Evolution of Democracy and Economic Liberalization in Central and Eastern Europe

by Hailey Lothamer

Hailey Lothamer is currently completing a BA Honours in Political Science at the University of Alberta. Throughout the summer of 2022, Hailey participated in a research internship with the Ditchley Foundation to explore archival notes from conferences on Central and Eastern Europe after the end of the Cold War.


Following the end of the Cold War, Ditchley’s role as a meeting place has grown in importance given its efforts to reconcile the divisions of Europe left in the wake of the Soviet Union. Now, not only does Ditchley host conference participants from either side of the Atlantic but there are also growing numbers of participants from the former Eastern Bloc states. After the fall of the Berlin Wall in 1989, many former Eastern Bloc states transitioned to free market economies and liberal democratic societies. While initially, the future of the Eastern Bloc was unclear, the West did its best to model a successful democracy and free market for these countries. This transition, however, was not easy nor simple. The Western countries, albeit reluctant to prescribe any governance systems on the former Eastern Bloc, planned to aid this transition through economic policies to foster their shared sense of European identity. As these states of Central and Eastern Europe (CEE) [Latvia, Estonia, Lithuania, Poland, Czech Republic, Slovak Republic, Slovenia, Romania, Croatia, Hungary, and Bulgaria] have gone on to join the European Union (EU) and NATO, Ditchley conferences continue to evaluate the political and economic progress of these nations. This paper intends to uncover the path of the Central and Eastern European states to democracy and a free market, as told by the Ditchley Archives.


As the war in Ukraine rages on following Russia’s brutal invasion, the question of what prevents Russian imperial ambitions from turning next to the former Eastern Bloc weighs heavy on the continent. While Russia has returned to its authoritarian leadership style of the 20th century, the same cannot be said for many CEE countries. Understanding what distinguishes these states from Russia is multi-faceted, but a necessary component is the development of liberal democracy. This process is ongoing and non-linear, however, its origins in Central and Eastern Europe following the fall of the Iron Curtain are well-represented in Ditchley conferences.   

The tone set by the first Ditchley conference to be attended by representatives from Eastern and Central Europe established the importance of treating each country and its political and economic transition as unique. Affirming the distinction between these transitions is crucial to understanding the common themes between them. For the European leaders of the 1990s, a successful economic transition in the former countries of the Warsaw Pact was of great importance, because it was believed that economic progress would coincide with a transition to democracy. 

The End of an Era: Reforms in the Soviet Union

The conference that took place at Ditchley in May of 1986 was intended to discuss the future relations between Western Europe and the Eastern Bloc with considerable focus on the issue of a divided Germany. Due to the easing of geopolitical tensions with Gorbachev (1985-1991) at the helm of the Soviet Union, conference participants were inclined to believe that relations with Eastern Europe would see positive progress in the coming years. For this reason, there was great concern expressed over how to achieve this progress in relations. There was considerable debate  on taking a dual-track approach by encouraging Eastern governments to act independently of the Soviet Union and encouraging citizens to push their governments for protection of their human rights. The reasoning behind this approach was that the Soviet Union could not prevent every attempt by the West to improve their relations with the Eastern Bloc if there were many engagements. It was also almost unanimously agreed that improving economic relations and increasing trade with the Eastern Bloc was not a viable method to improve relations. The reason this method was not more seriously contemplated during the conference was that bilateral diplomatic relations were heavily favoured as the best path to pursue greater independence of the Eastern Bloc from the Soviet Union. However, this was almost certainly due to the concern of the West that there needed to be the foundations of a political relationship with the Eastern Bloc before the end of the Soviet Union, otherwise, it would lead to widespread instability and risk escalating tensions between the East and West.

In April of 1989, Ditchley hosted its first conference addressing how a reformed and democratically governed Eastern Bloc could be achieved. This conference was chaired by Sir Julian Bullard, a notable diplomat in the British foreign service. The Western diplomats and intellectuals attending the conference would discuss the new policies of the West towards the Eastern Bloc following the liberal reforms made to their domestic and foreign policies. However, there was much uncertainty amongst Western elites about what Gorbachev’s new policy of “different roads to Socialism” meant for the West and East. 

