Jan Drahokoupil

International Integration, Varieties of Capitalism, and Resilience to Crisis in Transition Economies

Abstract This article offers a comprehensive analysis of the different effects of the economic crisis from 2008, across all transition economies with a testable framework, that relates vulnerability to specific forms of development since 1989. The key to the framework is the identification of forms of integration into the international economy, with distinctions between different export structures and dependence on other sources of foreign-currency earnings. These created channels for transmission of the crisis which differed between countries. The analysis draws on a three-level research design, combining a variable-oriented regression analysis with case-oriented comparisons among similar cases, and within-case analysis of individual countries.

Averting the funding-gap crisis: East European pension reforms since 2008

This article analyses pension reforms in Central and East European countries in the aftermath of the 2008 financial crisis. The crisis revealed unresolved problems in the implementation of previous reforms, namely the financing of the transition costs. In their attempts to solve the funding-gap issue, the reforms needed to address legacies of past choices as well as the exceptional circumstances of the crisis. The interaction of fiscal constraints and political conditions shaped the variety of these reform outcomes.

The Investment-Promotion Machines: The Politics of Foreign Direct Investment Promotion in Central and Eastern Europe

Abstract A variety of foreign-led economies emerged in Central and Eastern Europe in the late 1990s. State economic strategies in the Visegrad Four region (V4) of the Czech Republic, Hungary, Slovakia and Poland have converged towards a distinct model of competition states. This article investigates the politics of investment attraction and promotion of particular investors within the states and regions in Central and Eastern Europe. It analyses coalitions of social actors which form in the process of bidding for investors and promoting them in the regions. These coalitions, the investment-promotion machines, can be understood as power blocs underpinning the competition state at the regional level. The analysis draws primarily on case studies of attraction and promotion of foreign direct investment (FDI) in the Czech Republic and Slovakia.

Foreign direct investments in business services : transforming the Visegrád Four Region into a knowledge-based economy?

Foreign direct investments (FDIs) in the service sector are widely attributed an important role in bringing more skill-intensive activities into the Visegrád Four (V4). This region—comprising Poland, the Czech Republic, Hungary and Slovakia—relied heavily on FDIs in manufacturing, which was often found to generate activities with limited skill content. This contribution deconstructs the chaotic concept of “business services” by analysing the actual nature of service sector activities outsourced and offshored to the V4. Using the knowledge-based economy (KBE) as a benchmark, the paper assesses the potential of service sector outsourcing in contributing to regional competitiveness by increasing the innovative capacity. It also discusses the role of state policies towards service sector FDI (SFDI). The analysis combines data obtained from case studies undertaken in service sector outsourcing projects in V4 countries. Moreover, it draws on interviews with senior employees of investment promotion agencies and publicly available data and statistics on activities within the service sector in the region. It argues that the recent inward investments in business services in the V4 mainly utilize existing local human-capital resources, and their contribution to the development of the KBE is limited to employment creation and demand for skilled labour.

Political Economy of Crisis Management in East-Central European Countries

The financial and economic crisis in the Central and East European countries raised the profile of economic policy themes that relate to the role of taxation and state spending. The key policy differences related to public budgets and support for a demand stimulus. Responses fall broadly into two categories that we link to a social-democratic and a neo-liberal response. The distinction indicates that the policy responses were linked to the party affiliation of the government on the left–right spectrum. There were some remarkable common trends that cannot be explained by the logical requirements of the economic situation alone. There are differences in timing and in severity, but every country has at some point moved towards a policy of balancing the budget by making cuts. In all cases there were cuts in benefits for marginal groups in society and a switch towards indirect rather than direct taxes. These carry clear distributional implications.

Introduction: Towards a Critical Political Economy of European Governance

Just before this book went into production, the Irish rejected the so-called Lisbon reform treaty, that is, the treaty that after long and arduous negotiations was designed as a substitute for — and containing almost identical institutional reforms as — the European Constitution that had been voted down three years before by the French and the Dutch in the referendums of 29 May and 1 June 2005. Although it is too early to analyse the causes of the Irish ‘no’, or to predict the precise consequences of this dramatic event (beyond the fact that its planned entry into force of the treaty in 2009 now seems unlikely), it is clear that it is another slap in the face of Europe’s political elites, and has brought the European Union (EU) into a new deep crisis after it had barely recovered from the one it faced when the Constitutional project turned out to lack the necessary popular legitimacy.

The Politics of Flexibility: Employment Practices in Automotive Multinationals in Central and Eastern Europe

In this article we investigate the flexibility strategies of foreign automobile producers in three Central and Eastern Europe countries, where employment flexibility has become a major issue and an area of conflict with unions. We focus on nine subsidiaries in the Czech Republic, Slovakia and Hungary, and argue that flexibility strategies were shaped by parent company practices, the flexibility needs of individual affiliates and the relative strength of labour in negotiating the implementation of these practices. Given the relatively weak industrial relations institutions in the region, the relative strength of labour is conditioned primarily by market factors and parent company contexts. The findings thus highlight the importance of political resources and agency of actors in shaping employment policies.

Who Won the Contest for a New Property Class? Structural Transformation of Elites in the Visegrád Four Region

This paper analyses the transformation of elites in the Visegrad Four countries (namely the Czech Republic, Hungary, Poland and Slovakia). Drawing on a process-tracing analysis, it argues that the emergence of foreign-led economies in the late 1990s was intertwined with political processes in which domestic forces linked to foreign capital were transformed into major elite segments with considerable influence. This elite segment, the comprador service sector, proved to be politically active within the states in Central and Eastern Europe and organized various mechanisms of representation within the state and beyond.

Linking Labour Regimes and Technological Innovation in Central and Eastern Europe: The Case of Automotive and Software Industries

This report studies the link between labour regimes and technological innovation in Central and Eastern Europe, analysing in some detail two key sectors that have gained in importance in the economies of the region: the automotive and software industries. Defining success as a move up-market in terms of production and/or gaining a dominant and stable share in the world markets, both sectors have been successful regionally and, in certain aspects, also globally. Yet, the character and levels of innovation and RD b) openness to foreign labour as a source of knowledge in some cases and in others of numerical flexibility; and c) the existence and importance of clustering as a source of knowledge-sharing and knowledge-generation. Employment and labour-market flexibility and its links to legal and institutional frameworks are cross-cutting issues that come back in the three overarching themes. Flexibility takes different forms in the two sectors. While it might not be directly related to the innovation process as such, it has contributed to the increased competitiveness of the two sectors and supported a shift up-market in sophistication. Our general finding is that for both types of innovation – ‘imported’, which prevailed in automotive sector and ‘indigenous’ that was shown to exist fairly widely in the software industry – the availability of human capital, its structure and skill-sets have been important in order for the higher-end activities to be localised or nurtured in Central and Eastern Europe. However, the differences in the generation and implementation of innovation and in the nature of the production processes are reflected in significant differences in labour regimes.

The Platform Economy and the Disruption of the Employment Relationship

This policy brief considers the impact of online platforms on labour markets and on the employment relationship in particular. It discusses the importance of outsourcing platforms, arguing that the ‘collaborative economy’ used by the European Commission (EC) is a misleading concept, as the trend is in fact just an extension of the market mechanism.The authors also propose concrete policies that would address the risks related to platform-mediated work.