Political Co-ordination and Corporate Control of Economic Activities by the State

In a period when the globalisation of the World is recognised by all, and systemic problems are emerging on a global scale. A search for systemic solutions is on the agenda. This paper offers a critical in depth discussion of the political co-ordination in Central and Eastern Europe before 1989 implemented through the Central Plan, and compares this with other models of regulation of economic activities and administrative intervention. It builds on public administration theory and introduces a model that describes the network of administrative actors in the socialist economies before 1989 that engaged in political and economic decision making and policy implementation at macro level. The concept of ‘political co-ordination’ of economic activities is introduced, and it is argued that it represents more adequately the co-ordination and control mechanisms within the former Centrally Planned Economies. A critical examination of the administrative links before 1989 reveals the dynamic system of negotiation and bargaining between firms and government agencies that took place in the past. The uncertainty of outcomes of these former negotiation practices is compared with other practices of public administration and management in developed market economies. The regulation by the state is interpreted as one of the main structuration factors that affects the fundamentals of transactions and institutional relations within a particular socio-economic system. The paper attempts to highlight the role of the institutional factor in co-ordination of economic activities under the Central Plan. Our critical analysis of this experience establishes foundations for the analysis of the public administration practices in developing countries and other social systems facing the challenge of industrialisation and market reform.