The Economic Sources of Social Order Development in Post-Socialist Eastern Europe

Richard Connolly

• Publisher: Routledge
• Year: 2012
• Print ISBN: 9781138815766
• eBook ISBN: 9781136213168
• Topic: Scienze sociali
• Subtopic: Studi sull'etnia

Nearly twenty years after the collapse of socialism, the countries of post-socialist Eastern Europe have experienced divergent trajectories of political development. This book looks at why this is the case, based on the assumption that societies, or social orders, can be distinguished by the extent to which competitive tendencies contained within them – economic, political, social and cultural – are resolved according to open, rule-based processes.

The book explores which economic conditions allow for increased levels of political competition, and it tests the hypothesis that the nature of a country's ties with the international economy, and the level of competition within a country's economic system, will shape the trajectory of political competition within that society. The book goes on to argue that after several decades of relative 'bloc autarky' during the socialist period, the ongoing process of reintegration with the international economy across the post-socialist region has resulted in distinct patterns of structural economic development, and that that these patterns are of crucial importance in explaining the variation in social order type across the post-socialist region. By offering a more precise analysis of the causal mechanisms that link economic and political competition, the book makes a useful contribution to research on the different patterns of political behaviour that have been observed across the post-socialist region since the collapse of the socialist regimes.

1 Introduction

This book offers a fresh perspective on why, nearly twenty years after the collapse of socialism, the countries of post-socialist Europe have experienced such divergent trajectories of political development.¹ The study is based on the assumption that societies, or social orders, can be distinguished by the extent to which competitive tendencies contained within them – economic, political, social and cultural – are resolved according to open, rule-based processes. Social orders are also assumed to exhibit a ‘double balance’ between political and economic systems, in which political systems will tend to reflect the prevailing economic system within a society, and that changes in one are necessary for changes in the other. In turn, this has implications for the wider form of social order; if a social order is to be characterized as open-access then the economic system must provide the conditions that facilitate greater political competition. In short, the two arenas are assumed to be mutually constitutive. The focus of this study will therefore be on tracing which economic conditions facilitate increased levels of political competition. Principally, it will test the hypothesis that the nature of a country's ties with the international economy, and the level of competition within a country's economic system, will shape the nature of political competition within that society. After several decades of relative ‘bloc autarky’, the ongoing process of reintegration across the post-socialist region has resulted in varying patterns of interaction with the international economy. This study focuses primarily on the links with the international economy that are formed through export sectors.

A wide body of literature has sought to identify the determinants of variation in political development across the post-socialist region. Explanations for this variation that have been offered so far include, but are not limited to: the role of ethnicity and nationalism (e.g. Horowitz, 1993; Karatnycky, 2002); the success or otherwise in building capacious state structures (e.g. Holmes, 1996; Ganev, 2005, 2007; Colton and Holmes, 2006); the choice of institutional arrangements after the collapse of socialism (e.g. Frye, 1997; Elster et al., 1998; Ostrow, 2000; Fish, 2006); the extent of political party development (e.g. Kitschlet et al., 1999; Lewis, 2002; Kopecky, 1995, 2008); the strength of civil society (e.g. Linz and Stepan, 1996; Ekiert and Kubik, 1999; Howard, 2003; Uhlin, 2005); geographical location (Kopstein and Reilly, 2008); the choices made by elite political actors (e.g. Przeworski, 1991; Eyal et al., 1999; Haughton, 2005); initial conditions and the legacies inherited from the socialist era (e.g. Stark, 1994; Crawford and Lijphart, 1995; Bruszt and Stark, 1998; Hedlund, 1999; McFaul, 1999); and the role of external forces, such as the European Union (e.g. Jacoby, 2004; Vachudova, 2005; Hanson, 2007a). These explanations all have their merits and constitute valuable contributions to the debate surrounding the determinants of the divergent trajectories of political development across the region.

