آیا مقررات جوابگوی بازارهای سهام نوظهور هست؟ مدارک و شواهد از جمهوری چک و لهستان

Does the emergence of a stock market require a well-developed legal and/or regulatory system? Although historical work by Neal and Davis [Neal, L., & Davis, L. (2005). The evolution of the rules and regulations of the first emerging markets: The London, New York, and Paris stock exchanges, 1792–1914. Quarterly Review of Economics and Finance, 45, 296–311] and Stringham [Stringham, E. (2003). The extralegal development of securities trading in seventeenth century Amsterdam. Quarterly Review of Economics and Finance, 43, 321–344] suggests that securities markets have successfully developed with little government oversight, numerous authors [including Black, B. (2001). The legal and institutional preconditions for strong securities markets. University of California Law Angeles Law Review, 48, 781–855; Coffee, J. (1999). Privatization and corporate governance: The lessons from securities market failure. Journal of Corporation Law, 25, 1–39; Frye, T. (2000). Brokers and bureaucrats: Building market institutions in Russia. Ann Arbor: University of Michigan Press; Glaeser, E., Johnson, S., & Shleifer, A. (2001). Coase versus the Coasians. Quarterly Journal of Economics, 116, 853–899; Mlčoch, L. (2000). Restructuring of property rights: An institutional view. In L. Mlčoch et al. (Eds.), Economic and Social Changes in Czech Society After 1989. Prague: The Karolinum Press; Pistor, K. (2001). Law as a determinant for equity market development – the experience of transition economies. In Peter Murrell (Ed.), The Value of Law in Transition Economies (pp. 249–287). Ann Arbor: Michigan University Press; Stiglitz, J. (1999). Whither reform. Ten years of the transition. Keynote Address, Annual Bank Conference on Development Economics, Washington, DC, April 28–30, 1999; Zhang, X. (2006). Financial market governance in developing countries: Getting the political underpinnings right. Journal of Developing Societies, 2, 169–196] argue that the Czech Republic and other Eastern European governments need more regulation for their newly created stock markets. They maintain that the Warsaw Stock Exchange, which is seen as more regulated, has outperformed the Prague Stock Exchange which is seen as largely unregulated. Thus increased regulations are a key to increased performance. This article, however, maintains that the evidence from the Czech experience has been misinterpreted. This article provides an in depth case study of the Czech stock market and finds that (a) Czech capital markets have been hindered by government intervention from their beginning, (b) that the evidence on Poland's superior performance is not as strong as suggested, and (c) that Czech regulators seem to be unqualified, lack the proper incentives, and are unlikely to benefit the market. Under these circumstances it appears that Neal and Davis (2005:311) are correct that increased government involvement is unlikely to improve the situation.

After the collapse of communism in 1989, economists, policy analysts, and politicians were optimistic about the adoption of capitalist institutions in Eastern Europe. The Czech government, for example, created nearly two thousand joint stock companies and enabled all citizens willing to pay a small fee to participate in a voucher privatization (Filer & Hanousek, 2001). Although hopes for the development of markets were high, within a few years the stock market exhibited problems. A 1996 article in Fortune magazine entitled “The Pirates of Prague” is representative of the general sentiment: freewheeling privateers were bilking shareholders after the mass privatization ( Wallace, 1996). Tunneling, a phenomenon in which firm managers, investment funds, and majority shareholders expropriated resources of the companies at the expense of the other shareholders, occurred ( Johnson, La Porta, Lopez-de-Silanes, & Shleifer, 2002). The Economist (September 12, 2002) summed up the consensus: “Many now blame the extreme liberal ideas of their architect of reform, Václav Klaus, who was prime minister in 1992–1998. He believed that freeing markets was more urgent than establishing an institutional framework…. But today most people believe that Mr. Klaus's big bang created little economic growth, but a kleptocracy as bad as Russia's.” These problems and others have led many to question the existing arrangements and to ponder the necessary prerequisites for capital market development. While writers such as Benston (1998), Manne (1969), and Stigler (1964) argued that forward looking economic agents would contract for arrangements to maximize the value of their shares, Glaeser, Johnson, and Shleifer ( 2001, p. 854) counter that this group of theories “crucially relies, among other assumptions, on the possibility of effective judicial enforcement of complicated contracts.” In Eastern Europe these conditions are not met (Santomero, 1998), so Glaeser et al. argue that regulators must step in to enforce the rules. Others who have written about the Czech stock market reach similar conclusions. Coffee (1999), Mlčoch (2000), Pistor (2001) all argue that the Czech government has been too hands off and that this has led to insider