Why Anti-Corruption Will Fail in the Czech Republic

by Steven Gawthorpe

The new Czech Republic Prime Minister, Bohuslav Sobotka, has recently vowed to impose strict anti-corruption measures and pave the way for his country to adopt the euro by 2020. However, most of his anti-corruption rhetoric focuses on issues relating to fiscal compliance, such as promoting transparency in property ownership and reducing tax evasion. While these measures are necessary components of a national anti-corruption strategy, they should be part of a broader, more comprehensive anti-corruption reform agenda. Unfortunately, it is unlikely the Czech Republic will engage in any comprehensive reform outside of appeasing the European Union to adopt a new currency.

Czechs have few reasons to be optimistic about anti-corruption reform. A recent poll reports that 95 percent of Czech citizens believe corruption is prevalent at all levels of the government. Surveys conducted by the government illustrate that citizens believe corruption is the most urgent social problem facing their country, over unemployment and social security. Deep pessimism prevails as politicians have continued to ineffectively curb corruption for the last twenty years.

Present-day corruption in the Czech Republic has its roots in the neo-liberalization policies of the 1990s. These policies emphasized the importance of free trade as a driver of economic growth. They aimed to place state-owned assets back into the hands of private citizens and to return physical assets to individuals seized during the Communist era. In the Czech Republic, these policies were swiftly implemented with little thought to establishing the requisite regulatory safeguards to ensure a functioning market. Neo-liberal proponents knowingly tolerated exposure to corruption with the view that the social benefit emanating from the market would offset its social harm.

Political party representatives in particular abused the new privatization policies. Vaclav Klaus, former president and major proponent of neo-liberalization policies, granted amnesty to a number of individuals charged in high-profile cases of fraud and embezzlement of state-owned assets. More recently, former Czech Prime Minister Petr Nečas, of the ODS Civil Democratic Party, is being investigated for offering lucrative positions at state-owned companies in exchange for support for critical legislation.

If the Czech government is serious about curbing corruption within the country, it will be taking on a monumental task.Criminal acts of bribery do not cover all public sector employees and only as of 2010 have private sector employees become sufficiently defined. Some civil servants are not subjects of “passive bribery” (accepting a bribe as opposed to soliciting a bribe). The Group of States Against Corruption (Greco) has derided the Czech Republic for neglecting to cover all subjects of bribery as described in the Criminal Law Convention on Corruption.

Moreover, actually enforcing anti-corruption is an additional concern. Wire-tapping is not permissible in many circumstances and authorities consistently fail to follow through on accusations against politicians. Despite recent reform attempts, there are no specific whistleblower protection laws in the Czech Republic.

The dysfunctional regulatory environment allows private organizations and politicians to collude, sometimes with impunity. Metrostav, a state-owned construction firm privatized in the 1990s, is responsible for constructing Prague’s largest municipal project, the Blanka tunnel. This highly controversial project collapsed multiple times in recent years causing the death of one construction worker. Recent allegations of bid rigging and collusion spurred an internal investigation, which halted construction of the tunnel last December. However, despite allegations and public outrage, construction resumed early this year with an additional 10 billion crown (approximately $503 million) increase over the original municipal project’s budget.

Examples such as these explain the pessimism surrounding the government’s recent promises to curb corruption. In his recent remarks, the Prime Minister made a critical error by mentioning anti-corruption reform in the context of economic progress. Given that economic progress in the past led to increased corruption, such comments can only serve as a reminder for Czech citizens of how the political elite placed their version of the “market” before the needs of the people.

If anti-corruption policy is to be taken seriously, policymakers will need to treat the issue with the same seriousness as its citizens. They will recognize that Czech people want to live in a thriving society, not just a thriving economy. Creating and implementing a comprehensive anti-corruption strategy will be a necessary step towards rehabilitating the relationship between the government and its people.

Follow the author on Twitter:  @SteveGawthorpe 

About the Author

Steven Gawthorpe is a PhD student at Charles University in Prague, Czech Republic. His research specializes in public policy, corruption, and public procurement in Central and Eastern Europe.

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