SGI 2024 | Czechia | Key Challenges

Key Challenges

Recent Governments Experts

SGI experts on Czechia

Lenka Buštíková

Lenka Buštíková is a Director of the Center for European Studies and Professor of Political Science at the University of Florida (UF). She grew up in Prague and previously taught at the University of Oxford and Arizona State University. Her research focuses on illiberalism, polarization, and democratic erosion. She is part of the East European Politics Group in the Department of Political Science at UF. Her book, Extreme Reactions: Radical Right Mobilization in Eastern Europe, received Harvard University’s Davis Center Book Prize in political and social studies. She is also a recipient of the Best Article Prize from the European Politics and Society Section and Best Paper Prize from the Comparative Democratization Section of the American Political Science Association. Dr. Buštíková currently serves as editor of the journal East European Politics. She is also an editor of Cambridge Elements on Politics and Society from Central Europe to Central Asia and Routledge Studies on Political Parties and Party Systems. She serves as Head of the Advisory Board for the Czech National Institute for the Study of Socioeconomic Impacts of Risks.

Zdenka Mansfeldová

Zdenka Mansfeldová is a senior researcher and head of the Department of the Sociology of Politics at the Institute of Sociology, Academy of Sciences of the Czech Republic. Her research focuses on the functioning of modern democracies and their institutions, the representation of interests, political representation in parties and parliaments and non-political interests’ structures. She has a long-lasting interest in social dialogue.

Martin Myant

Martin Myant is a senior researcher and head of the research unit on European Economic, Employment and Social Policy at the European Trade Union Institute in Brussels. He has been researching the economic and political development and recent history of East-Central Europe for many years with a primary focus on the Czech Republic. His publications include The Czechoslovak Economy 1948-1988: The Battle for Economic Reform, Cambridge: Cambridge University Press, 1989 (paperback, 2010), Transforming Socialist Economies: The Case of Poland and Czechoslovakia, Aldershot: Edward Elgar, 1993, The Rise and Fall of Czech Capitalism: Economic Development in the Czech Republic Since 1989, Cheltenham: Edward Elgar, 2003 and Transition Economies: Political Economy in Russia, Eastern Europe, and Central Asia (with Jan Drahokoupil), Wiley-Blackwell, 2011.

Petra Guasti (Coordinator)

Petra Guasti is an Associate Professor of Democratic Theory at the Faculty of Social Sciences, Charles University in Prague and a Senior Research Fellow at the Institute of Sociology, Czech Academy of Sciences (on leave). Between 2016 and 2021 served as a senior researcher, an Interim Professor and adjunct lecturer at the Goethe University Frankfurt. In April 2021 she completed her (cumulative) habilitation Democracy Disrupted at the Goethe University Frankfurt. Petra received her doctoral degree in political science from the University of Bremen. She also previously earned a doctoral degree in political sociology from the Charles University in Prague. In March 2019, she completed an eight-month Visiting Democracy Fellowship at Harvard University’s Ash Centre for Democratic Governance and Innovation at the John F. Kennedy School of Government. She serves as an expert for Bertelsmann Transformation Index, Sustainable Governance Indicators for over a decade, and V-Dem since 2018. In 2020 she has been appointed to the expert board of the Nation in Transit (Freedom House).

The Czech Republic faces significant challenges in adapting its economic model, managing societal changes and attitudes, defining its place in the world, and repairing its political reputation. The country’s international competitiveness has relied on multinational companies manufacturing for export to other EU member states while keeping high-skill activities, such as R&D and new product development, at home. However, increasing profit repatriation has dangerously widened the current account deficit. Additionally, the continuation of many traditional industries results in high levels of pollution and carbon emissions. This sustains a lobby with a vested interest in downplaying environmental damage and climate change.

To address these issues, the Czech Republic needs to emphasize less-polluting and higher-value economic activities. Current support for R&D is inadequate; the government’s last program was weak, poorly resourced, and lacked sector-specific targeting. A strategy to promote innovation from domestically owned firms, rather than relying on lower-grade activities introduced by foreign firms, is essential.

A major barrier is the commitment to a low tax level relative to GDP. Budget deficits are kept in check with reasonable service provisions, thanks to the EU’s financial help for public investment in education, research, and infrastructure. However, this support is not permanent. A critical challenge will be finding resources through additional taxation or cutting current services. The former appears feasible given the increase in company taxation in 2023, while the latter faces serious political barriers and risks breaching commitments to limit social exclusion.

A more welcoming approach to immigrants, both as a humanitarian policy and a means to combat the labor shortage, would require public resources. The assistance provided to Ukrainian refugees demonstrates that this is feasible, at least for some foreigners. An aging population pressures pensions and other public services. Gradually increasing the pension age seems sensible as a primary solution, provided adequate support is available for those less fit to work. Additional pressures include providing adequate housing for young people who cannot easily leave their parental homes. Attitudes toward family life are also contentious; relying on parental leave rather than state-supported child care for very young children hinders economic development by keeping part of the potential labor force out of employment. There is a clear need to combat persistent attitudes regarding a woman’s traditional role.

These internal challenges are linked to perceptions of Czechia’s place in Europe. The EU has required changes in laws and the formulation of coherent programs and policies, accompanied by help from Structural Funds. However, the government is divided over the long-delayed issue of accession to the eurozone. Reluctance partly stems from insular attitudes within various parts of the political spectrum, linked to skepticism over other aspects of the EU agenda, such as concern over climate change.

Czechia’s inward-looking stance is reflected in its limited interest in global issues, leaving it primarily a recipient of outside help rather than a donor. There is little appreciation of the benefits of becoming more active on the international stage. The country stands to gain from stronger measures against tax havens and requirements for reasonable levels of company taxation globally, both of which could bring substantial financial benefits.

While the majority welcomed Ukrainian refugees, the rise of identity politics is an important issue. Same-sex marriage is not codified in law, and new political divides are emerging over gender rights, domestic abuse, sexual abuse, and equal rights for the LGBTQ+ community. These issues also divide generations, with younger people, especially in cities, being more supportive of these causes. Conservatives dominate the current governing coalition. However, the younger generation might produce leaders who will seek modernization, economic restructuring, and the expansion of LGBTQ+ rights, possibly bundled with environmental protection.