Political assistance to the Eastern Bloc was seen as unrealistic by many conference attendees, as the risk of imposing on the Soviet area of influence was seen as too great and there was already a context for political reform being developed under Gorbachev’s policies. Economic assistance was seen as equally unrealistic, although there were differing opinions amongst the conference participants about the potential success of economic assistance given the suppressed inflation and debt of the Eastern Bloc. While the collapse of the Soviet Union remained unforeseen at this time, it was not long after this conference that the West was once again considering the question of political and economic assistance to the Eastern Bloc.

Despite the uncertainty around how the West could maintain policies of non-intervention in the Eastern Bloc while also encouraging reforms, it was commonly believed amongst the conference participants that their assumed universal human values would prevail over the ideology of the Soviet Union. Owing to their sense of a common human experience, the Western leaders affirmed during the conference that the Eastern Bloc states deserved self-determination. Since most of the Eastern Bloc was considered to be culturally similar to Western Europe, the West saw it as their moral imperative to liberate the Bloc and aid their transition to democracy. Although the archives suggest that the conference participants had the best of intentions for the Eastern Bloc, their presumptions about the universality of human values and that self-determination would lead to liberal democracy is evident.

The reluctance of the West to provide political aid in the form of political advisors to the Eastern Bloc was likely due to their unwillingness to impose a political system on countries they saw as culturally similar to their own. Furthermore, given that the Eastern Bloc was still under the influence of a global superpower, the West was equally as likely to have absolved itself of some responsibility to these states due to geopolitical realities. Thus, the prevailing attitude throughout the conference was one of desire to assist the Eastern Bloc, but a lack of insight into how to bring about reform in the region.

Chairman Sir Julian Bullard was a British diplomat who was formerly the ambassador to West Germany in the 1980s as well as the head of the Foreign Office’s East European and Soviet Department in the 1970s. His tenure as department head led to the expulsion of 105 Soviet diplomats participating in espionage. Sir Julian Bullard served as a political director within the Foreign Office and provided his diplomatic expertise in many multilateral capacities, including in meetings with NATO, the United Nations, and the European Community.

Command Economies to Free Markets:

In a historic moment at Ditchley in November of 1990, participants from the former Eastern Bloc attended a regular conference for the first time. Some of the countries that were represented at the conference were Poland, the Czech and Slovak Federal Republic, the USSR, and Yugoslavia. The Chair of the conference was the Rt Hon Edmund Dell, a former British MP, and the topic of discussion was issues associated with economic liberalization in the former Eastern Bloc. Following the collapse of the Soviet Union, most of the former Eastern Bloc introduced a new democratic governance system and implemented policies, such as shock therapy, to help with their transition to a free market. Due to these reforms, there was a decrease in living standards and an increase in unemployment, so the Ditchley conference was intended to address how the West could assist with the hardships associated with the economic transition. The West was still reluctant to provide political aid, and so political concerns were only discussed insofar as how a legal framework would be set up to support the development of a free market. 

During the conference, the Western attendees were particularly concerned with how they could assist the CEE governments to introduce privatization to their economies while simultaneously reducing state welfare services. On this issue there was general agreement amongst the participants that if the CEE countries were to one-day join the EU and NATO, they must undertake drastic economic measures to transition their economies. Ultimately, the conference produced a three-stage report compiled from Western and Eastern expertise on how best to transition the command economies to free market economies. This report primarily focused on the re-introduction of economic criteria, the adjustment of enterprises, and foreign aid. The conference also addressed concerns about the intertwined nature of politics and economics, and there was vigorous debate about the best manner to introduce these austerity measures without sparking resentment towards the newly established democratic governments. In the end, the conference concluded with the Rt. Hon Edmund Dell noting that the European Community was to be a central actor in the transition of the former Eastern Bloc, and it should strive to “not betray their hopes.”

Chairman Rt. Hon Edmund Dell was formerly a British MP from the Labour Party throughout the 1960s and 1970s. Notably, he was also the Secretary for State Trade under James Callaghan in the late 1970s. After his political career, he began his new venture into business as the chairman for Channel 4 and director for Shell Trading. 

Shared History:

By 1992, the CEE states had arrived at a crossroads of politics and economics. The issues that affected the CEE societies could not be addressed simply as a factor of economics or politics. Therefore, this Ditchley conference was held to share solutions to common problems in the CEE states by acknowledging their status as inheriting the common civilization left by the Soviet empire.

