Debt collection, foreclosure and bankruptcy in the Czech Republic:: an economic analysis

Using the examples of debt collection and bankruptcy, this article seeks to demonstrate that the development of market institutions in post-communism is a much more complicated and lengthy, process than those who call for brisk institution 'building' tend to believe. The Czech Republic provides a particularly illuminating example since, unlike in most other post-communist countries, the Czech judiciary has been genuinely independent and relatively well paid. Also, as far as we can tell, corruption has been of little significance. Moreover, in contrast to Hungary or Poland, Czech debt collection and bankruptcy law has been basically creditor-oriented since 1991. Nevertheless, the judiciary has been unable and, at times, unready to implement this pro-creditor stance, and greatly concerned about protecting debtors. This has been due to a large variety of reasons. This does not mean that the Czech attempt has failed. Rather, there has been substantial progress, but this progress has come about gradually and has had to overcome numerous unexpected obstacles.