Critical Junctures and the Politics of Institutional Adjustment

Abstract

This chapter demonstrates how political factors determined the path of postsocialist development and international market specialization in the 2000s. International market roles of individual economies built upon the cumulative advantages in transnational production Central and Eastern European economies gained during their socialist experience, but it was the political challenge of turning cumulative advantage into a sustained comparative institutional advantage that brought important gains in the capital, technological and skill base of the economy that concerned the politics of reform in the 1990s and 2000s. It was here that the interplay between industrial restructuring and reform of other institutions of the political economy came to matter. The chapter examines these policy patterns to show the divergent specialization of Hungary and Slovakia into an assembly platform, Czech Republic and Slovenia into an intermediate producer, and Bulgaria, Poland, and Romania into combined roles.