One particularly widespread issue left by this common civilization was the societal tensions heightened by the economic hardships of rising unemployment and a reduction in government welfare programs. However, the biggest concern to emerge during this conference was surrounding lustration and how to reconcile with the past under the Communist regime. The consensus reached was that it was up to each nation to decide on whether to implement lustration programs, seeing as these programs involved limiting the ability of former Communist officials to serve in a public capacity. An important distinction made during this debate was the difference between individual and collective responsibility — a distinction that marked an important shift in the political transition from the collectivist nature of the Soviet Union to the individual rights associated with liberal democracy. The centrality of the lustration programs to societal progress in the CEE states was most clearly illustrated by Poland’s former Prime Minister, Jan Olszewski, who stated during a live television broadcast in 1992 that: “An independent country cannot be run by people who are enslaved by their own past.”

Perhaps the most important theme discussed during the conference was the recognition that the project of democracy in the CEE countries was only to be as successful as their economic transition. Establishing this connection between politics and economics was a step towards improving the understanding of the West and how it could assist with this transition.  Despite its eagerness to help, the Ditchley archives describe that the Western leaders appeared at a loss for what they wanted from their relationship with the CEE countries. 

Road to the European Union:

For many of the CEE countries, the road to membership in the European Union (EU) was not a clearly defined process, although it was acknowledged as the ultimate goal. Even following the ratification of the Maastricht Treaty in 1993, many Western European governments were unsure of how this treaty could be ratified by CEE countries as the framework of the treaty was conceived before the dissolution of the Warsaw Pact. This preoccupation with integrating the CEE states into the EU was a predominant theme during the conference on the status of the EU in December of 1993, chaired by the Rt Hon Tristan Garel-Jones MP. However, the Western European countries were primarily concerned with how the EU and its monetary union could be developed amid a recession while the North American attendees prioritized the integration of the Eastern states into the EU. There was considerable debate on the issue of expanding the EU to include other European nations as soon as possible or whether to strengthen the institutional cohesion of the existing member states first. There was consensus, however, that for the foreseeable future, Russia and Ukraine could not become members of the EU in the interest of maintaining a stable union.

Despite the provision of economic aid to the CEE states, the West was reluctant to open its markets to them due to the recession. In this context of an economic recession, the West believed that the goal of EU membership for the CEE states in 2000 was likely to be extended by a few years given the strict conditions that had to be met.

The Status of Democracy:

The conference that took place at Ditchley in January of 1997, Nations in Transition to Democracy: The Management of Radical Transformation, was timely not only to events taking place across the Atlantic but also to those on a much larger scale. Democracy was on the rise all across the world and many nations were in the process of transitioning to democratic states, including those in CEE. Seeing that this transition was taking place in numerous different contexts, Ditchley invited experts from across the globe to discuss the management of the transition of states to democracy, a conference chaired by the former British Prime Minister the Rt Hon the Lord Callaghan of Cardiff.

Although the conference was far-reaching in its scope, the analysis of different states during their transition to democracy produced some common insights and themes. For example, the presence of a long-term vision by the citizens and political elite was identified as important to ensuring that the proper institutions were set up to support a democracy. This was not any less true in the case of CEE states, which were at constant risk of sliding back into ‘semi-authoritarian patterns’ of governance should their quality of life under democracy fail to improve in the short term. At the same time, the civil societies of these CEE nations were in the process of adopting a new political culture where they could hold the political elites accountable through open civil discourse.

However, common challenges in the CEE states had begun to emerge while these systems and institutions of democracy were still in their infancy. For one, the political elites, who often had limited experience, were in the position of implementing drastic changes whilst also trying to maintain the trust of the citizenry. This heightened the risk of a return to semi-authoritarian rule if the elites from the Communist regime appeared more trustworthy than the existing elites. Another challenge was that a majority-elected government was not necessarily a universal condition of democracy, given that voting in the CEE was often done according to identity and not based on policy decisions. In this manner, the CEE democracies were yet to develop the structures of democracy needed to protect minority rights.

The 1997 conference participants also identified that this stage of the transition in the CEE states was a prime opportunity for growth such that their workers could be trained as skilled workers and entrepreneurs while the larger citizenry could foster a new sense of influence and participation in civic affairs. However, there was a specific obstacle identified during the conference that prevented any substantive progress in civil society, and that was the historical influence of personal insecurity developed under Soviet rule. This insecurity, when combined with rising crime rates, was thought to foster greater mistrust in state institutions and detract from the willingness of citizens to participate in political affairs. Political apathy was a considerable problem in developing democracies, and so a solution suggested during the conference was to encourage a greater presence of non-governmental organizations to ensure the government was held accountable.

