Dorothee Bohle

Capitalism without compromise: Strong business and weak labor in Eastern Europe’s new transnational industries

This paper contributes to the debate on the social impact of globalization. It focuses on the mediating role of the sectoral pattern of transnational production relocation to the postcommunist economies of Eastern Europe. We argue that the collapse of the socialist heavy industries and the eastward relocation of traditional light industries initially forced the social conditions of the East European countries to converge at the bottom and deepened the gap between the West and the East. Later, the east-ward migration of high-skilled labor and capital-intensive industries and jobs led to decreasing social disparity between the West and some of the former socialist countries. However, convergence appears uncertain, costly, and uneven, and coincides with increasing social disparity within the group of East European new members and candidates of the European Union.

The State, Internationalization, and Capitalist Diversity in Eastern Europe

This article contributes to the debate on varieties of capitalism in Eastern Europe in three ways. First, four types of capitalist regimes that differ in particular institutional configurations and performances are empirically identified: the state-crafted neoliberalism of the Baltic States, the more directly world-market driven neoliberalism of the CIS countries, the embedded neoliberalism of the Visegrád countries, and neo-corporatism in Slovenia. Second, the diversity of capitalist regimes – is explained as a result of the complex interplay of external factors – specifically world commodity and financial markets, international institutions and foreign direct investment – and different state capacities to implement reform choices. Third, caution is given against an uncritical application of the dominant approach of comparative political economy, varieties of capitalism, since it is ill suited to study the emergence of institutions, their international embeddedness, and the semi-peripheral character of East European capitalisms.

Varieties of Capitalism and Capitalism « tout court »

The article reviews the ‘‘Varieties of Capitalism’’ (VoC) approach and its large impact on the field of comparative political economy. It situates the approach within the field, and stresses its specificities. The article argues that VoC’s firm-centeredness, parsimony, and reliance on conceptual tools borrowed from economics, fit better than other approaches to a Zeitgeist formed in the context of the demise of Western capitalism’s alternatives, and the globalization-induced shift of societies’ center of gravity away from politics towards firms and markets. The article then revisits major debates that have followed the publication of the seminal Hall-Soskice book. The debates have revealed that VoC’s greatest strengths, in the end, turn out to be obstacles when it comes to analyzing problems of contemporary capitalism.

Post-socialist housing meets transnational finance: Foreign banks, mortgage lending, and the privatization of welfare in Hungary and Estonia

ABSTRACT This paper asks how public policies have shaped the build-up of crisis-prone housing finance markets and whether they have mitigated or reinforced the associated risks for citizens in East Central Europe. Analyzing the mortgage lending booms and busts in Hungary and Estonia, the paper finds that different policy priorities did not matter too much for the build-up of the mortgage boom and the associated risks households had to face. Rather, early decisions for encompassing house privatization and the non-existence of mortgage markets have led to a pent-up demand for housing finance, while the transnationalization and EU convergence of the financial sector have provided the supply for mortgage lending from the early 2000s on. Policy-makers in both countries, albeit to different degrees, have supported the mortgage boom and have by-and-large failed to correct for the risks of their population. In the wake of the global financial crisis, however, policies started to sharply diverge. While the Estonian government has relied on market mechanisms and private market actors to cope with the crisis, the Hungarian government engaged in far-reaching interventionist policies to unmake some of its devastating consequences for indebted house-owners. The paper explains its findings by the combination of different welfare state traditions and patterns of party competition.

East-Central Europe's Quandary

Abstract:The article discusses strategies the Central-East European EU member states have applied to protect their populations against the social risks stemming from transformation, foreign-led development and the current economic crisis, and asks how they came about. Some governments spend relatively little on social protection, but employ a high share of their workforce in the public sector. Others offer the most generous support for pensioners and other underemployed groups. As shown in detail in the Hungarian and Latvian case, divergent welfare strategies can be traced back to different socialist legacies and perceptions of the past.