dealings, a decreasing number of listed companies, and an overall lackluster stock market. In contrast the Polish stock market is portrayed as a model that others should follow. Poland was more explicit in adopting a highly regulated market, and over 1990s the total number of listed companies increased. Authors attribute the increasing number of companies in Poland to the high amount of securities regulation. This now common view is that the emergence of a stock market requires the state to play a significant role promoting and creating order in stock markets (Black, 2001, Frye, 2000, Stiglitz, 1999 and Zhang, 2006). But is the situation so cut and dry? Are regulations the explanatory factor in the performance in these countries? Perhaps yes, but perhaps no. As Stigler (1964, p. 120) argued, just because a problem exists does not mean that regulators have the capability to solve it. This article seeks to assess whether problems in Eastern Europe would likely be alleviated by increased regulations. Studying the emerging markets in Eastern Europe is important to any economy looking for the recipe of how to develop capital markets. An interesting dilemma presents itself because the sample size of countries is so small. Most previous studies rely on anecdotal evidence, which admittedly is often the best evidence available. Glaeser et al. (2001) go one step further by supplementing anecdotal evidence with some comparative statistics making theirs the most in depth article. They maintain that a more regulated Polish stock market vastly outperformed the less regulated Czech stock market. Their work is very influential (as of July, 2007, the ISI Web of Science Citation Index lists 36 published articles citing to them) and is now being accepted as conventional wisdom, so this article focuses on many of their arguments. In this article we provide an in depth case study and we too rely heavily on anecdotal evidence, which admittedly is always incomplete and has the potential for bias. The main contribution of this article, however, is to compile more objective evidence about market regulations and performance, and augment it with more anecdotal evidence much of which we observed first hand. We conducted research in seven visits to Prague in July 6–30, 2000, July 10–August 5, 2001, July 20–August 4, 2002, July 14–August 2, 2003, April 19–27, 2005, July 19–31, 2006, and July 4–14, 2007. During our second and third visits we conducted roughly three dozen formal qualitative interviews in English with the help of a Czech assistant, in addition to dozens of more informal conversations without an assistant in subsequent visits. We interviewed brokers, fund managers, bankers, lawyers, academics, and government officials.1 We also read literature from Czech companies, government agencies, and the financial press,2 as well as hundreds of pages of Czech regulations (which we found ironic considering how Glaeser et al. (2001, p. 853) maintain the market had “hands off regulation”).3 The additional anecdotal evidence is meant to augment the more objective statistics. We admit that anecdotal evidence always has the potential to be incomplete, but we believe that more evidence, albeit imperfect, is better than none. Just because observing the exact effort and ability of regulators is impossible, it does not mean one should assume as previous authors did that regulators are effective. Looking at de jure rules and a select few statistics as in Glaeser et al. (2001) can create a misleading picture of the regulatory environment in Eastern Europe. By bringing in evidence from various sources we hope to create a more accurate assessment of the Czech situation. Our research indicates that neither Czech judges nor Czech regulators are likely to be of assistance to investors. We conclude that the studies of Coffee, Glaeser et al., Mlčoch, Pistor, and Zhang seem to overestimate the ability of regulators to encourage the development of equity markets. If the problems that plague judicial enforcement are present with the regulatory authority, then shifting the burden of monitoring and enforcement from judges to regulators is not an efficient solution. Proposing regulations that are likely to be poorly enforced may be counterproductive. In contrast to the idea that lack of regulation was the problem, our study of the Czech stock market finds that government was a source of the problems. Our research also finds that the Polish stock market is not faring much better. Neal and Davis (2005, p. 311) discuss the problem of how government attempts to plan and regulate securities markets all too often results in politics getting in the way of markets, stifling rather than encouraging growth. In history there have been many examples of successful markets that were self-regulating ( Davis & Neal, 1998, p. 43) and few examples of successful tightly regulated markets. The lackluster Czech stock market should not be considered a new example of an unregulated failure, but instead just another example of one held back by too many regulations. In the end we concur with Neal and Davis (2005, p. 311) that “governmental ‘benign neglect’ is probably the best policy for countries at an early stage of economic development.”