Few studies, however, have examined the role of structural economic variables in explaining political outcomes. Where economic variables are considered, it is very often as the dependent variable, with political factors being used to explain why, for example, some countries have been more successful than others in undertaking economic reform (e.g. Fish, 1998, 2005; Hellman, 1998), why some countries adopted the privatization strategies that they did (e.g. Hare et al., 1999; Gould, 2003; Appel, 2004), and how institutional structures have shaped the emergence of different ‘varieties of capitalism’ across the region (e.g. Hall and Soskice, 2001; Amable, 2003; Lane and Myant, 2007). Where economic phenomena are considered as explanatory variables, trends in economic output have been considered to be an important factor in shaping political development. For instance, sustained economic growth has been posited as a necessary condition for the development of democratic tendencies (e.g. Lipset, 1959; Rostow, 1961; Bunce, 2000; Janos, 2000). However, cases where countries that have experienced periods of high rates of economic growth have become more, not less, authoritarian indicate that perhaps economic growth is not a satisfactory explanation on its own (see, for example, Karl, 1997; Ross, 2001; Fish, 2005). Rather, it suggests that what a country produces, and how its economy is organized, might offer a more plausible explanation of patterns of political development.

The structural characteristics of an economy, the relationship between its constituent organizations, and the implications that these arrangements have for the development of competitive political tendencies, are the subjects of this study. The crucial importance of political variables in explaining political outcomes across the post-socialist space is not disputed. However, the conception of politics that underpins this book is much broader than studies that focus primarily on political explanations of political outcomes. For example, where comparative research has focused on, for example, institutional design – i.e. on the constitutional arrangements of a country, the distribution of legislative and executive functions, and electoral rules – it is often assumed that political outcomes are contingent on choices made at the onset of the reform process (Fish, 1998; Hellman, 1998). This neglects the importance of political and, more frequently, economic legacies from the socialist era, broader political factors beyond the scope of how central governments are organized, and on structural economic factors that shape the incentives for certain types of political behaviour. It is this imbalance that this study seeks to redress.

Broadly speaking, the focus throughout this book is on the relationship between the structure of a country's economic system and the types of social order that have developed across the post-socialist region. Specifically, attention is focused on how different patterns of integration with the international economy, primarily through the role of export sectors, have shaped the development of different types of social order. Social order type – defined in greater detail in Chapter 2 – broadly refers to the extent to which competition within societies is resolved according to impersonal, universally applied rules. Thus, unlike many existing studies in comparative political economy, the explanatory framework emphasizes not the role of the state in shaping the economy (e.g. Amsden, 1989; Evans, 1995, Wade, 2004), but instead on how structural economic variables shape politics (e.g. Shafer, 1994; Karl, 1997; Robinson, 2004; Greskovits, 2005).

Although progress or otherwise in developing democratic institutions across the post-socialist region is the subject of a large body of existing research, the focus here is not on explaining variation in the formal, procedural indicators of democracy. Instead, the dependent variable – the type of social order – is more narrowly defined to encompass the extent to which competition within societies (in both the economic and political arenas) is resolved according to impersonal, universally applied rules. In this sense, issues of accountability, the rule of law, and the prevalence of corruption are emphasized more directly than the procedural aspects of democracy (e.g. elections, constitutions, formal institutional configurations, etc.). These variables do, however, act as a measure of the quality of democracy in societies, particularly where many of the formal institutions of democracy may have already been adopted but only in a manner that is inconsistent with the substantive meaning of democracy (Wilson, 2007; Berg-Schlosser, 2007). Thus, while the focus is not on democracy per se, it is on those very factors which determine whether or not the informal practices of a society are consistent with the formal, procedural institutions. As such, any conclusions drawn on the relationship between economic structure and the dependent variable, as defined in this study, are likely to have implications for the wider study of democratic development, both across the post-socialist region and elsewhere.

The conceptual framework presented in this study is, however, also broader than much of the existing research on, for instance, the processes of state formation across the post-socialist region (see, for example, Gryzmala-Busse, 2006; O'Dwyer, 2006; Ganev, 2007). Although these studies also explore the impact of competition on political outcomes, their attention is directed towards the narrower task of explaining patterns of state exploitation by political parties through the development of patronage networks. In this sense, the subject of this book is broader because any variation in type of social order has much wider implications than simply for patterns of state exploitation, or relations between political parties and the state. While the type of social order prevalent in any given society will surely help explain why some states are subjected to more predation by particular organizations than others, it also has implications for myriad other spheres of political and economic life. Furthermore, where these studies identify political competition as the key to restraining ‘rent-seeking’ across the post-socialist region, the sources of this political competition remain ambiguous (Hellman, 1998; Grzymala-Busse and Jones-Luong, 2002).² In short, this study proposes an analytical framework that might lead to a greater understanding of why some societies exhibit greater levels of economic and political competition than others.

