The Breakup of Czechoslovakia
and the Calculus of Consociationalism

Thomas Ambrosio
University of Virginia

Paper presented at the Columbia University Graduate Student Conference on "Perspectives on Political and Economic Transitions after Communism" -- Columbia University, 1 March 1997
Abstract

This essay examines the collapse of Czechoslovakia within Arend Lijphart's cosociational democracy model. Utilizing James Buchanan and Gordon Tullock's theory of constitutional change, I recast Lijphart's framework into a deductive and testable form. I apply this reformulated theory to the case of Czechoslovakia and argue that rather than accepting the high decision-making and indirect-external costs that would be borne by society under a consociational system, Václav Klaus, the winner of the 1992 election in the Czech region, choose the breakup of the state.
Table of Contents
  • Introduction
  • Consociationalism
  • Critique of Lijphart
  • Buchanan and Tullock
  • The Calculus of Consociationalism
  • The Failure of Consociationalism: Czechoslovakia
  • Conclusion
  • Endnotes
    I. Introduction

    The collapse of communism in Eastern Europe has released two forces within the region: nationalism and democracy. In states with civic-based identities, nationalism and democracy can reinforce each other and provide for the unity of the nation-state. [1] In ethnically divided polities, the combination of these two forces can percipitate communal conflict and the eventual collapse of the state. [2] In the interests of preserving states and adverting ethnic violence, various institutional arrangements have been proposed. One notable design is Arend Lijphart's consociational model which maintains that through accommodation and unanimous decision-making processes, societal cleavages can be prevented from becoming violent. Some of consociationalism's supporters have argued that their model can and should be 'exported' to ethnically divided states. [3] The political systems of numerous states in Europe and the Third World have been analyzed within the consociational framework.

    The consociational model suffers from one major flaw: its inductive origins do not allow for clear, testable hypotheses about the creation of consociational political systems. By utilizing James Buchanan and Gordon Tullock's deductive and rational choice framework on the formation of the general rules of collective decision-making, I am able to create testable hypotheses for the consociational approach.

    I will analyze the collapse of Czechoslovakia within the reformulated consociational model and show that the disintegration of the state was caused by the incompatible preference structures of the Czech and Slovak winners of the 1992 Federal Assembly election. Rather than accept the high decision-making and indirect-external costs that would be borne by the society under a consociational system, Czech political elites choose the breakup of Czechoslovakia.

    II. Consociationalism

    The concept of consociationalism was put forth as a third alternative to the standard dichotomy between centripetal (homogeneous and stable; e.g., Anglo-Saxon) and centrifugal (fragmented and unstable; e.g., Continental European) democracies during the 1960s. [4] The 'consociational' democracies -- the classic examples being Austria, Switzerland, the Netherlands, and Belgium -- were considered aberrations and combined elements of the two by existing as highly fragmented but stable political systems. In these states, policies are adopted by a consensus of the major groups in society. Accommodation rather than confrontation is the norm. Through non-adversarial politics, no one segment in society dominates any other. Issues are resolved to the mutual benefit (or discomfort) of the several parties and segmental elites have broad powers to forge agreements. Majoritarianism is replaced by unanimity.

    In highly fragmented polities, the thought of remaining a permanent minority in a majoritarian system is unacceptable. Where segments are salient, one-man, one-vote elections in a winner-take-all setting amounts to the permanent political domination of one group over another. Where this is the case, majoritarianism often leads to the violation of minority rights, ethnic and racial polarization, and civil war. The latter is extremely important because groups who are being continuously excluded from power will, if they are able, attempt to leave the system through secession and accompanying communal violence. Thus, consociationalism is seen as a way to avoid these negative outcomes, preserve a political system, and still maintain a democracy.

    If a consociational political system is the dependent variable, "deliberate efforts to counteract the immobilizing and unstabilizing effects of cultural fragmentation" by elites constitute Lijphart's independent variable. [5] Although the institutional arrangements can vary -- but will undoubtedly include some combination of joint executive power, minority veto, autonomy, and proportional representation -- Lijphart identifies four necessary conditions for a consociational system; elites must: (a)understand the dangers of political fragmentation (i.e., the break-down of the system); (b)have a positive commitment to maintaining the system; (c)be able to work together to transcend their parochial differences; (d)have the will to compromise and accommodate their divergent interests. [6] These four necessary conditions can be collapsed into two broad areas: a commitment to the system and the ability to compromise and forge mutually acceptable agreements.

    Because these patterns of elite behavior can be learned and put into practice through the determination of elites, the consociational model can be 'exported' to numerous fragmented states throughout the world. As Lijphart states: "A central proposition in consociational theory is that a consociation can be established and maintained as the result of a self-negating prediction: the segmental leaders' realization that competitive behavior will lead to serious conflict and their desire to act jointly to avert this unhappy outcome -- [it is a] rational and purposive response to the facts of pluralism and interdependence." [7] Although Lijphart identifies a number of 'favorable factors' and 'conductive conditions' for consociationalism, [8] they are not necessary. While there is some question regarding how important these additional factors are for the establishment and maintenance of a consociational political system, Lijphart argues that elite decisions, after cost-benefit calculations, are the critical factors involved and that although some states and situations are more ripe for the development of a consociational system than others, the concept is unquestionably exportable to a variety of historical settings and regional environments.

    III. Critique of Lijphart

    Since this essay is examining the creation of consociational regimes, I will only focus on Lijphart's failings in this respect. Harry Eckstein provides a useful framework with which to view 'theories'. As Eckstein argues, we should conceive of theories in terms of their goals: rulefulness (hypotheses in an if-then form); reliability; testability (and thus, falsifiability); predictability; and parsimony. [9] Unfortunately, Lijphart fails on each of these counts: a clear, parsimonious, testable if-then hypothesis is difficult to draw out of Lijphart's inductive studies. In simple terms, Lijphart does not sufficiently explain how a consociational system is established. While this statement is harsh, it should be immediately qualified by stating that he does point the way toward an explanation.