Even as democracy was on the rise across the world with more democratic governments than ever before being elected, the lack of experience with democratic processes was seen as concerning by many of the 1997 conference participants. In the CEE states, this lack of experience meant that many public officials held the same position after the end of Soviet rule and during the transition to democracy. Therefore, the Western participants at the conference were particularly troubled by the prospect of so-called ‘bandit capitalism’ being established in the CEE states because of a mismanaged economy. Bandit capitalism can be extremely harmful to the development of a healthy democracy because it fosters corruption amongst politicians for the growth of an oligarchy; the newly established free markets in the Eastern Bloc were at risk of corruption without considerable legal regulation. However, the conference attendees agreed that the CEE nations and their peoples were bearing the economic struggles quite well despite the circumstances. Irrespective of this success, the Western leaders agreed that it would be shortsighted to end the political aid programs at that time.

The Rt Hon the Lord Callaghan of Cardiff was the former British prime minister between 1976 and 1979 and served as the leader of the Labour Party between 1976 and 1980. He was of remarkable distinction as a politician because he remains the only person to have been in all four of the Great Offices of State throughout his political career. While he served as a lieutenant in the Royal Navy during the Second World War, immediately following its end, he stood for election to the House of Commons in 1945. His career as a member of parliament lasted from 1945 until 1987, after which he was appointed to the House of Lords.

Questions for the Future:

Even though the Ditchley conference on Nations in Transition to Democracy in 1992 had provided ample insight into the regional progress of the CEE, several questions remained unresolved. For instance, while the interdependence of economics and politics was largely agreed upon by conference participants, there was no one path for progress that could be identified. As an example, regarding the CEE states, there were numerous perspectives on the rate at which the privatization of state-owned companies should be conducted for the greatest stability. Moreover, there were different understandings of how social justice should be restored in these societies, and under what circumstances, if at all, reconciliation should take place. Although there were no easy answers, these questions were discussed with the ultimate aim of fostering progress and an ability to deal with these issues effectively moving forward.

Perhaps most importantly, with the nature of these Ditchley conferences, it was recognized that implementation of any of the solutions to challenges on establishing democracy and economic liberalization could only be achieved by the nations themselves, and for that, the participants had to “adopt a certain humility.” This recognition was an important first step in affirming the type of relationship that the Western countries would have with their counterparts in CEE. It was in this spirit, encouraged by the progress of the CEE nations so far, that the conference identified a sense of leitmotiv that inspired hope for the future of liberal democracy.

“Bi-polar Europe had certain ‘advantages’, I would like to say for the European powers… the two world powers; they reduced not only European complexity, but, in a certain sense, also European responsibility.”

~ Dr. Kurt Biedenkopf, Annual Lecture XXIX

The Final Status Prior to Accession:

In the fall of 1998, the Rt Hon John Major MP chaired a conference on the development of the European Union at Ditchley House. While the primary focus of the conference was the status of the monetary union amongst the members of the EU, there was still some conversation on the candidate status of the CEE countries. In large part, this discussion of the candidate countries was to identify their different sentiments about the return to the European community after being part of the Eastern Bloc. As noted by the director of Ditchley at the time, Sir Michael Quinlan, the CEE countries viewed NATO as a provider of security, but these nations saw EU membership as their proper “home.” Even as the CEE nations were getting closer to meeting the conditions of EU membership, the final barrier to address before their accession to the EU was seen as removing the “psychological Iron Curtain” that divided Europe.

This question of enlargement was revisited at the Ditchley conference in October of 2004, after the accession of many of the former Eastern Bloc states. There were, however, concerns about the perceived lack of legitimacy of the EU since it was ultimately the responsibility of member states to implement EU policies. At this time, the countries of Eastern Europe were seen to be the next logical group to ascend to the EU, but there was little progress made on what this accession would entail for Europe and countries like Ukraine. However, this conference marked an important milestone in the transition of CEE states to democracy and a free market — for the first time, former Eastern Bloc nations were now members of the EU and NATO.   

The Rt Hon John Major MP is a former British prime minister and leader of the Conservative Party who served from 1990 until 1997. He was employed in various capacities under the Thatcher government and sat as a member of Parliament until 2001. 


