Capitalist Diversity on Europe's Periphery

Capitalist Diversity on Europe's Periphery

Dorothee Bohle
Béla Greskovits
Copyright Date: 2012
Edition: 1
Published by: Cornell University Press
Pages: 304
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  • Book Info
    Capitalist Diversity on Europe's Periphery
    Book Description:

    With the collapse of the Council for Mutual Economic Assistance in 1991, the Eastern European nations of the former socialist bloc had to figure out their newly capitalist future. Capitalism, they found, was not a single set of political-economic relations. Rather, they each had to decide what sort of capitalist nation to become. In Capitalist Diversity on Europe's Periphery, Dorothee Bohle and Béla Geskovits trace the form that capitalism took in each country, the assets and liabilities left behind by socialism, the transformational strategies embraced by political and technocratic elites, and the influence of transnational actors and institutions. They also evaluate the impact of three regional shocks: the recession of the early 1990s, the rolling global financial crisis that started in July 1997, and the political shocks that attended EU enlargement in 2004.

    Bohle and Greskovits show that the postsocialist states have established three basic variants of capitalist political economy: neoliberal, embedded neoliberal, and neocorporatist. The Baltic states followed a neoliberal prescription: low controls on capital, open markets, reduced provisions for social welfare. The larger states of central and eastern Europe (Poland, Hungary, and the Czech and Slovak republics) have used foreign investment to stimulate export industries but retained social welfare regimes and substantial government power to enforce industrial policy. Slovenia has proved to be an outlier, successfully mixing competitive industries and neocorporatist social inclusion. Bohle and Greskovits also describe the political contention over such arrangements in Romania, Bulgaria, and Croatia. A highly original and theoretically sophisticated typology of capitalism in postsocialist Europe, this book is unique in the breadth and depth of its conceptually coherent and empirically rich comparative analysis.

    eISBN: 978-0-8014-6566-6
    Subjects: History

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Figures and Tables
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xii)
  5. Abbreviations
    (pp. xiii-xvi)
  6. Introduction: The Success, Fragility, and Diversity of Postsocialist Capitalism
    (pp. 1-6)

    This book has grown out of our long-standing interest in the success, fragility, and diversity of East Central Europe’s new capitalist order. All three aspects have occupied center stage in the debates on postsocialist transformation and European integration. The view that the region’s states exhibit the maximum of success that any postsocialist country can achieve is still widely shared by comparativists, even if the recent global crisis casts a shadow over these states’ earlier accomplishments. This positive assessment is based on the fact that after the fall of socialism East Central Europe—which for the purpose of this book includes...

  7. 1 Capitalist Diversity after Socialism
    (pp. 7-54)

    It was not before the late 1990s that the diversity of postsocialist political economies became a major issue for East Europeanists. Before that time discussions had been dominated by the essential problem of the road toward market economy “without adjectives.” As Jeffrey Sachs asserted, “the main debate in economic reform should therefore be about the means of transition, not the ends. Eastern Europe will still argue over the ends: for example, whether to aim for Swedish-style social democracy or Thatcherite liberalism. But that can wait. Sweden and Britain alike have nearly complete private ownership, private financial markets and active labor...

  8. 2 Paths to Postsocialist Capitalism
    (pp. 55-95)

    The significance of postsocialist capitalism’s diversity cannot be fully understood without capturing how it came to be that way. The emergence of new regimes raises complex questions about the possibilities of transformative agency within the constraints of the international environment and past legacies. How far could the East Central European states influence the direction of their postsocialist history? How would we know whether they were active shapers of their fortunes or misfortunes in the first place? One way to substantiate that their paths were indeed chosen by the small states—rather than externally imposed, overdetermined by their past, or purely...

  9. 3 Nation Builders and Neoliberals: The Baltic States
    (pp. 96-137)

    The Baltic states stand out for their convergence on radical neoliberal macroeconomic, structural, and social policies. Fast liberalization of foreign trade and investment, fixed exchange rate regimes, tight monetary policies, and rapid privatization have been the hallmark of their transformation strategies. Although the Baltic countries have experienced some of the most severe transformational recessions, they have done little to mitigate the accompanying social hardship. They have also been barely concerned with protecting inherited industries. As a consequence, their industrial capacities have greatly diminished. In contrast, financial, real estate, transport, and communication services have boomed and have attracted the bulk of...

  10. 4 Manufacturing Miracles and Welfare State Problems: The Visegrád Group
    (pp. 138-181)

    The embedded neoliberal regimes of the Visegrád group differ from Baltic nationalist neoliberalisms in important respects. The four economies integrated into the EU’s single market by transforming themselves into one of Europe’s largest transborder clusters of complex-manufacturing export industries. To attract TNCs, eventually all these states adopted generous incentive packages, created investment promotion agencies, and launched expensive infrastructure development programs. At the same time, they also kept in place relatively generous systems of social protection uniquely geared to the temporarily, partly, or wholly “nonproductive” groups of society.

    The simultaneous pursuit of costly and contradictory social objectives financed by only a...

  11. 5 Neocorporatism and Weak States: The Southeastern European Countries
    (pp. 182-222)

    A high degree of heterogeneity distinguishes the Southeastern European group from the Baltic and Visegrád regime clusters. Uniquely in the postsocialist world, Slovenia exhibits all the attributes of Western European small states: economic openness, protective and efficiency-enhancing compensatory policies, macroeconomic stability, and governance by established democratic and neocorporatist institutions. In contrast, economic opening, market institution building, and democratization proved to be slow and conflictual processes, while corporatism failed to acquire systemic significance, in Bulgaria, Romania, and Croatia.

    Over time and across the Southeastern European cases, wide variation in state capacity and shifts in the balance of power among labor, capital,...

  12. 6 The Return of Hard Times
    (pp. 223-258)

    With the outbreak of the crisis of the late 2000s, the precariousness of the new postsocialist order has once again come to the fore. Global financial instability and recession have posed difficult challenges to all the variants of East Central European capitalism. By 2009, most of the new EU member states had accumulated major economic imbalances and had gone through deep recessions, which have in some countries lasted for several years. To defend their currencies and keep their economies afloat, three states—Hungary, Latvia, and Romania—had to turn for help to the IMF and the EU. In addition, governments...

  13. Conclusion: Postsocialist Capitalism Twenty Years On
    (pp. 259-274)

    Two decades ago Valerie Bunce suggested that East Europeanists take seriously the fact that “while post-communism can be defined by where it is heading (or, more to the point, might be heading), it must also be defined by its point of departure: that is, by state socialism and its collapse.”¹ She also stressed that the systemic change was “under-determined” and might lead to varied and surprising outcomes. This book responds, as it were, to these important early suggestions with new insights into the intricate relationships between socialism and the emerging capitalism. Concretely, we see our contribution in theorizing the patterned...

  14. Index
    (pp. 275-288)