    First, Lijphart does a good job at illustrating the dangers of majoritarianism from the perspective of ethnic minorities. Unless the majority ethnic group is politically fragmented, there is no possibility that the minority will achieve a say in the government unless the dominant group lets it. Second, elites must understand the dangers of political fragmentation. This understanding can come from either past experiences or beliefs about future political unraveling. Lastly, Lijphart's focus on elites and the exportability of the model indicates that elites make a conscious choice to adopt (or not to adopt) a consociational arrangement. The long quote above makes it clear that consociationalism is a 'rational and purposive response to the facts of pluralism and interdependence'. It does not simply develop, nor is it the culmination of a long, historical process. Rather, consociationalism is a choice.

    This suggests a rational choice explanation for the acceptance of consociationalism. However, Lijphart does not provide a real sense of what goes into the cost-benefit analyses made by elites prior to adoption nor does he provide us with truly testable hypotheses. One of the critical problems is the fact that all cases of past communal trauma do not lead to consociationalism. Similarly, some consociational arrangements are explicitly rejected despite the demonstration effects of problems in other ethnically divided polities. Lijphart does not give us any substantive indication of why some polities will form consociational systems and why others do not except by implying that the elites simply did not make that choice. Essentially, what we have is a black box which Lijphart has seemingly not considered it necessary to open. By reframing Lijphart in a more deductive and rigorous manner within Buchanan and Tullock's framework, I am able to provide testable hypotheses for the adoption of a consociational political system.

    VI. Buchanan and Tullock

    Buchanan and Tullock's work provides a deductive and rational choice framework for analyzing the creation of and changes to constitutional provisions. [10] Although their overall model has many permutations and is often quite dense, the actual calculus involved is quite simple. Individuals enter into collective action in order to reduce external costs (i.e., negative externalities imposed by other individuals) and increase utility (assuming, of course, that the action can not be done more effectively by one's self or privately). Entering into a collective project requires a set of decision-making rules. Every constitutional framework imposes decision-making costs (i.e., the cost of bargaining and reaching agreements) upon the members of the collective. [11] The organization itself can impose external costs upon individuals through its collective actions. Thus, individuals have two issues to consider when forming a constitution: external and decision-making costs.

    Since the purpose of collective action is to reduce costs, the rational individual will choose that particular constitutional arrangement which fulfills this goal. However, external and decision-making costs often function as a trade-off of each other. [12] One can guarantee that the actions of others will not impose external costs upon him or her by requiring unanimity for all decisions; i.e., if the individual can block any policy, he can prevent any unwanted actions from being taken. However, the decision-making costs involved in requiring unanimity are extremely high. External and decision-making costs are inversely related; as one decreases, the other increases. As the authors state: "By agreeing to more inclusive rules, [an actor] is accepting the additional burden of decision-making in exchange for additional protection against adverse decisions. In moving in the opposing direction toward a less inclusive decision-making rule, the individual is trading some of his protection against external costs for a lowered cost of decision making." [13] The calculus of constitution-building is to find the 'optimal' or most 'efficient' decision-making rule for the activity or activities that one is considering.

    Although Buchanan and Tullock's reasoning appears sound, they appear to assume a roughly 1:1 trade-off between these two costs. This may not necessarily be the case. They downplay the possibility that high decision-making costs can, in themselves, impose external costs upon actors. In their discussion of the prospect that a 'qualified majority' (i.e., requiring a vote of over 50%+1 for a given policy, such as a 2/3 super-majority) amounts to the rule of the minority over the majority, they use an example of a hayride which comes to a fork in the road. Of the one hundred people on the hayride, 74 want to go right and 26 want to go left. A 75% qualified majority rule is in effect for this decision. Given the preferences of the 100 people, neither road is taken unless a compromise is reached. Buchanan and Tullock argue that this is not minority rule because there is a distinction between taking action and blocking action: "it represents the difference between the power to impose external costs on others and the power to prevent external costs from being imposed." [14] However, the two authors do not consider the possibility that inaction may, in itself, impose (indirect) external costs upon individuals disproportionately. Expanding on their example, suppose one of the 74 who want to go right needs to go to the hospital immediately (or else the individual will die) and that the hayride can not get there by going left. While the 26 do prevent external costs to themselves, inaction in this case will impose severe external costs (albeit indirect) upon the sick individual. This expansion of Buchanan and Tullock's example illustrates that decision-making and external costs are not compartmentalized units, but rather a feedback loop exists from one to another.

    V. The Calculus of Consociationalism

    The broad outlines of Lijphart's consociational model can be placed within Buchanan and Tullock's theoretical framework with little modification of the latter and to the improvement of the former. In fact, Buchanan and Tullock appear to have foreseen such an application. In discussing the trade-offs between external and decision-making costs, the authors state that the rate of increase of the latter will vary in different polities: the more homogeneous in interests, the less decision-making costs will be incurred by a more inclusive constitution. Furthermore, since the interests and preferences will likely be fairly similar, the external costs incurred by a minority will be less, regardless of the decision made. The opposite is true for more heterogeneous polities:
    By contrast, the community that includes sharp differences among individual citizens and groups cannot afford the decision-making costs involved in near-unanimity rules for collective choice, but the very real fears of destruction of life and property from collective action will prompt the individual to refuse anything other than such rules. Both elements of the costs of collective action remain very in such communities. [15]
    In the highly segmented polities that are Lijphart's focus the individuals of Buchanan and Tullock's analysis are replaced by the elites of the several segments. And as we will see, the logic remains the same.

    In order to more accurately apply Buchanan and Tullock's framework to the situations Lijphart is dealing with, a concept that the two authors did not include must be introduced: system breakdown. In response to real or potential domination, a minority segment within a polity has three choices: (a)do nothing (this is often because of sharp power differentials between majority and minority rather than an actual preference for inaction); (b)push for a more consociational system (i.e., reduce the external costs of remaining within the system through institutional reform); or (c)attempt to withdraw from the system. The third choice, withdrawal, leads to the breakdown of the political system if successful. This political collapse imposes costs upon the members of the polity. These can stem from the mundane, such as the costs of building new political institutions, to the more extreme, such as the result of communal violence. These costs are also often parceled-out disproportionately in the society; i.e., some groups may be harmed more by the collapse of the state than others. Thus, the costs of system-breakdown must be taken into consideration when chosing between political outcomes.

