A growing body of literature documents that under the economic and social pressures accompanying the post-communist transformations, governments in Central and Eastern European countries have been forced to change their spending habits. However, because most of these findings are based only on case studies or comparisons of a very small number of countries, it is difficult to observe to what extent the post-communist countries' development patterns share commonalities or develop in unique ways. This article explores in a quantitative comparative framework the effects of government composition, globalization, political institutions, and socioeconomic factors on total public, public social, and public education expenditures in twelve nation states. The authors find that the party composition of government has the most robust effect, in that left incumbency is positively correlated with total public and social expenditures. This result indicates that in this sense, post-communist countries are similar to Western democratic ones. The authors find only mixed results regarding the effects of globalization on public spending. This might suggest that globalization does not have a direct effect on the spending policies of these countries, but rather is mediated by domestic contexts.
See Michelle Dion, "Globalization, Political Institutions and Social Spending Change in Middle Income Countries 1980-1999" (paper presented at the annual meeting of the APSA, Chicago, IL, 2004).
2.
Klaus Armingeon and Romana Careja, Comparative Data Set for 28 Post-Communist Countries, 1989-2006 ( Institute of Political Science, University of Berne , 2006), http://www.ipw.unibe.ch/content/team/klaus_armingeon/comparative_political_data_sets/index_ger.html.
3.
Serbia and Montenegro is excluded because of its internal conflict over Kosovo; Bosnia and Herzegovina is excluded because at the time of writing the country is still under international administration (to end June 2008); Macedonia is excluded because for a long time the character of the state was contested by its significant Macedonian Albanian minority during the 1990s until the 2001 Ohrid Framework Agreement and the subsequent adoption of the amendments to the 1991 constitution.
4.
The "new poor" encompass working age, urban dwellers, and employed persons who because of the interplay between various elements of crushing economies, slide slowly into poverty. See Nicholas Barr, "Reforming Welfare States in Post-Communist Countries," in Transition and Growth in Post-Communist Countries: The Ten-Year Experience, ed. Lucjan T. Olrowski (Cheltenham: Edward Elgar, 2001): 169-218, and Dimitri A. Sotiropoulos, "The Social Consequences of Economic Transformation: Poverty, Inequality and Social Assistance in Eastern Europe, 1989-1999" (paper presented at the Conference Reforming Social Protection Systems in Europe: Co-ordination and Diversity, Nantes, France, 21-22 May 2004).
5.
Barr, "Reforming Welfare States in Post-Communist Countries."
6.
Martin Brusis, "Introduction: Residual or European Welfare Model? Central and Eastern Europe at the Crossroads," in Central and Eastern Europe on the Way into European Union: Welfare State Reforms in the Czech Republic, Hungary, Poland and Slovakia, ed. Martin Brusis (Munich : CAP working paper, 1999): 1-20.
7.
Paul Pierson, "Post-Industrial Pressures on the Mature Welfare States," in The New Politics of the Welfare State, ed. Paul Pierson (New York: Oxford University Press, 2001): 80-104.
8.
Mitchell A. Orenstein, "How Politics and Institutions Affect Pension Reform in Three Postcommunist Countries," World Bank Policy Research Working Paper Nr. 2310 ( 2000).
9.
Veto points are defined as democratic political institutions, which decrease the probability that the political status quo can be overcome. Ellen Immergut, Health Politics: Interests and Institutions in Western Europe (Cambridge: Cambridge University Press, 1992); Evelyne Huber et al., "Social Democracy, Christian Democracy, Constitutional Structure, and the Welfare State," American Journal of Sociology 99 (1993): 711-749; Giuliano Bonoli, "Political Institutions, Veto Points, and the Process of Welfare State Adaptation," in The New Politics of the Welfare State, ed. Paul Pierson (New York: Oxford University Press, 2001): 238-264.
10.
Orenstein, " How Politics and Institutions Affect Pension Reform."
11.
Dion, " Globalization, Political Institutions and Social Spending Change."
12.
Orenstein, " How Politics and Institutions Affect Pension Reform."
13.