Given that the object of this study – variation in social order type – is broadly related to a range of other fields of research, this book makes a contribution to two main existing areas of enquiry. First, it is hoped that the study will make a contribution to research on institutional explanations of political behaviour. As will become clear in the next chapter, the dependent variable is defined in a relatively new manner, with the concept of social orders still very much in its infancy in terms of the volume of academic attention that has been paid to it. So far, discussion of social orders – as defined by North et al., (2006, 2007, 2009) – and their determinants has been limited to the mature democracies of Western Europe and North America. In examining social order variation in less economically and politically advanced countries, this study represents an application of an original conceptual framework in a new setting. The use of a structural economic explanatory variable offers an additional, original explanation of social order variation to those posited by North, Wallis and Weingast. Indeed, while structural economic explanations of political outcomes are not entirely new – they have, for example, been used in both transition (e.g. Robinson, 2004; Fish, 2005) and non-transition (e.g. Paige, 1991; Karl, 1997) contexts – the precise causal relationship as specified in this study is new. In particular, the emphasis on how economic competition and political competition is mediated through organizations located in the civic, political and economic sphere (see Chapter 2) offers a simple, yet compelling, explanation of how changes in the production structure of an economy can lead to increased competition at the political level. In this sense, this study builds on existing concepts and develops them further, offering a more precise specification of the causal mechanisms that link economic and political competition than which currently exist.

Second, this study is intended to make a contribution to the existing research on the different patterns of political behaviour that have been observed across the post-socialist bloc since the collapse of the socialist regimes between 1989 and 1991. Unlike many of the existing accounts of political behaviour in the post-socialist area, the dependent variable is defined not in procedural terms, but instead in a way that focuses attention on those substantive factors that offer a more meaningful measure of institutional development across the region. Again, while existing studies have also examined institutional development across the region, the specification of the variables, and the causal mechanisms linking them, has not been examined in the post-socialist context. Moreover, if the use of a structural economic explanatory variable is relatively rare in the wider literature on institutional political economy, it is a similarly under-researched determinant of institutional development in the post-socialist region.

What follows is an exercise in testing a small number of conceptually simple, but original, hypotheses. These hypotheses are derived from a broad range of sources and disciplines, including political science, political economy, institutional economics and politics, and industrial organization. While this seemingly diverse array of theoretical influences makes classification of the subject area of this research somewhat difficult, it is probably best viewed simply as an exercise in comparative political economy. It is not an explanation of economic outcomes per se (e.g. variation in levels of output, employment levels, etc.), although it is undoubtedly true that the nature of a given social order has important implications for the organization of economic activity that takes place within that society. The fact that this book represents an attempt at providing an original explanation of a relatively freshly defined dependent variable also means that the conceptual framework, and any conclusions derived from this study, should be viewed not as definitive, but instead as merely the preliminary stages of the construction of a more robust explanation of institutional development.

How the study is approached

This is primarily a study in comparative political economy, making use of data – both qualitative and quantitative – for nineteen countries over a period of nearly twenty years. As outlined above, some chapters compare more countries than others, with Chapter 4 providing a very broad overview of the relationship between the two main variables across the nineteen countries under examination in this study, while the case study chapters examine only one or two examples at a time. Broadly speaking, the comparative method centres on three main objectives (Landman, 2000, pp.4–12). The first objective of comparison is contextual description; the process of describing the political phenomena and events of a particular country, or group of countries. Quite simply, this enables political scientists to describe the main features of different countries. Good description serves the purpose of providing the raw data that can permit higher levels of explanation. The data contained in Chapters 3 and 4, along with the observations made in the case study chapters perform this function throughout the book. The second objective of comparison is hypothesis-testing, the raison-d'être of newer fields of comparative politics (Mayer, 1989). Comparisons of countries enable rival explanations to be ruled out and hypotheses derived from certain theoretical perspectives to be tested. This study performs this role by first generating a series of simple hypotheses in Chapter 2, identifying a method of measurement in Chapter 3, and then marshalling the evidence furnished from both the broad cross-country data and the case studies to test these hypotheses. The third objective of comparison is prediction based on the generalizations and conclusions that emerge from rigorously testing hypotheses. This study does not focus on making predictions about other countries, but the conclusions drawn throughout the study can form the basis for making predictions in future research.