    In highly segmented polities, the potential external costs are very high. Interests are seen as mutually exclusive and politics operates as a zero-sum game. In extreme cases, feared external costs may include repression, expulsion, or even genocide. In ethnically divided systems, minorities may demand some type of consociational arrangements to protect themselves against domination by the majority. However, as Buchanan and Tullock illustrate, decreasing the possibility of external costs results in increased decision-making costs. In a consociational system, since consensus is required, decision-making costs are likely to be extremely high because parties must bargain and come to a mutually agreeable policy on each issue. Here is the trade-off: while consociational political systems eliminate the possibility that the state will take action against the will of any segment, the system tends toward immobilization unless the sides have the political ability and will to forge agreements. This potential for paralysis has been one of the primary criticisms of Lijphart's model. [16]

    The decision to create a consociational system is a determination made in relation to the costs of three possible political outcomes: majoritarian (M), consociational (C), and system breakdown (B). [17] Each represents a basket of decision-making, direct external, and indirect-external costs. The total costs involved in each choice are determined by the perception of the actors involved but are dependent upon the following guidelines. In a majoritarian polity, decision-making costs will be lower than in a consociational system, but external costs may be high (dependent upon the fragmentation of the political system and the policies of the majority). Consociational political structures have low direct external costs but will have very high decision-making costs which, in turn, may impose significant indirect-external costs. Thus, external costs (albeit indirect-external costs) still exist within a consociational system. Lastly, there are no decision-making costs involved in system breakdown since this outcome means that no decisions are being made within a united polity. However, the collapse of a political system may impose external costs upon the population as the result of communal violence or simply the logistics of political divorce. These costs are usually applied disproportionately. In some rare cases, political breakdown may have very little costs attached to it. When a decision is made to give consent to a political system, segmental elites will compare the choices before them, order them according to the relative total costs potentially imposed upon their segment, and select the one which minimizes these costs. There are six permutations of the rank-orderings of the above-mentioned outcomes:

    B > M > C

    M > C > B

    C > M > B

    B > C > M

    M > B > C

    C > B > M

    A given group can be said to 'possess' one preference structure or another.

    It is important to note that the relative costs of the three possible outcomes are based upon the perceptions of the actors. As a result, they may not accurately predict the costs involved with a certain outcome. There is always some element of risk involved in any political decision and actors must keep this in mind when making choices. Even if one's initial prediction regarding the costs of a particular form of government is correct, environmental factors can change and readjust costs. Furthermore, one's choices may also be dependent upon what one perceives to be the preference structure of the other party or parties. If one group believes that the other will not secede regardless of the political structure of the state (i.e., if the first group believes that the other is B > C > M or B > M > C), then the first may attempt to impose its will upon the other. Along these lines, a group may have an interest in misrepresenting their preference structure to increase its bargaining power. Finally, it should also be remembered that this decision-making process is not performed independently, but rather in a strategic context. The final outcome is dependent upon the preferences and choices of other actors and their relative bargaining power. Only when we take into account other actors can we truly explain political outcomes. With this theoretical framework in place, it is now possible to turn to the empirical case.

    VI. The Failure of Consociationalism: Czechoslovakia

    There is an old proverb which goes: "Be careful what you wish for, you just might get it." Vladimír Meciar, the leading Slovak politician and winner of the June 1992 Czechoslovak elections, campaigned on a mixed program. On one hand, he campaigned largely as a Slovak nationalist, arguing for a reaffirmation of Slovak national identity and "sovereignty" for the Slovak people. [18] On the other, he "promised the best deal for Slovakia in a more decentralized confederal state." [19] Instead, he was unceremoniously informed by Václav Klaus, the Czech winner on the 1992 election, that the federal state of Czechoslovakia would no longer exist and, not in so many words, that the Slovaks could assert their national identity in their own, independent state. On 1 January 1993, Czechoslovakia ceased to exist.

    This section illustrates consociational failure. Although the debate was framed in terms of a centralized v. decentralized state, the real issue was whether or not the Slovaks would be able to block the process of economic reform in Czechoslovakia. Not only did Meciar demand that the Slovaks have a veto over any reform package, but the federal system itself necessarily required a consensus-based government. The 1992 parliamentary election results dictated a coalition between Klaus and Meciar. Rather than allow fundamental disagreements between the Czechs and Slovaks to stand in the way of his economic reforms, Klaus moved to dissolve their common state. In theoretical terms, Klaus refused to pay the high decision-making and indirect-external costs of consociationalism. In Klaus' calculus, the breakup of Czechoslovakia was less costly than a consociational system.

    It is impossible to understand the dynamics of the Czechoslovak collapse without a sense of the often uneasy relationship between Czechs and Slovaks in their joint state. Created in the aftermath of the First World War, Czechoslovakia has been marred by disputes about its institutional structure. The 1920 unitary constitution greatly favored the Czechs who enjoyed a 2:1 demographic advantage over the Slovaks. Because many Slovaks believed that they were being taken advantage of by the Czechs, a large number of them supported the creation of a fascist puppet regime during the Second World War. After fascism was defeated, the postwar communist republic resembled an 'asymmetrical' federation in which "a federal government...[which] ran affairs for the entire country and assumed ultimate sovereignty" existed uneasily with "a national council that nominally ran affairs within the Slovak republic." [20] This asymmetrical model served as a compromise between the Czech desire for centralization and the Slovak aspiration for autonomy, but was seen as not going far enough toward true federalism. After the Prague Spring in 1968, there was a conscious effort to develop the federal structures of Czechoslovakia and "accord political recognition to the existence of two distinct Czech and Slovak national groupings." [21] This also failed to satisfy many Slovaks who perceived the state as too heavily Czech-dominated. The collapse of communism in 1989 opened the door for a complete overhaul of the Czech-Slovak political relationship. Problems developed early as evidenced by the row over the name of the state in the spring of 1990. [22] Negotiations on Czechoslovak constitutional reform began in the summer of 1990 and were finally suspended in March 1992 when little substantive progress was made. [23] It was hoped that the June 1992 parliamentary elections would produce a government that could resolve these issues. These hopes were quickly dashed.