John D. Stephens, The Transition From Capitalism to Socialism (London and Basingstoke: Macmillan, 1979); Manfred G. Schmidt, Wohlfahrtsstaatliche Politik unter bürgerlichen und sozialdemokratischen Regierungen (Frankfurt, UA: Campus, 1982); Walter Korpi, The Democratic Class Struggle (London, UK: Routledge and Kegan Paul, 1983); Gøsta Esping-Andersen, The Three Worlds of Welfare Capitalism (Princeton, NJ: Princeton University Press, 1990); Huber et al., "Social Democracy, Christian Democracy"; Kees van Kersbergen, Social Capitalism. A Study of Christian Democracy and the Welfare State (London/New York: Routledge, 1995); Manfred G. Schmidt, "When Parties Matter: A Review of the Possibilities and Limits of Party Influence on Public Policy," European Journal of Political Research 30 (1996): 155-183; Bernhard Kittel and Herbert Obinger, "Political Parties, Institutions, and the Dynamics of Social Expenditure in Times of Austerity," Journal of European Public Policy 10 (2003): 20-45; James P. Allan and Lyle Scruggs, "Political Partisanship and Welfare State Reform in Advanced Industrial Societies," American Journal of Political Science 48 (2004): 496-512.
14.
van Kersbergen, Social Capitalism.
15.
Huber et al., "Social Democracy, Christian Democracy," 718.
16.
For a different opinion, see Tim Bale and Aleks Szczerbiak, "Why Is There No Christian Democracy in Poland and Why Should We Care?" Party Politics14 (2008): 479-500.
17.
Aušra Aleliūnaite, "Quo Venis et Quo Vadis? Christian Democracy in Central and Eastern Europe," in Christian Democratic Parties in Europe since the End of the Cold War, eds. Steven van Hecke and Emmanuel Gerard (Leuven: Leuven University Press, 2004): 273-294.
18.
van Kersbergen, Social Capitalism, 235-246; Kees van Kersbergen, "Contemporary Christian Democracy and the Demise of the Politics of Mediation," in Continuity and Change in Contemporary Capitalism, eds. Herbert Kitschelt et al. (Cambridge: Cambridge University Press, 1999): 346-370.
19.
Aleliūnaitė, " Quo Venis et Quo Vadis?"
20.
Linda J.Cook, MitchellA. Orenstein, and Marilyn Rueschemeyer, eds., Left Parties and Social Policy in Postcommunist Europe (Boulder, CO: Westview Press, 1999).
21.
Cook, Orenstein, and Rueschemeyer, Left Parties and Social Policy; David Stark and László Bruszt, Postsocialist Pathways. Transforming Politics and Property in East Central Europe (Cambridge: Cambridge University Press, 1998).
22.
Esping-Andersen, The Three Worlds of Welfare Capitalism.
23.
Cook, Orenstein, and Rueschemeyer, Left Parties and Social Policy, 242-243.
24.
Brusis, Central and Eastern Europe on the Way into European Union.
25.
Brusis, "Introduction: Residual or European Welfare Model?"
26.
Ibid., 19.
27.
Dimitri A. Sotiropoulos , Ileana Neamţu, and Maya Stoyanova, "The Trajectory of Postcommunist Welfare State Development: Cases of Bulgaria and Romania ," Social Policy and Administration37 (2003): 656-673.
28.
Christine Lipsmeyer, "Reading Between the Welfare Lines: Politics and Policy Structure in Postcommunist Europe," Europe-Asia Studies 52 (2000): 1191-1211; Christine Lipsmeyer, "Parties and Policies: Evaluating Economic and Partisan Influences on Welfare Policy Spending during the European Post-communist Transition," British Journal of Political Science 32 (2002): 641-661.
29.
Mitchell A. Orenstein and Martine R. Haas, "Globalization and the Development of Welfare States in Postcommunist Europe," Discussion Paper 02 (2002), International Security Program Discussion Paper Series, Belfer Center for Science and International Affairs; Bob Deacon and Michelle Hulse, "The Making of Post-communist Social Policy: The Role of International Agencies," Journal of Social Policies 26 (1997): 43-62.
30.
Janos Matyas Kovacs, "Approaching the EU and Reaching the US? Rival Narratives on Transforming Welfare Regimes in East-Central Europe," West European Politics 25 (2002): 175-204; Hans Jürgen Wagener, "The Welfare State in Transition Economies and Accession to the European Union," West European Politics 25 (2002): 152-174.
