Hungary outpaced the Czech Republic in reforms of the telecom sector during the first decade of transition. In the Czech Republic, prices remained low, competition limited and the state maintained ownership of the incumbent operator. Hungary, in contrast, experienced extensive privatization, liberalization of prices and some deregulation. This outcome challenges the assumption that institutional veto points (frameworks that constrain or enable political agents) manipulated by conservative bureaucrats hindered the initiatives of reform minded politicians in Hungary, while allowing reforms to occur in the also reforming Czech Republic. It is shown that the Czech telecom administration had only a few possibilities to block policy decisions through veto points. The slow reform process was rather a result of a conscious political strategy of maintaining control and accommodating a conservative constituency in context of a relatively sound economic environment. In Hungary, bureaucrats acting as agents of change pushed though the reforms despite opposition from politicians. This insight challenges the traditional picture of civil servants in post-communist systems as inherently conservative and anti-reform.

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