    In order to fully understand the 1992 parliamentary elections, it is necessary to first examine the federal institutions of Czechoslovakia. The Czechoslovak Federal Assembly consisted of two houses: the Chamber of People, apportioned on the basis of population; and the Chamber of Nations, evenly divided between the Czech and Slovak Republics. In order to get into the assembly, a party needed over 5% in only one Republic, not the whole country. This system ran counter to all-Czechoslovak parties because a party's participation in the assembly was based upon their performance on the republic level. For example, an all-union party that achieved less than 5% of the vote in the Slovak republic would not be able to seat any members in parliament from the Slovak delegation regardless of how well the party did in the Czech republic. This institutional framework produced "two party systems, each one concentrated in one of the two Republics within the larger federation" and constructed political parties "within, not across the salient division in society." [24]

    The voting procedure in the Federal Assembly complicated the condition of the two party-systems. For most important issues, 60% majorities of both the Czechs and Slovaks in the Chamber of Nations were required. As a result, any government in the Chamber of Nations would require an inter-Republic coalition. A minority of 40% within either the Czech of Slovak delegation to the Chamber of Nations could block the adoption of major bills. This institutional framework was ripe for paralysis.

    The 5-6 June parliamentary elections had two clear winners. In the Czech region, the Civic Democratic Party coalition with the Christian Democratic Party (ODS-KDS) prevailed with 33% of the vote in both Federal Assembly chambers. In Slovakia, the Movement for a Democratic Slovakia (HZDS) also achieved 33% of the vote. Because many of the forty-odd parties did not reach the 5% barrier, both the ODS-KDS and the HZDS received more seats in the Chamber of Nations than their percentage of votes: ODS-KDS were apportioned 37 out of 75 of the Czech seats (49.33%) and the HZDS received 33 out of 75 of the Slovak seats (44.00%). Thus, both the ODS-KDS and the HZDS had effective veto power. [25] As a result, any functioning Czechoslovak government would require consensus between these two parties. However, the leaders of the Civic Democratic Party and the Movement for a Democratic Slovakia, Václav Klaus and Vladimír Meciar respectively, possessed diametrically opposed positions on most issues.

    Václav Klaus's economic philosophy can be described as "ultra-Thatcherite," [26] but is best conceived as being in line with that of Milton Friedman: a strong belief in a western-style, capitalist, market economy. To this end, Klaus, as Czechoslovak Finance Minister, "set out on an unprecedented privatisation programme, reduced [Czechoslovakia's] budget deficit, increased foreign reserves and brought inflation down to single figures." [27] During the campaign, Klaus called for a continuation of his tough economic policies and a tighter federation with more powers concentrated at the center. He "continually maintained that there could be no exceptions to the privatization process and the transition to a free-market economy." [28] As he would later say, Czechoslovakia "had already crossed the rubicon in the transition to a new economic system" and that nothing should or could stand in the way. [29] The Czechs had seen meaningful benefits from Klaus's economic reform and privatization policies and desired to continue upon the path of a fast-paced transition with the belief that their situation would get even better as they approached an authentic market economy. As a result, it was little surprise that Klaus was victorious in the Czech republic.

    Meciar's position, on the other hand, reflected the Slovak's deep concern with Klaus's reforms. Although the economic transition was generally beneficial to the Czechs, there was a great disparity in the impact of these reforms in the Czech and Slovak republics. [30] In short, the economic policies that were benefiting the Czechs were perceived by the Slovaks to be injurious to them. Already in 1990, Slovak demonstrators called "for more independence in economic policy as well as compensation for the disparate impact of the transition in Slovakia." [31] Many Slovaks felt that the pace of the transition was too fast, addressed only the needs of Czechs, and was not concerned with their economic position or circumstances. Meciar led the fight against the federal government "arguing that the [Slovak] republic's economic problems stemmed from federal economic policies that were orchestrated by the 'Prague intellectual ghetto'." [32] In order to address Slovakia's economic problems, Meciar "promised to review privatization, spur economic growth through deficit financing and massive state investment and revitalize the former Comecon trading bloc." [33] Furthermore, Meciar called for a declaration of Slovak 'sovereignty' and a transformation of the Czechoslovak state into loose confederation with both republics possessing international legal personality. [34]

    Given the results of the 1992 elections and the institutional framework of Czechoslovakia, both Klaus and Meciar would have to reconcile their very different positions on the nature of economic reform and the future of the state. In order for the government to function, it would have to assume a consociational character. The post-election negotiations between the two sides demonstrated that this was impossible.

    Klaus and Meciar met four times in June and July in an effort to find common ground and constitute a government. [35] It immediately became obvious that the two sides had irreconcilable differences. Meciar demanded that Slovakia be recognized as an international legal person (with a seat in the United Nations) and have its own economic reform program. He proposed a confederation between the Czech and Slovak republics to consist of a "joint market, financial administration, and defense" and mechanisms for coordination of foreign policy. [36] Klaus, on the other hand, would have none of this. As Meciar would later say, he was rather surprised by the "toughness" by which Klaus entered into negotiations. [37]

