WASHINGTON — The defeat of the Kaczynski twins’ Law and Justice Party (PiS) in Poland brought sighs of relief across Europe. But, as Donald Tusk’s new government assumes office, it is important to learn the lessons that their defeat holds for all of us.
Many governments waste good economic times by postponing the reforms needed to build a prosperous future. The PiS-led government, elected in 2005, inherited a fast-growing economy, but did nothing to strengthen that legacy. Instead, privatization was blocked, while fiscal reforms and deregulation remained paper proposals.
Indeed, the Kaczynski government embarked on a program of antireform. The separation of powers (an independent judiciary and central bank) was undermined in favor of a “strong” state. The PiS captured the public media; the general prosecutor’s office was politicized and, with the use of the media, was turned into a tool of party propaganda aimed at showing that Poland was ruled by malicious hidden forces that cheated Poles and kept them poor.
Anyone who disagreed with this diagnosis or criticized the PiS’ methods, particularly those used by its leader, Jaroslaw Kaczynski, was promptly classified as belonging to the uklad. No one was spared. Indeed, Lech Walesa and Wladyslaw Bartoszewski, the Polish Mandela, were ruthlessly attacked.
Contrary to popular cliche, the PiS victory in 2005 did not result from “reform fatigue,” since there were not many reforms implemented in 2000-2005 (except for an ambitious but partially blocked attempt at fiscal consolidation).
This explanation seems dubious elsewhere, too. In Slovakia, the reformist leader Mikulas Dzurinda won the 1998 elections after having implemented a tough stabilization program, and he could have continued to govern after the 2006 elections if not for disagreements in his coalition.
In the Czech Republic, a reformist government was elected in 2006; in Hungary, political divisions rather than reform fatigue dominates electoral campaigns.
Of course, it is not easy for reformers to win elections. On the contrary, reforms usually are undertaken only when the signs of an impending crisis are so strong that it is increasingly difficult to ignore them, or after the crisis has already “educated” voters. (However, if the crisis follows reforms, populist politicians may win by blaming the reforms, instead of their incomplete nature, as in Argentina.)
Reformers can win elections if they are better at public communication than the populists. Bad policies are, more often than not, easier to sell than good ones.
In Poland in 2005, the issue was mainly corruption. The PiS jumped on the anticorruption bandwagon and strengthened its appeal by linking the fight against corruption to the vision of hidden forces supposedly perverting Polish society and democracy. If not for that, the results of the 2005 elections would most likely have been quite different.
To criticize anticorruption campaigns is risky, because words can be twisted to imply indifference.
Therefore, let me present my anticorruption credentials: As deputy prime minister in 1999 I was the first Polish politician to ask the World Bank to prepare a report on corruption in Poland and ways to eradicate it. In my public life, I emphasized eliminating discretionary regulations — the main source of both inefficiency and corruption. But we should not be blind to what can happen when political demagogues hijack the anticorruption card.
Interestingly, all the available measures of actual corruption were already declining before the Kaczynski twins were elected. For example, the index of the frequency of paying bribes, calculated by the World Bank and EBRD, was 2.7 in 1999 and 2.03 in 2005 (the value of 1 is the minimum). The corruption tax (the percentage of sales paid in bribes) declined from 1.22 percent in 2002 to 0.7 percent in 2005.
Poland now has a huge gap between the levels of perceived and actual corruption. On perception, it fares much worse than Slovakia, the Czech Republic, Hungary, and Greece, while it fares better — or at least not worse — on indicators of actual corruption.
For example, the percentage of respondents admitting to paying bribes in 2006 was 5 percent in Poland and 17 percent in the Czech Republic and Greece. The index of the frequency of paying bribes in 2005 was 2.03 in Poland, 2.22 in Slovakia, 2.09 in the Czech Republic, and 2.37 in Greece. The corruption tax in 2005 was 0.7 percent in Poland, 0.93 percent in Slovakia, and 0.63 percent in Hungary.
Of course, Poles should not settle for today’s levels of corruption. Instead, the battle with corruption should aim at removing its root causes: the scope of the discretionary public sector and the suppression of market forces. This is the only path that promises both less corruption and more economic growth.
Combating corruption through increased punitive action, while leaving intact a bloated and discretionary public sector, will only paralyze public officials, delay important decisions, and play into the hands of cynical demagogues and political fanatics.
Leszek Balcerowicz, a former deputy prime minister and governor of the Central Bank in Poland, is currently a distinguished visiting fellow at Brown University and at the Center for European Policy Analysis in Washington. Copyright 2007 Project Syndicate (www.project-syndicate.org)