While these constitute the objectives of the comparative method, there are both advantages and limitations associated with it that ought to be considered. In order to illustrate these differences, it is should be noted that the central distinction between different comparative methods depends on the trade-off between the level of abstraction and the scope of countries under examination (Mair, 1996). In general, the greater the level of conceptual abstraction, the more potential there is for the inclusion of a large number of countries, allowing conceptual frameworks to ‘travel’ across different contexts (Sartori, 1970, 1994). Alternatively, focus on one country or a few countries permits researchers to use fewer abstract concepts, which are more tailored to the specific contexts under scrutiny. Representing all three types of analysis (large-n, small-n, and single-case studies) as comparative differs from some other typologies contained in the literature on comparative politics (e.g. Lijphart, 1971; Collier, 1991).³ For example, single-case studies are not always considered comparative even if they have comparative merit. However, if research – even in a single-case study – strives to make larger inferences about political behaviour through some form of comparison and uses concepts that are applicable to more than one country, it should be considered comparative (Lichbach and Zuckerman, 1997, p.4).

The advantage of large-n studies lies in the extensive coverage of countries that facilitates stronger inferences and theory-building, since a hypothesized relationship can be demonstrated to exist with a greater degree of certainty. A second advantage lies in the ability to identify ‘deviant’ cases or ‘outliers’. These are cases where values on the dependent variable are different to than those that would be expected given the values on the independent variable. There are, however, several disadvantages to the large-n study. First, because most large-n studies tend to be of a quantitative nature, researchers can often be constrained by the availability of good quality data.⁴ Second, measurement of variables can also be problematic. Finally, the high level of conceptual abstraction can sometimes lead to a misspecification of the causal relationship between the two variables (i.e. a Type I error).

Single-case studies exhibit the opposite tendencies. As noted above, a single-country study can be considered comparative if it employs or develops concepts that are applicable to other countries (i.e. as opposed to ‘atheoretical’ or ‘configurative–ideographic’ studies). Such studies are useful for generating hypotheses for theories that are yet to be fully specified, or as ‘plausibility probes’ (Eckstein, 1975, p.108), where the study represents the first test case for a fully specified theory. Single-country studies can also be used to confirm or infirm existing theories, or to identify deviant countries in the hope of testing existing hypothesized relationships more rigorously. While enhanced detail and attention to country-specific phenomena are obvious advantages of single-country studies, the main disadvantage lies in the temptation to treat each case as ‘unique’, effectively disregarding the comparative method.

Finally, the ‘focused comparison’ (Hague et al., 1992) of only a few cases achieves control through the careful selection of countries that are analysed using a level of conceptual abstraction that falls somewhere between the single-country study and the large-n study. This enables the researcher to test more variables in greater depth. This type of study is often referred to as ‘case-oriented’ (Ragin, 1994), due to the country being the usual unit of analysi...

Table of contents

• Cover
• Half Title
• BASEES/Routledge Series on Russian and East European Studies
• Full Title
• Copyright
• Contents
• List of illustrations
• Acknowledgements
• 1 Introduction
• 2 Economic structure, the international economy and social order development
• 3 Data description, measurement and case selection
• 4 The international economy and political economy in the post-socialist region: an historical overview
• 5 Economic structure, the international economy and the collapse of the Soviet Union
• 6 Russia: natural resource sectors and limited-access social order development
• 7 Belarus and Romania: contrasting cases in structural transformation and social order development
• 8 Estonia: economic diversification and open-access social order development
• 9 Conclusion
• Notes
• Bibliography
• Index