Varieties of Capitalism, Varieties of Vulnerabilities: Financial Crisis and its Impact on Welfare States in Eastern Europe and the Commonwealth of Independent States

Historical Social Research, Vol. 2, No. 35, pp. 266-295, 2010

31 Pages Posted: 15 Nov 2009 Last revised: 26 May 2010

Jan Drahokoupil

University of Mannheim - Mannheim Centre for European Social Research (MZES); European Trade Union Institute (ETUI)

Martin Myant

University of the West of Scotland

Date Written: November 15, 2009

Abstract

This paper investigates the implications of the 2008 financial crisis on welfare states and the capitalist diversity in the post-communist world, including Eastern Europe and the Commonwealth of Independent States. It analyzes three political-economic varieties in the region: those of capitalism, welfare, and vulnerabilities to the crisis. The three varieties are linked, but there is also a considerable variation given the importance of political and policy factors. Economic growth models created different political and economic constraints on policies of adjustment to the crisis. In particular, currency substitution was associated with strong political preferences for defending exchange rates, with adjustment through reductions in public spending and wages. A variety of welfare models was associated with different political constituencies for welfare provision. The interplay of these constraints and political factors together with intervention of international institutions shapes the nature of welfare state adjustments. Early developments indicate also some unexpected outcomes.

Keywords: financial crisis, welfare state, varieties of capitalism, Eastern Europe, Russia; Commonwealth of Independent States

Suggested Citation

Drahokoupil, Jan and Myant, Martin, Varieties of Capitalism, Varieties of Vulnerabilities: Financial Crisis and its Impact on Welfare States in Eastern Europe and the Commonwealth of Independent States (November 15, 2009). Historical Social Research, Vol. 2, No. 35, pp. 266-295, 2010. Available at SSRN: https://ssrn.com/abstract=1506522

Jan Drahokoupil (Contact Author)

University of Mannheim - Mannheim Centre for European Social Research (MZES) ( email )

D-68131 Mannheim
Germany

HOME PAGE: http://drahokoupil.blogspot.com

European Trade Union Institute (ETUI) ( email )

B-1210 Brussels
Belgium

Martin Myant

University of the West of Scotland ( email )

Paisley High Street
PA1 2BE
Paisley, Scotland PA1 2BE
United Kingdom

HOME PAGE: http://www.paisley.ac.uk/schoolsdepts/business/cces/researchers/martin-myant.asp

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