Reassessing Varieties of Neoliberalism(s) on Europe’s Peripheries

• In Event: Poster Session: Division 13 Politics of (former) Communist Societies

Abstract

The type of capitalism emerging in post-communist Europe has been vigorously debated within the broader literature on the varieties of capitalism. A particular point of contention has been the applicability of the concepts generated in advanced capitalist democracies to the highly dynamic environment of the post-communist world. Nevertheless, the Great Recession and the accompanying sovereign debt crisis in Europe created an exogenous shock that threatened to upend the economic systems on both sides of the former Iron Curtain. These crises had especially profound implications for the periphery of the “old” (pre-eastern enlargement) EU. They also induced considerable transformations in the newer EU member states.

This paper focuses on Europe’s two peripheries - the older, Southern, periphery which struggled to catch up with the more developed European core throughout the 1980s and the 1990s and the newer, Eastern, periphery that emerged after the collapse of communism in 1989 and the 2004 and 2007 EU enlargement waves. We examine how the capitalist systems in these peripheries have changed over time. The analysis of temporal change is especially pressing given the complex consequences of the economic crisis and the populist backlash that many European countries confronted in its aftermath. In the east, we accept the narrative about the dominant role of foreign capital. When compared using a neoliberal rubric, such as the European Bank for Reconstruction and Development indicators, these economies paint a picture of convergence around a similar model of foreign capital-dominated neoliberal capitalism. In the South, we witness a progressive retreat of the state in some areas of economic activity following the crisis. However, we maintain that the neoliberal façade can belie structural differences that have important implications for the functioning of these economies, their resilience to market upheavals, and their ability to adapt and provide welfare for their population.

Thus, we analyze the structural features and historical trajectories of Southern and Eastern Europe thirty years after the fall of the Berlin Wall. Using cluster analysis, we investigate (1) whether countries fall into neat groups which clearly differ in terms of the characteristics of their ostensibly neoliberal model and, if they do (2) whether these groups remain stable over time or change in response to domestic political dynamics or a severe external shock such as the Great Recession. We compare all economies over three time periods—shortly before the economic crisis, during the economic crisis, and in the years of post-crisis recovery. We consider the following dimensions of their economic structures: volume and type of foreign capital, profile of industrial production, nature of labor markets, extent of the informal sector, state regulatory capacity, extent of redistribution, and the extent of state involvement in welfare provision.

Authors

• Bilyana Petrova, University of North Carolina, Chapel Hill

• Aleksandra Sznajder Lee, University of Richmond