Race to the Bottom? Transnational Companies and Reinforced Competition in the Enlarged European Union

Starting with the world economic crisis of the 1970s, European integration underwent a fundamental change. Historically, European institutions mainly secured the diverse national development paths without interfering with the domestic market order. This changed with the main integration projects since the 1980s. With the Internal Market, European Monetary Union and the Lisbon Strategy a new mode of integration has been established, which aims at enhancing competitiveness of the Member States, and the European Union (EU) as a whole. By directly taking over certain state functions as well as by reshaping significantly the framework in which nation states operate, the EU has enhanced regime competition between different national systems of governance.

Negotiating the effects of uncertainty? The governance capacity of collective bargaining under pressure

The article makes four main arguments. First, that collective bargaining has the capacity to mitigate the negative externalities arising from market volatility, and the process of marketization, by establishing arrangements which provide substantive and procedural certainty for both workers and employers, and in particular greater security for workers. Secondly, that multi-employer bargaining arrangements are better equipped to fulfil this function than single-employer ones. Thirdly, that there are institutional differences amongst multi-employer bargaining arrangements concerning governance of bargaining at the company level which considerably influence their capacity to promote certainty and security. Fourthly, that under the pressures brought about by the crisis, the marketization of multi-employer collective bargaining is being accelerated either by the parties themselves or, more disruptively, by intervention from governments under pressure from international and European institutions, with potentially damaging consequences for the ability to address negative externalities.

Internationalisation: An Issue Neglected in the Path-Dependency Approach to Post-Communist Transformation

With this essay I wish to join the debate on the future of capitalism after communism. In assessing the contribution of institutionalist approaches to our understanding of post-communist transformation, I shall criticise them mainly for the insufficient attention they pay to the question of how global economic integration is shaping both the restructuring of the Eastern European political economies and their futures.

State, Capital and Labour in Transition: The Political Economy of Capitalist Diversity in Eastern Europe - Introduction to special issue

As we put the final touches to this special issue of Competition and Change an ultra conservative, neo-populist government in Poland have forced the resignation of another ‘informer’ for the communist secret services, the repercussions of neo-Nazi violence during Hungary’s fiftieth anniversary celebration of the 1956 revolution continue to reverberate around Budapest, and the Russian oil company Transneft is threatening to cut off oil supplies to Europe. These are ‘interesting’ times for the former communist states of Eastern Central Europe (ECE) and a reconsideration of the region’s relationship to globalization, which would be of interest at any time, seems particularly apposite at this juncture, stimulated as much by European Union (EU) accession as by continuing global economic integration. It now seems clear to many that, like the construction of socialism after 1945, so the reconstruction of capitalism after 1989 has not just been a matter of applying a proven blueprint for the construction of a New Jerusalem on each national territory. Rather it has been the result of intense social conflicts whose outcomes were importantly shaped by the specific historical context of the global political economy. For the most part, ‘transitological’ studies of ECE, and the Soviet bloc as a whole, since 1989 have only incidentally acknowledged the significance of the global context in which capitalism was restored. Uniquely in the world, ECE has built democratic capitalism at the same time as it has become integrated into the globalizing and regionalizing world economy. For us, and the contributors to this special issue, this has generated the following set of research questions that we attempt to address: what types of capitalism have emerged from this unique challenge? How have global and European constraints and opportunities shaped the local political economies of ECE? How have local actors made use of these constraints and opportunities?

European Integration, Capitalist Diversity and Crises Trajectories on Europe’s Eastern Periphery

ABSTRACT European policy responses to the Global Financial Crisis and its European manifestation have set off a scholarly debate whether different national varieties of capitalism are equally able to cope with deepened European integration. To date, this debate has mostly focused on the contrasting fates of the thriving northern export-oriented capitalisms and the ailing southern European ones. This paper seeks to broaden the debate by focusing on Europe’s Eastern periphery. It argues that a combination of domestic transformation strategies and the EU’s accession policies resulted in two different growth regimes on Europe’s Eastern periphery: a dependent export-driven in the Visegrád countries and a dependent debt-driven in the Baltic States. On the basis of the pre- and post-crisis trajectories of these two growth models, this paper finds that because East Central European capitalisms were profoundly shaped by EU integration, they are on balance also more compatible with deepened integration than Southern European capitalisms.