31.
David R. Cameron, "The Expansion of the Public Economy ," American Political Science Review72 (1978): 1243-1261.
32.
Paulette Kurzer , Business and Banking. Political Change and Economic Integration in Western Europe (Ithaca/ London: Cornell University Press, 1993).
33.
Dion, " Globalization, Political Institutions and Social Spending Change," 19.
34.
Existing literature on the welfare state in Eastern Europe emphasizes two other categories of factors, namely socialist legacies and trade unions, but we do not include them as they fall beyond the scope of this article. As a side note, it is worth mentioning that the influence of socialist legacies is largely considered to be reflected in some of the principles of welfare systems, and-at least in the first years of transition- in the large state social expenditures. Under the pressure of reforming the welfare states, the influence of socialist legacies tends to fade over time. Trade unions have an ambiguous influence on social expenditure because of their relationships with the governments. On one hand, trade unions have accepted austerity programs. On the other hand, some trade unions have managed to impede the government's implementation of certain restructuring programs. However, it is largely accepted by observers of trade unions in Eastern Europe that they are weak actors. See Stephen Crowley, Hot Coal, Cold Steel: Russian and Ukrainian Workers from the End of the Soviet Union to the Post-Communist Transformations (Ann Arbor: University of Michigan Press, 1997); Stephen Crowley, "Explaining Labor Weakness in Post-communist Europe: Historical Legacies and Comparative Perspective," East European Politics and Societies 18 (2004): 394-429; Stephen Crowley and David Ost, eds., Workers after Workers' States. Labor and Politics in Post-Communist Eastern Europe (Lanham: Rowman & Littlefield Publishers, 2001); David Ost, "Illusory Corporatism in Eastern Europe: Neoliberal Tripartism and Postcommunist Class Identities," Politics Society 28 (2000): 503-530; John E. M. Thirkell, Krastyu Petkov, and Sarah A. Vickerstaff, The Transformation of Labour Relations: Restructuring and Privatization in Eastern Europe and Russia (New York: Oxford University Press, 1998); Paul Kubicek, Organized Labor in Postcommunist States. From Solidarity to Infirmity (Pittsburgh: Pittsburgh University Press, 2004); Bela Greskovits, The Political Economy of Protest and Patience: East European and Latin American Transformations Compared (Budapest: Central European University Press, 1998); Carola Frege, "Understanding Union Effectiveness in Central Eastern Europe: Hungary and Slovenia," European Journal of Industrial Relations 8 (2002): 53-76; Martin Myant, Brian Slocock, and Simon Smith, "Tripartism in the Czech and Slovak Republics," Europe-Asia Studies 52 (2000): 723-739; Terry Cox and Bob Mason, Social and Economic Transformation in East Central Europe. Institutions, Property Relations and Social Interests (Cheltenham, UK: Edward Elgar, 1999); Elena A. Iankova, Eastern European Capitalism in the Making (Cambridge, UK: Cambridge University Press, 2002); Anna Pollert, "Trade Unionism in Transition in Central and Eastern Europe," European Journal of Industrial Relations 5 (1999): 209-234; Sabina Avdagic, "Accounting for Variations in Trade Union Effectiveness: State-Labor Relations in East Central Europe," MPIfG Discussion Papers 06 (2003), Max Planck Institute for the Study of Societies, Cologne; Sabina Avdagic, "Loyalty and Power in Union-Party Alliances Labor Politics in Postcommunism," MPIfG Discussion Paper 07 (2004), Max Planck Institute for the Study of Societies, Cologne.
35.
A potential interaction effect between government composition and institutional veto points has not been analysed in this article because of data restrictions.
36.
See Nita Rudra and Stephan Haggard, "Globalization, Domestic Politics, and Welfare Spending in the Developing World" (paper presented at the annual meeting of the American Political Science Association, San Francisco, CA, 30 August-2 September 2001.)
37.
For a more thorough discussion of the quality of the data for former communist countries, see Oleh Havrylyshyn, Divergent Paths in Post-Communist Transformation. Capitalism for All or Capitalism for the Few? ( Basingstoke, UK: Palgrave Macmillan, 2006).
38.
