Post-communist capitalism

About this book

This dissertation contains three essays on economic transition and institutional change in Central and Eastern Europe. The first paper analyzes patterns of economic coordination in Estonia and Slovenia, two post-socialist countries in Central and Eastern Europe, and argues that Estonia and Slovenia are good examples of liberal and coordinated market economies as defined in the Varieties of Capitalism literature. The main focus is on industrial relations and wage bargaining, but other areas studied by this literature are considered as well. The paper also explores the origins of these institutions by examining the interaction of inherited institutions and strategic policy choices, esp. the effects of privatization and monetary policy on formalizing coordination. The chapter also considers some general implications of this analysis for the study of post-socialist transition and comparative capitalism. The second paper seeks to explain the diversity in economic governance and industrial relations across the eight transition countries that became members of the EU in 2004. It argues that three different models of economic governance emerged in the 1990s--a liberal market economy model (associated with pluralist interest representation), a coordinated model (associated with corporatist interest representation) and a mixed model, in which social pacts played a significant role. The paper accounts for this variation by developing a theory based on networks. It seeks to demonstrate that two factors--the degree to which the communist system fostered horizontal network ties and the degree to which ownership reform preserved and promoted network ties--can account for the type of economic governance prevalent in each country. The four case studies of Slovenia, Hungary, the Czech Republic and Estonia are used to explore the causal mechanisms. The third paper examines the development of trade policy in Poland and Estonia from the early 1990s until EU accession in 2004. The paper also develops a typology of historical sequences based on two dimensions--extraordinary politics and path breaking--to categorize the policy evolution and processes of change in these countries. It examines why both countries liberalized trade during a period of extraordinary politics at the outset of the transition process, but why this only led to a critical juncture and sustained liberalization in Estonia. The paper suggests that policy change during periods of extraordinary politics are best understood by examining the structure of executive politics and the process of preference formation, whereas the sustainability of trade policy reform is best understood by analyzing interests and institutions.