The road from the Warsaw Pact to membership in NATO and the EU was not easy or established for the former Eastern Bloc countries. In many ways, it was complicated by the existing framework and arrangements amongst the Western countries that required the CEE states to meet their standards, rather than adjusting for the individual experiences of each state. From the perspective of the Western European countries, the transition process was largely a responsibility of the CEE national governments, even though the West had expressed its historical connection and moral imperative to provide aid. While the political and economic assistance the CEE states received from the West aided their transition, their primary motivation was the hope that liberal democracy would bring a better quality of life. 

In the future, if Ditchley were to host a conference in 2023 on the status of democracy and economic liberalization in the CEE states, there would likely be several key items of discussion on the agenda. To begin, evaluating the consolidation of democracy in these countries using indicators such as the rule of law would be a critical starting point in understanding how this transition to democracy and a free market has evolved since ascending to the EU. Another expected feature of this conference is to discuss how economic success might be correlated to the establishment of a healthy democracy. However, this would invariably lead to a discussion on the broader context of the relationship between the Western countries and the CEE states within the EU. For example, following the 2015 migrant crisis there were notable political and economic divisions within the EU, initially concentrated between the West and the CEE states. Additionally, the war in Ukraine is likely to have exposed some internal divisions within the EU between the West and the former Eastern Bloc states, especially when it comes to reinforcing a relationship of mutual trust. Finally, although nationalism and populism have been on the rise across the continent in recent years, the question of what this means for CEE countries is an important indication of their futures as democratic states.

Notes of Thanks:

I would like to extend my gratitude and a sincere thank you to Lord Kerr of Kinlochard for taking the time to speak with me and share his insights on this topic. This proved an incredibly valuable discussion which guided my research and reflections on major themes.


1945 - Second World War ends and most states in Central and Eastern Europe remain under the occupation of the Soviet Armed Forces.

1949 - The Council for Mutual Economic Assistance (Comecon) was established, formalizing the economic interdependence between Eastern Bloc states and the Soviet Union. 

1955 - The Warsaw Pact, a military, and collective defence pact, was signed between the Soviet Union and other Eastern Bloc states.

1985 - General Secretary Gorbachev comes to power and soon thereafter introduces his reforms of glasnost and perestroika.

1986 - Ditchley conference on Divided Germany and the Future of Europeis held and chaired by Sir Nicholas Henderson.

1989 - Ditchley conference on Western Policies in Light of Reform and Innovation in the Soviet Union and Eastern Europeis held. The conference is chaired by Sir Julian Bullard and addresses how Western policy can best encourage liberal reforms within the region.

1989 - The fall of the Berlin Wall. Many Eastern Bloc states declare their independence from the Soviet Union and begin democratic reforms.

1990 - Ditchley conference on Moving From a Centralized Command Economy to a Free Market is held. The conference is chaired by the Rt. Hon Edmund Dell and participants from the former Eastern Bloc are in attendance.

1991 - The Soviet Union collapses and its empire disintegrates into independent states.

1992 - Ditchley Foundation Annual Lecture was delivered by Dr. Kurt Biedenkopf titled Europe in the 1990s.

1992 - Ditchley conference on Central and Eastern Europe, with Special Reference to Economic and Political Relations with the Westis held. The conference is chaired by Dr. Zbigniew Brzezinski.

1993 - The Maastricht Treaty, otherwise known as the Treaty on the European Union, was ratified, and formed the foundation of the European Union.

1993 - Ditchley conference onEuropean Union: Current Progress and Future Development is chaired by the Rt Hon Tristan Garel-Jones MP.

1997 - Ditchley conference on Nations in Transition to Democracy: The Management of Radical Transformation. The conference is chaired by the former British Prime Minister the Rt Hon the Lord Callaghan of Cardiff.

1998 - Ditchley conference chaired by the Rt Hon John Major MP on The Development of the European Unionwas held.

1999 - The Czech Republic, Hungary, and Poland join the North Atlantic Treaty Organization (NATO) as the first group of the former Warsaw Pact to do so. 

2004 - The Czech Republic, Estonia, Hungary, Latvia, Poland, Lithuania, Slovakia, and Slovenia join the European Union. Latvia, Bulgaria, Estonia, Lithuania, Romania, Slovakia, and Slovenia ascend to NATO as member states.

2004 - The Ditchley conference on the Future Direction of an Enlarged Europe was chaired by Lord Kerr of Kinlochard.

2007 - Bulgarian and Romania join the European Union.

2017 - The European Commission moves to initiate the process under Article 7 against Poland for their violation of fundamental rights and democratic values.