Huber et al., "Determinants of Social Spending in Latin America and the Caribbean " (paper presented at the Congress of the Latin American Study Association, Las Vegas, NV, 6-10 October 2004.); Dion, "Globalization, Political Institutions and Social Spending Change"; Lipsmeyer, "Reading Between the Welfare Lines" and "Parties and Policies."
It may be that spending at subnational levels varies significantly. However, because of data availability, we are not able to address these variations.
41.
Armingeon and Careja, Comparative Data Set for 28 Post-Communist Countries, 1989-2006.
42.
World Bank DevelopmentIndicators (World Bank: Washington D.C., 2004).
43.
Kittel and Obinger, "Political Parties, Institutions."
44.
For an overview, see Schmidt, "When Parties Matter."
45.
Kittel and Obinger, "Political Parties, Institutions." For contrasting views, see Torben Iversen and David Soskice, "Electoral Institutions and the Politics of Coalitions: Why Some Democracies Redistribute More Than Others," American Political Science Review100 (2006): 165-181.
46.
Armingeon and Careja, Comparative Data Set for 28 Post-Communist Countries, 1989-2006.
47.
Although the age of eligibility for old age pensions was often lower than 65 during the transition period, we employ 65 years as a threshold to keep the countries comparable.
48.
URL: http://laborsta.ilo.org/ (accessed 15 March 2006).
49.
Nathaniel Beck and Jonathan N. Katz, "What to Do (and Not to Do) With Time-series Cross-section Data," American Political Science Review 89 (1995): 634-647; Bernhard Kittel, "Sense and Sensitivity in Pooled Analysis of Political Data," European Journal of Political Research35 ( 1999): 225-253.
50.
Kittel, "Sense and Sensitivity ," 227.
51.
Bernhard Kittel and Hannes Winner, "How Reliable is Pooled Analysis in Political Economy? The Globalisation-Welfare State Nexus Revisited," MPIfG Discussion Paper 03 (2002), Max Planck Institute for the Study of Societies, Cologne, 23.
52.
Thomas R. Cusack and Susanne Fuchs. "Parteien, Institutionen und Staatausgaben," In Politische Ökonomie. Demokratie und wirtschaftliche Leistungsfähigkeit, eds. Herbert Obinger, Uwe Wagschal, and Bernhard Kittel (Opladen: Leske and Budrich, 2003): 321-354; Jürgen Kohl, Staatsausgaben in Westeuropa. Analysen zur langfristigen Entwicklung der öffentlichen Finanzen (Frankfurt/New York: Campus, 1985): 281; Kittel and Obinger, "Political Parties, Institutions," 29.
53.
Kittel and Obinger, "Political Parties, Institutions," 31.
54.
Dion, "Globalization, Political Institutions and Social Spending Change."
55.
Ibid.
56.
Stephan Leibfried and Elmar Rieger, Grundlagen der Globalisierung. Perspektiven des Wohlfahrtsstaates (Frankfurt: Suhrkamp, 2001).
57.
Linda J. Cook and Mitchell A. Orenstein , "The Return of the Left and Its Impact on the Welfare State in Poland, Hungary, and Russia," In Cook, Orenstein, and Rueschemeyer, Left Parties and Social Policy; Marilyn Ruechemeyer and Sharon L. Wolchik, "The Return of Left-Oriented Parties in East Germany and the Czech Republic and Their Social Policies," In Cook, Orenstein, and Rueschemeyer, Left Parties and Social Policy.
58.
Francis Fukuyama, "End of History?" The National Interest (Summer 1989).
59.
Dion, "Globalization, Political Institutions and Social Spending Change."
60.
Leibfried and Elmar Rieger, Grundlagen der Globalisierung, 129.
61.
Dietrich Rueschemeyer, "Left Parties and Social Policies in Eastern Europe after Communism: An Introduction," in Cook, Orenstein and Rueschemeyer, Left Parties and Social Policy; Linda J. Cook and Mitchell A. Orenstein, "The Return of the Left"; Venelin I. Ganev, "The `Triumph of Neoliberalism' Reconsidered: Critical Remarks on Ideas-Centered Analyses of Political and Economic Change in Post-Communism," East European Politics and Societies 19 (2005): 343-378.