    Klaus was adamant on the fact that the Czechoslovak federation would have to be a true union and that the economic transition would have to continue. Any move away from a unified economic reform program would have disastrous effects on the Czech economy. [38] Klaus believed that "decentralization [of the state]...might damage policy coherence and further complicate an already complex transition effort" and that "the delay in resolving the Czech-Slovak relationship effectively held hostage important components of economic and political transitions." [39] In the past, Klaus had stated that if the Slovaks did not accept the rapid pace of the transition toward a capitalist economy, they should feel free to seriously consider leaving Czechoslovakia altogether. [40] Given the structure of the Czechoslovak Federal Assembly, Czechoslovakia's government would be deadlocked and nothing would be accomplished if the Slovaks stayed in the federation and Meciar refused to change his positions. For Klaus, this was unacceptable. At a press conference in mid-June 1992, Klaus argued that the possibility of political and economic "chaos" developing in Czechoslovakia was very real if the Slovaks stayed within the state: the Czechoslovak (and especially the Czech) people "cannot afford to lose a single day" and that this current period of "uncertainty" would cause the economic transition would suffer "considerably." [41]

    Many Czechs (including Klaus) also believed that they would reap economic benefits if they were separated from the Slovaks. If the Czechs and Slovaks were to split, the subsidies that the Czechs had given to the Slovaks since the postwar period in the form of capital transfers, social programs (especially unemployment benefits that were paid by the federal government and disproportionally helped Slovaks), and non-market pricing for some commodities and services used by Slovaks would end. Although the amount of the subsidy is a matter for debate (Slovaks underestimating it and Czechs often overestimating it), the OECD estimates it at least 7 percent of Slovakia's 1992 GDP. [42] This amounted to approximately a $700M-$1B Czech subsidy of Slovakia. [43] Carol Leff nicely summarizes Klaus' and the Czechs' thinking on the negotiations with their Slovak partners:

    The attractiveness of cutting one's losses and moving ahead more freely with the other elements of the triple transition ultimately hardened the Czech position to the point where it was clearly a matter of tighter federation or no federation at all. It is primarily this consideration, and particularly the freeing of Klaus's cherished economic reform agenda from political constraints, that appears to have shaped his loss of interest in further negotiations with the Slovaks after the 1992 elections and led to the final breakdown of [Czech] efforts to preserve the state. [44]
    It should not have come as too much of a surprise to Meciar and the Slovaks that Klaus simply gave them an ultimatum: either preserve Czechoslovakia as a true federation and continue his style of economic reforms or dissolve the state. In the end, Klaus's thinking filtered down to the Czech people. A little under two months before the actual dissolution of the state, an opinion poll was conducted throughout Czechoslovakia which found that more Czechs than Slovaks considered the division of the federation to be necessary. [45]

    After several weeks of fruitless negotiations, all the two sides could agree on was the peaceful division of the state. [46] Some have argued that both sides had entered into the negotiations as if they were haggling at "an oriental market, with both sides setting high initial prices in order to be able to later knock them down." [47] However, this section has shown that the Czechs and Slovaks had irreconcilable positions and that little room for compromise existed. While it is possible that Klaus could have waited for Meciar to make some key concessions (the softening of the Slovak position as the end of Czechoslovakia quickly approached is evidence that this plan might have worked), it was clear that Klaus believed that any delay would have been costly to the Czech economic transition. To put it in the theoretical terms discussed in the previous sections, Klaus refused to allow the high decision-making costs to impose indirect-external costs upon the Czech people. Klaus' preference structure closely resembled C > B > M (though some more cynical observers may argue that Klaus was never serious in his attempt to negotiate a deal with Meciar and that his preference structure was really C > M > B). [48]

    I believe that if at all possible, Klaus would have liked to have kept Czechoslovakia together. Although he was not exactly advocating a majoritarian system (designated by 'M'), his vision of a post-election Czechoslovakia was one in which the central authorities (meaning the Czechs) would not be blocked by parochial interests (meaning the Slovaks) from pursuing a swift transition to the market economy. If the center-right Slovak parties had been able to garner enough votes in the Chamber of Nations, Klaus would have utilized his parliamentary majority to continue his reform package regardless of its disparate effects in the Czech and Slovak republics. There also existed an understanding that, despite the economic benefits for the Czechs with a political divorce, there would be some economic costs associated with creating their own institutions (though they mostly inherited the former federation's structures) and loss of trade with Slovakia. [49] Furthermore, the emotional attachment to the seventy-four year old federation should not be forgotten. Václav Havel, former president of Czechoslovakia and current president of the Czech Republic, had stated on several occasions that he believed that "a common state is better than two republics." [50] Klaus, whose wife is Slovak, also expressed regrets about the division of the state but added that the differences between the two sides had made it inevitable. [51]

    If Klaus was unable to convince his Slovak counterparts to accept his vision for the state, he would prefer that Czechoslovakia be dissolved. This position is supported by numerous statements made by Klaus himself and Meciar. According to Meciar, Klaus gave him two alternatives: "The preservation of the present federation or the complete disintegration of the state with the liquidation of all relations." [52] Although there were some costs for the Czech republic if Czechoslovakia dissolved, the Czechs predicted to receive substantial economic benefits once independent. [53] Furthermore, unlike the former Yugoslavia where the dissimilarity between republic and ethnic borders left many individuals outside of 'their' republic and thus sparked the civil wars of Yugoslav succession, Czechoslovakia did not possess an intermixture of ethnic groups: only one percent of the Slovak Republic are Czechs and only 3-4 percent of the total population of the Czech Republic are Slovaks. [54] The Czech and Slovak minorities did not appear to feel threatened by the dissolution nor demanded a revision of the borders. Most were recent 'immigrants', lived in Bratislava or Prague, and understood that they could return to their state at will. In fact, many individuals in both minority groups agreed to become citizens of the republic in which they resided. [55] Thus, the high costs of system breakdown seen in the former Yugoslavia (due to the high potential for communal violence) was not a legitimate threat for the Czechs.

    Lastly, as argued above, Klaus believed that the costs of remaining within the same state as the Slovaks was very high. This would mean that the Czechs would have to effectively enter into a consociational arrangement with the Slovaks, represented by Meciar. As the Economist put it, if the Slovaks remained, "Czechoslovakia would have at best a weak government and a hung parliament, at worst total chaos." [56] The best case scenario, a stalemated parliament, would impose high decision-making and indirect-external costs upon the Czechs. Klaus' economic reform package would suffer and the paralysis of the federal government would likely scare investors. This was totally unacceptable to Klaus who, as his negotiation position and public statements make clear, believed that the end of the seventy-four year old federation was less costly than a Klaus-Meciar consociational government.

