Paper/Speech Details of Conference Program for the 16th NISPAcee Annual Conference Program Overview Main Conference Theme Author(s) Vladimir Benacek Charles University Prague 1 Czech Republic Title Management of the policies of development in the Czech Republic: CzechInvest as an example of public administration competence File Paper files are available only for conference participants, please login first. Presenter Abstract This paper will be more general than just describing the evolution of Czech industrial policies, as practiced since 1990 until now by the Czech government. Using the theoretical underpinnings outlined by Rodrik /2004/, industrial policies represent a logical response in policy-making to the increasing globalisation of the market economies. They have their place in all countries. Nevertheless, the aspect of economic transition brings about a particular emphasis on some features aiming at: • enhancing the allocative efficiency of emerging infant markets, • speeding up the reallocation of economic factors sunk in industries without comparative advantages, • bringing viability to emerging new businesses, • decreasing the impediments to market transactions, • preventing the abuses of market imperfections, • establishing new alignments in supply and marketing chains, • offering incentives to innovations. The break-through in all these microeconomic policies of transition countries depend crucially upon the depth of restructuring of the public sector. In transition economies the bureaucracy of public administration resisted quite often the pressures for transformation and the vestiges of redistributive coalitions from the totalitarian past remained active. There are several strategies of transition to a new style of public sector governance. The establishment of elite agencies subordinated to some key political actor in the government but empowered with certain autonomy, is one of them. The evolution of industrial policies, emanating from objectively given requirements of economic environment and from the changing political scene, will be illustrated on the case of CzechInvest. CzechInvest was the most important agency of the Czech public administration in the management of industrial restructuring and competitiveness. It had a stormy history: a very early start that was soon inhibited in its scope by policies of market non-intervention. The outcome was a shocking paradox: the alleged market neutrality that resigned from practicing explicit industrial policies resulted in an unprecedented upsurge of implicit (indirect) industrial policies. We could even speak about the privatization of industrial policy instruments by power lobbies that ended in transfers approaching a half of the GDP. Starting since 1996 there was an upsurge of initiatives across political parties aimed at a fundamental revision of public industrial policies. CzechInvest was then singled out to become an experiment in the innovative approach to public administration. It adopted for its development managerial techniques of transnational corporations based on teamwork, managerial initiative and regularly monitored performance. CzechInvest's agenda extended quickly from investment consultancy and intermediation to the management of policies of investment incentives, industrial parks, innovation and development. After 2000 it became responsible for the policies supporting the supply chain linkages between foreign and indigenous firms, incentives for the enhancement of spillovers from innovative firms, support of the domestic small and medium-sized firms, and the distribution of European Funds. In this paper we will deal not only with what happened in the management of industrial policies but we will also explain why it happened and how it was organised.