We have a mixed assessment of the Czech privatization. On one hand, one of the goals was to get most industry out of governments hands quickly. From this perspective, Czech privatization helped achieve that goal. Almost two decades after the fall of the Soviet Union, certain other Eastern European countries such as Belarus are still “deciding” how to privatize and the economy is not much different from Soviet times. Getting firms into private hands, albeit imperfectly, might have been a good choice. In addition, on a per capita basis for everyone living in the country, the value of the firms in the Prague Stock Exchange has always been and still remains to be higher than the value of the firms on the Warsaw Stock Exchange. So from that perspective the Czech results are not that bad. On the other hand, if the goal was to instantly create a thriving stock market like that of the United States or England then the program was unsuccessful. Part of the problem was they had an unrealistic belief that Western stock markets could simply be copied. One Czech economist told us, “The main problem was that when Thatcher visited the Budapest Stock Exchange in the beginning of the transition process, she praised it as the future of capitalism for the former socialist economies; after that all the transition economies scrambled to imitate Hungary and create their own stock exchanges.” (Personal Interview, Prague, July 29, 2002). They thought that all they needed to do was create shares in state owned firms, create a trading venue, create a bunch of rules, and then markets in these government created enterprises would flourish. The Czech experience teaches a few important lessons about privatization and corporate governance. Most successful stock markets have evolved over time with many of their eventual benefits emerging later. Historically the primary purpose of stock markets has been to raise capital with the byproduct being the emergence of corporate governance mechanisms through the market for managerial labor and the market for corporate control. But in the transition economies the reformers confused the byproduct with the primary purpose—state enterprises were privatized, and the stock market was to assume the role of corporate governance without first being the source of investment capital. In a well functioning stock market, firms have to have good corporate governance if they want to raise capital. But when firms did not have to raise their capital (if they started out owned by the state), the corporate governance mechanisms need not be present. In these latter circumstances one should not expect the stock market to have the same corporate governance mechanisms.19 One the major pitfalls of Coffee, Glaeser et al., Mlčoch, and Pistor is that they look at problems that are manifest in the secondary market and charge the secondary market itself. The theory that firms will create “contracts bonding firms to treat investors well” (Glaeser et al., 2001, p. 893) assumes that firms are vying for the investors’ dollar in the primary market to begin with. But if a manager has no reason to create such a contract, the secondary market is not to blame. A company that has to raise capital will have an incentive to offer an ownership structure that minority investors can trust and to list its shares on an appropriate venue, but in the Czech Republic the starting point was completely different. Investors did not hire their managers nor choose the terms under which the shares would be traded. Resources were given to managers; they did not have to convince people to invest in their firm. Principals were not choosing their agents. In these circumstances, it would be unsurprising if managers do not always act in the interest of the investors. This is a problem in the Czech Republic and in countries with piecemeal privatization like Poland too (Claessens, Klingebiel, & Lubrano, 2002, p. 3). The way state owned enterprises are structured and how the managers our compensated affects performance (Aivazian, Ge, & Qiu, 2005). We are not overly positive or overly negative on the way the Czechs privatized, but let us consider some different choices the Czechs could have made. The Czechs could have sold their firms just as fast as they did without actually creating their coupon voucher scheme. They could have simply auctioned firms off to the highest bidder, whether that bidder was management or foreign investors, and given the proceeds to the citizens. The new owners would have an interest in trying to maximize the value of the firms, and through a competitive bidding process the citizens would get more. But “the Czech government discouraged equity ownership by managers” (Makhija & Spiro, 2000, p. 3) and they typically eschewed foreign bidding, because “there was a fear that foreigners may acquire the best firms, or so-called ‘national silver,’ at throwaway prices. Consequently, less than 10% of the firms had any insider or foreign ownership” (Makhija & Spiro, 2000, p. 3). Giving managers a stake in firms, having large institutional investors to act as a check, and having a free market for corporate control are some mechanisms used to make managers work for shareholders. But some of the main checks on management were removed because of government regulation. The Czech government did sell some state enterprises to foreign companies such as when they sold Skoda Auto to Volkswagen. When they did that, they essentially imported all of the well functioning institutions, such as the Frankfurt Stock Exchange, that help Volkswagen work. Research by Boubakri, Cosset, and Guedhami (2005) finds that privatized firms perform better when privatized onto developed stock markets with better mechanisms of corporate governance. Western stock markets have been evolving for centuries, so the Czechs did not need to be completely self-sufficient and replicate everything themselves. Perhaps a Czech stock exchange would have evolved, but it is not clear that a country with a population of 10 million even needs its own stock exchange.20 Perhaps most importantly, the focus should be allowing new businesses to come into the market rather than focusing all energy on regulating and micromanaging how state owned enterprises will persist after they are privatized. Since privatization, a number of problems have manifested in the stock market. It seems, however, that these problems should not be attributed to lack of regulation. In contrast to previous studies, we find that most of the problems in the Czech stock market are due to government policies rather than a lack of securities regulation. Our research suggests that authors such as Glaeser et al. commit errors on at least two levels: (1) the Czech environment is not one where judges are inept, but regulators are competent, and (2) the Czech environment was never one of laissez-faire. At the first level, a more accurate description would be: inept judiciary and inept regulators. On the second level, despite the politicians’ claims of sweeping market reforms ( Paliwoda, 1995, p. 76), the economy had heavy government influence throughout. A highly regulated Polish market has not vastly outperformed an “unregulated” Czech market. While most authors believe that strengthening regulators will be an improvement, we find that regulations have been acting as a hindrance to the development of the stock market. Just as the Czech judiciary has problems, so do Czech regulators, thus increasing regulation does not appear to be an effective remedy. Knowing the Czech history is important, because authors such as Glaeser et al attempt to use it as a counterexample to the studies documenting markets with successful self-regulation. Finding a market that failed because of too little regulation could have far reaching policy conclusions because it would imply that the historical examples of successful self-regulation cannot be generalized. But our research suggests that the Czech experience is no counterexample at all. The Czech stock market is just another example of an overly regulated and poorly planned stock market, which is underdeveloped as the result. It is not much different from other stock markets in the region such as Poland. Like most all other cases where governments believe they need to plan and tightly regulate markets, the goals of Polish and Czech regulators far surpassed their achievements. An implication of this study is that economies desiring more stock market development should look elsewhere rather than government regulation.