    Meciar's preference structure is not as easy to infer. At first glance, it appeared that Meciar held the polar-opposite cost schedule as Klaus: M > B > C. However, there was some equivocation by Meciar which may lead one to believe that he was merely bluffing (i.e., his real preference structure was B > M > C) and that he would have accepted the continued existence of Czechoslovakia and Klaus' reforms with some symbolic concessions made to the Slovaks (as well as some compensation for the adverse effects of the reform package in Slovakia). The high costs of Slovak independence may have been more costly than what the Slovaks would have felt if they remained in the union. Nevertheless, Meciar's campaign rhetoric and Klaus' immediate calling of Meciar's bluff (if, indeed, it was a bluff) locked him into a position which led to the independence of Slovakia.

    When Meciar went to Brno immediately after the elections to negotiate with his Czech counterpart, "Meciar thought he had won a place at the negotiating table to work out a Czechoslovak 'Maastrict' to put the ailing federation on a new footing." [57] Although there is some question regarding whether his 'confederation' plan would necessarily require a breakup of the state, "neither he nor his party ever publicly called for Slovakia's independence or for splitting the federation" during the election campaign. [58] Given the external costs that Klaus' rapid economic transition was imposing on Slovakia, Meciar wanted a veto over any further reforms and a negotiation to roll-back some of what had already been done. Meciar's nationalist rhetoric fit well with a consociational option because only such a system would upgrade the Slovaks' status within the federation and allow Czechoslovakia to become truly binational in policies as well as name. A consociational political arrangement would ensure that the Slovaks could protect their interests against what they considered the "Pragocentrism" of federal government policies.

    When Meciar presented his plan to the Czechs Klaus quickly rejected it; and because of Klaus' preference structure, the debate quickly shifted to the dissolution of the state. Meciar's nationalist campaign rhetoric then constrained him from making any substantive concessions to the Czechs. In an interview in the Czech daily Mlada Fronta Dnes, Klaus discussed Meciar's predicament. In response to a question regarding whether Meciar, who appeared at the time to be retreating from his initial positions on the economic transition, could make any substantive concessions to the Czechs and keep Czechoslovakia together, Klaus responded as follows: "I am afraid that the processes of partition...are getting even out of Mr. Meciar's control, despite his truly privileged position in the HZDS and on the present Slovak political scene." [59]

    Although Meciar's apparent preference structure was M > B > C, as 1 January 1993 approached many Slovaks and even Meciar himself began to have second-thoughts about independence. Since there were few Slovaks in the Czech republic and little fears of Czech repression of those that remained, the primary focus of Slovak uneasiness came from the economic impact of independence. In early August 1992, "Meciar even publicly indicated that Slovakia, and particularly its economy was not ready to absorb the shock of such a separation." [60] The large Czech subsidy to the Slovaks has already been mentioned. The costs of creating their own financial and political institutions were also considered to be high. Meciar's plan to achieve a 'third way' between capitalism and socialism was destined to be a failure. Even Meciar himself seemed to understand that his policies were inadequate to satisfy Slovakia's economic needs as indicated by his reversal of key elements of his plan such as "slowing the economic transition, providing more social welfare, and dissolving the country." [61] In early December, he announced that social spending had to be cut in post-independence Slovakia. [62] In response to Meciar's policy shifts, Klaus commented that the Slovaks were finally beginning to understand things "that we had been trying to explain to them for more than two years but that they had not wanted to hear." [63] However, by this time it was already too late to save Czechoslovakia.

    There was also further concern among Slovaks about their political future after independence. One important fear was that Slovakia would drift away from the 'West' and the key European political, military, and economic institutions while the Czechs, now unburdened by their Slovak countrymen, would make a quick transition into 'Europe'. In addition, there was some question about the survival of democracy in an independent Slovakia. As one scholar noted: "In Slovakia...[e]lite political culture, as well as mass political attitudes and values, appear to be less supportive of democracy." [64] These political problems could have spill-over effects into the economic realm by serving as disincentives to foreign investors. The uneasiness by which the Slovaks approached independence was indicated in the early November 1992 opinion poll cited above. In addition, many Slovak leaders, including Meciar, attempted to postpone the final dissolution of the state through a referendum plan and obstructing an agreement on the division of state assets.

    Given the partial retreat by Meciar on the issue of economic reform and the concerns of many Slovaks about their post-independence future, it is quite possible that Meciar's (and many Slovak's) actual preference structure was B > M > C. However, this is inconclusive and of little import because Klaus was clearly willing to dissolve the state before making any concessions on key economic and institutional issues. As this essay clearly shows, the results of the 1992 Czechoslovak elections and the institutional arrangements that required consensus between Czechs and Slovaks led to the collapse of the last multiethnic federal state in Eastern Europe. The preference structures of the winners in the Czech and Slovak republic were such that a functional consociational political system could not develop. The focus on Klaus' rejection of the consociational option is not meant to lay blame on him or the Czech voters. Instead, it should be seen as the culmination of a long pattern of divergent historical development of the two nations. As Leff nicely summarizes, there was little to no possibility that the state could be kept together: "Without conscious effort to destroy Czechoslovakia, the two electorates, by focusing on republic-level concerns, had nonetheless elected leaders who could not, and did not, reach agreement on how to continue the state." [65]

    VII. Conclusion

    This essay has reformulated Arend Lijphart's 'consociational model' into a deductive and rational choice framework by utilizing James Buchanan and Gordon Tullock's theory of constitutional creation and change. I argued that the creation of consociational political structures are based upon the cost calculations by elite between majoritarian and consociational political systems and the costs of system breakdown. Each option represents a basket of costs: decision-making, external, and indirect-external. Elites rank the three political options in terms of cost and choose accordingly. Regime choice is an interactive process and the preference structures of the major groups within a polity determine the ultimate outcome.

