Abstract
The paper is based on a broader study of three authors: Mlčoch, Machonin and Sojka. The underestimation of institutions - both formal and informal ones, including business ethick - was the key weakness of ex-Prime Minister Václav Klaus´'Czech way' of transition during 1989-99.
Then, the rhetoric of radical liberalism shielded certain interest groups, and due to the wedding of political and old-new economic powers, the standard framework of a free-market economy was transgressed and thus rendered ineffective. The absence of effective regulation, contract enforcement and bankrupcty procedures flowed from the same disingenuous situation on the Czech political scene.
The Czech economy of that era seems now little more than a Potemkin village of free-market capitalism