Business benefits resulting from enhanced civil freedom in the CEE region

The development of democratic institutions, political and economic freedom has followed diverging paths in Central and Eastern Europe (CEE), according to various international studies as well as the analysis conducted by BI. The general view is that democracy is conducive to economic growth. It is unclear though whether it is worthwhile for companies to proactively support political freedoms - for example through the support of civil society actors.

Though the economic impact of liberties and stronger democracy depend on a variety of factors, most empirical studies find that high quality (legal) institutions, legal certainty and the protection of property rights have a positive impact on the economy and thus on the operation of companies.

These lessons emerged from our collaborative project with the Center for International Private Enterprise (CIPE) and its partners. The aim was to map and collect data and evidence on the empirical and perceived benefits to businesses resulting from enhanced civil liberties in the CEE region.

In the first phase, the Budapest Institute mapped the literature and collected empirical evidence on the macroeconomic benefits of the rule of law, a stable and transparent business regulatory environment, and the low level of corruption as pertaining to the CEE region.

We also produced a report on assessing the perceptions of supporting local civil society by the private sector in Hungary, including the perceived benefits and impacts of such support. We worked with the Ethical Entrepreneur Initiative run by Bridge Budapest, applying participatory research methods during the working sessions organised for Hungarian business representatives.

In the second phase, BI assessed business perceptions and expectations concerning the positive business effects of pro-democratic business initiatives and of supporting civil society in the Czech Republic, Poland and Romania through stakeholder interviews and workshops.

In the third phase, BI mapped and presented inspiring cases of pro-democratic NGO-business co-operations and projects yielding mutually beneficial results for both the business and civil sector.   

Our analysis was presented by Petra Edina Reszkető on September 13, 2019, at the Regional Conference of the Center for International Private Enterprise in Munich.

The Budapest Institute was commissioned by CIPE to conduct this research.