    Although this essay dealt primarily with the creation of consociational regimes, what has been said has important implications for the collapse of such systems. The cost-equations of elites may change or be disconfirmed by their experiences within the system. For example, a group believes that the expected costs of the various political outcomes are B > M > C and accedes to a consociational system. However, once within the system, the group finds that the consociational system is far more costly than initially calculated and it is believed that either a withdrawal from the system or a majoritarian arrangement will be less costly [e.g., C > B > M]. The group will either attempt to alter the constitutional arrangements or leave the polity. In all cases of actual or potential consociational collapse, the interplay between the expected costs of system breakdown, consociationalism, and majoritarianism will be essential to the process of change.

    This essay represents a first step of a larger project to utilize rational choice in ethnically divided states. By reformulating Lijphart's inductive model, I have openen the black box of the creation of consociational regimes.

    VIII. Endnotes

    1. Liah Greenfeld, Nationalism: Five Roads to Modernity (1992); especially 1-88 and 397-484.

    2. See: Donald L. Horowitz, Ethnic Groups in Conflict (1986); Renée de Nevers, "Democratization and Ethnic Conflict," in Michael E. Brown, ed., Ethnic Conflict and International Security (1993): 61-78.

    3. Arend Lijphart, Power-Sharing in South Africa (1985).

    4. Kenneth D. McRae, "Introduction," Consociational Democracy: Political Accommodation in Segmented Societies (1974), 3.

    5. Arend Lijphart, "Consociational Democracy," Consociational Democracy, 75.

    6. ibid, 79.

    7. Lijphart, Power-Sharing in South Africa, 130. (emphasis added)

    8. Some of the favorable, but not necessary conditions are as follows: (a)learning over time; (b)external threats; (c)multiple balance of power among the subcultures (as opposed to a bipolar system or a clear hegemon); (d)reduced importance of political decisions on the system as a whole; (e)distinct lines of cleavage (or encapsulated cultural units); (f)internal political cohesion of the cleavages; (g)widespread approval of the principle of government by elite cartel. Lijphart, "Consociational Democracy," Consociational Democracy, 80-5.

    9. Harry Eckstein, "Case Study and Theory in Political Science," Regarding Politics: Essays on Political Theory, Stability, and Change, 125.

    10. James Buchanan and Gordon Tullock, The Calculus of Consent: Logical Foundations of Constitutional Democracy (1965).

    11. Buchanan and Tullock, 43-6.

    12. External costs in this context refer to the potential that the group may impose external costs upon individuals. At the time in which one determines a preference for one constitution over another, the calculus is made with an eye toward the future potential that one may find himself in the minority. For example, in all societies the poor greatly outnumber the wealthy. In a simple majority system with no other institutional constraints, the poor can use their numbers to impose a redistribution of wealth scheme upon the rich. Thus, the rich would push for anything but a simple majority system.

    13. Buchanan and Tullock, 72.

    14. Buchanan and Tullock, 259. (emphasis in original)

    15. Buchanan and Tullock, 115.

    16. Lijphart responds to these critics in: Lijphart, Democracy in Plural Societies: A Comparative Exploration, 50-2; and Lijphart, Power-Sharing in South Africa, 98-100.

    17. Clearly, these designations are ideal-types. Most nominally majoritarian political systems do have some consociational elements to them. For example, the structure of the United States Senate, while not exactly consociational, deviates from the principle of strict majority rule (i.e., in the one-man, one-vote sense) since it gives disproportionate representation to the populations of small states and thus reduces the chances of domination of small states by large ones.

    18. David M. Olson, "Dissolution of the State: Political Parties and the 1992 Election in Czechoslovakia," Communist and Post-Communist Studies 26, 3 (September 1993): 302.

    19. Carol Skalnik Leff, The Czech and Slovak Republics (1997): 131.

    20. Robert Henry Cox and Erich G. Frankland, "The Federal State and the Breakup of Czechoslovakia: An Institutional Analysis," Publius 25, 1 (Winter 1995): 77.

    21. Leff, 128.

    22. Since the 'Czechoslovak Socialist Republic' was changing its name anyway (to drop the word 'Socialist'), Slovaks wanted to add a hyphen between the names of the two nations and call the state 'Czecho-Slovakia'. The Czechs resisted and after lengthy and heated negotiations, 'the Czech and Slovak Federative Republic' was the final outcome.

    23. Sharon L. Wolchik, "The Politics of Ethnicity in Post-Communist Czechoslovakia," East European Politics and Societies 8, 1 (winter 1994): 155-6.

    24. Olson, 301, 302.

    25. Olson, 310, table 2.

    26. Erazim Kohak, "Tattered Velvet: A Country Falls Apart," Dissent (Fall 1992): 441.

    27. "A Country Divided," Euromoney (September 1992): 168.

    28. Cox and Frankland, 84.

    29. Prague CSTK, 2100 GMT, 2 November 1992, reproduced as "Klaus: Economic Reform Has Crossed 'Rubicon'," in FBIS-EEU, 5 November 1992, 17.

    30. The overall Czechoslovak decline in GDP of 1.6% in 1990 worsened in 1991 to a 15% drop. Although the rate of decrease in 1992 was less (7% of GDP, with most of that being in the first quarter) and prospects for a recovery became tangible in the second half of that year, the drop in GDP and industrial production in Slovakia after 1989 was much sharper and the overall recovery of mid-to-late 1992 was mostly a phenomenon of the Czech region. Similarly, the postwar trend of a convergence between Slovak and Czech per capita incomes began to move in the opposite direction: Slovak per capita decreased from 88% of the Czech republic in 1988 to 72% five years later. Unemployment in Czechoslovakia as a whole averaged 4.6% in 1991 and 5.6% in 1992 and began to drop after the first quarter of 1992. However, the disparity between Czech and Slovak unemployment rates is striking: for 1991, unemployment in the Czech region averaged 3.1% and slightly decreased in 1992 to 2.9%; on the other hand, Slovak unemployment in 1991 stood at 7.9% and rose to an average of 11.5% in 1992. In addition, the general increase in private consumption of 8.7% in 1992 (after a decrease of 24% in 1991) is partly deceptive because most of the 1992 increase occurred in the Czech region alone (11.1% in the Czech region and only 3.0% in Slovakia). OECD, The Czech and Slovak Republics (1994).

