerald Easter

CAPITAL, COERCION,
AND POSTCOMMUNIST
STATES

Capital,
Coercion, and
Postcomm unist
States
Gerald M. Easter
CORNELL UNIVERSITY PRESS ITHACA AND LONDON
Cornell University Press gratefully acknowledges receipt of a subvention from
Boston College which helped in the publication of this book.
Copyright © 2012 by Cornell University

All rights reserved. Except for brief quotations in a review, this book, or parts
thereof, must not be reproduced in any form without permission in writing from
the publisher. For information, address Cornell University Press, Sage House,
512 East State Street, Ithaca, New York 14850.
First published 2012 by Cornell University Press

First printing, Cornell Paperbacks, 2012

Printed in the United States of America

Library of Congress Cataloging-in-Publication Data
Easter, Gerald, 1959–
Capital, coercion, and postcommunist states / Gerald M. Easter.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-8014-5119-5 (cloth : alk. paper)
ISBN 978-0-8014-7824-6 (pbk. : alk. paper)
1. Finance, Public—Poland. 2. Finance, Public—Russia (Federation)
3. Fiscal policy—Poland. 4. Fiscal policy—Russia (Federation)
5. Post-communism—Economic aspects—Poland. 6. Post-communism—
Economic aspects—Russia (Federation) 7. Poland—Economic
conditions—1990– 8. Russia (Federation)—Economic
conditions—1991– I. Title.
HJ1213.E27 2012
339.5'209438—dc23 2012014475
Cornell University Press strives to use environmentally responsible suppliers and
materials to the fullest extent possible in the publishing of its books. Such materials
include vegetable-based, low-VOC inks and acid-free papers that are recycled,
totally chlorine-free, or partly composed of nonwood fibers. For further informa-
tion, visit our website at www.cornellpress.cornell.edu.

Cloth printing 10 9 8 7 6 5 4 3 2 1
Paperback printing 10 9 8 7 6 5 4 3 2 1
To the memory of EAGL81, my friend Rob Farrell

Contents
Preface ix
Introduction: Capital, Coercion, and Postcommunist States 1
1. Toward a Fiscal Sociology of the Postcommunist State 8
2. The Fiscal Crisis of the Old Regime 23
3. Politics of Tax Reform: Making (and Unmaking)
Revenue Bargains 51
4. State Meets Society in the Transitional Tax Regime 86
5. Building Fiscal Capacity in Postcommunist States 124
6. Taxation and the Reconfiguration of State and Society 152
Conclusions 187
Notes 197
Selected Bibliography 233
Index 235
vii

Preface
The [Russian] government should assure that in all public institutions
transparency and accountability prevail; debts are paid and arrears
eliminated; the tax system is fair, simple and efficient, based on
transparent laws and effective administration.
Michel Camdessus (St. Petersburg, 1999)
Man walks into a doctor’s office and says, “Doc, it hurts when I do
this.” Doctor replies, “Don’t do that.”
Henny Youngman
W hy invoke the words of Henny Youngman on the subject of the postcommu-
nist state, when his main body of work was in the area of intrahousehold rela-
tions? Because they capture so well the gist of the advice on tax collection that
capitalist custodians, such as IMF head Michel Camdessus, had for postcom-
munist governments, like Russia’s. Of course, Camdessus had a pretty good idea
of what Russia was doing or, in the case of tax collection, not doing, and he had
a clear image of what Russia should be doing. But what one does not get from
his remarks is a sense of why Russia was doing what it was doing. His advice
repeats the monotonous mantras, based on idealized depictions of capitalism
and governance in the West, which an international brigade of economic advisers
chanted to Eastern European public officials throughout the 1990s. Regarding
public finance, in particular, policy expertise invariably rested on assumptions
of public choice theory, a conceptual world of rational economic actors where
political and cultural phenomena were unwelcome intruders. By contrast, fiscal
sociology represented an alternative conceptual framework, where state finances
are enmeshed in a larger sociopolitical context, promising a richer explanation
of the fiscal fates of postcommunist states. But as the Russian state succumbed to
financial collapse, transition technocrats for whom fiscal sociology was as remote
ix