    31. Cox and Frankland, 83.

    32. Cox and Frankland, 83.

    33. "A Country Divided," Euromoney, 168.

    34. Stanice Ceskoslovensko Radio Network (Prague), 1400 GMT, 16 June 1992, reproduced as "Havel, Klaus Discuss Current Talks With Meciar," in FBIS-EEU, 17 June 1992, 6.

    35. Klaus and Meciar met in Brno (9 June), Prague (11 June), and Bratislava (16 June and 19-20 June). At the last meeting, the two sides reached a political agreement on the dissolution of their common state. Jan Obrman, "Czechoslovakia: Stage Set for Disintegration?," RFE/RL Research Report 1, 28 (10 July 1992): 26-7.

    36. "No Yugoslavia Is Imminent Here," Der Standard (Vienna), 17-18 June 1992, 2, reproduced as "Meciar Denies Provoking Breakup of Federation," in FBIS-EEU, 19 June 1992, 3.

    37. "When the Prime Minister Returned (Once Again)," Slobodny Piatok (Bratislava), 17 July 1992, 3, reproduced as "Meciar on Current Czech-Slovak Relations," in FBIS-EEU, 27 July 1992, 20.

    38. Wolchik, "The Politics of Ethnicity in Post-Communist Czechoslovakia," 157.

    39. Leff, 135.

    40. Cox and Frankland, 84.

    41. Stanice Ceskoslovensko Radio Network (Prague), 1845 GMT, 17 June 1992, reproduced as "Klaus, Meciar Agree on a Federal Government," in FBIS-EEU, 18 June 1992, 3. This sentiment is also echoed in Jan Obrman, "Czechoslovakia: A Messy Divorce After All," RFE/RL Research Report 1, 41, 16 October 1992: 1.

    42. OECD, 59.

    43. Milica Z. Bookman, "War and Peace: The Divergent Breakups of Yugoslavia and Czechoslovakia," Journal of Peace Research 31, 2 (1994): 187.

    44. Leff, 136.

    45. Fifty per cent of Czechs believed that the state should dissolve, compared with only 40% of Slovaks. Forty-three percent of Czechs and 49% of Slovaks did not believe that the division of the state was necessary. The poll further showed that 57% of Czechs would choose division in a choice between division or Meciar's confederal plan. CTK (Prague), 1411 GMT, 26 November 1992, reproduced as "More Czechs Than Slovaks Want to Divide Federation," in FBIS-EEU, 1 December 1992, 17.

    46. This outcome, however, should not be discounted as meaningless. The fact that the dissolution of the state was accomplished through a negotiated process and rather amicably was almost unprecedented in history. Although they attempted to deflect blame for the dissolution from themselves, both Klaus and Meciar complemented each other on "the democratic, deeply humane and constitutional nature of Czechoslovakia's split into two independent states." CTK (Prague), 1604 GMT, 27 December 1992, reproduced as "Meciar, Klaus Debate Causes of Split," in FBIS-EEU, 30 December 1992, 8.

    47. CSTK (Prague), 0833 GMT, 12 June 1992, reproduced as "Slovak Press Comments on Klaus-Meciar Talks," in FBIS-EEU, 17 June 1992, 6.

    48. The latter position (that Klaus' preferences were C > M > B) is supported by Meciar's claim that Klaus had "decreed the disintegration of the state after forty minutes of discussion." Le Monde (Paris), 7 July 1992, 1, 4, reproduced in FBIS-EEU, 8 July 1992, 12. However, it was immediately very clear that the positions of both sides were totally inconsistent with each other.

    49. "Czechs Calculate that Division will Add Up," Euromoney (February 1993): 86.

    50. "Czechoslovak Statehood Has Come to an End," Respekt (Prague), 20-26 July 1992, 3-4, reproduced as "Havel Interviewed on End of Czechoslovakia," in FBIS-EEU, 27 July 1992, 15.

    51. "Klaus Draws Up Optimistic Picture," Frankfurter Allgemeine (Frankfurt/Main), 12 November 1992, 8, reproduced as "Klaus Expresses Optimism About Czech Economy," in FBIS-EEU, 13 November 1992, 9.

    52. "No Yugoslavia Is Imminent Here," Der Standard (Vienna), 17-18 June 1992, 2, reproduced as "Meciar Denies Provoking Breakup of Federation," in FBIS-EEU, 19 June 1992, 3.

    53. "Czechs Calculate That Division Will Add Up," Euromoney (February 1993): 86-88.

    54. Bookman, 184.

    55. Leff, 141.

    56. "Velvet Divorce," Economist, 13 June 1992, 53.

    57. Stephanie Baker and Jen Nessel, "Czechs, Slovaks Go It Alone," The Nation, 8 February 1993, 158.

    58. Jan Obrman, "Czechoslovakia: State Set for Disintegration?," RFE/RL Research Report 1, 28 (10 July 1992): 29.

    59. "It is Dangerous to Push a Cart Down the Hill," Mlada Fronta Dnes (Prague), 3 July 1992, 7, reproduced as "Czech Prime Minister Views Disintegration Process," in FBIS-EEU, 9 July 1992, 13.

    60. Jiri Pehe, "Scenarios for Disintegration," RFE/RL Research Report 1, 31 (31 July 1992): 13.

    61. Cox and Frankland, 86.

    62. CTK (Prague), 1723 GMT, 3 December 1992, reproduced as "Meciar Says Social Spending Must Be Cut," in FBIS-EEU, 8 December 1992, 16.

    63. Jiri Pehe, "Czechs and Slovaks Prepare to Part," RFE/RL Research Report 1, 37 (18 September 1992): 13.

    64. Sharon Wolchik, "The Repluralization of Politics in Czechoslovakia," Communist and Post-Communist Studies 26, 4 (December 1993): 430.

    65. Leff, 131.