CIAO DATE: 06/02

Globalization and the Development of Welfare States in Post-Communist Europe

Introduction

How has globalization influenced welfare state development in postcommunist Europe? We focus on the leading East-Central European accession states, Poland, the Czech Republic, and Hungary, and show that these states have experienced radically different welfare state developments since 1989 from their neighbors in the former Soviet Union. The first part of the paper proposes that these divergent paths can be explained by a "Europe effect". We argue that the effects of globalization have differed greatly, depending on a country's position in the international economy and geopolitical relations. We demonstrate that countries closer to the European Union have used welfare state programs to compensate citizens for the traumas of system transition and economic openness, while the welfare systems in the former Soviet states have collapsed to a far greater extent, in terms of spending and effectivness.

We then explore the roots of differentiation within the East-Central European welfare states themselves. Despite participating in a common process of European integration, East-Central European welfare states have taken different routes to Europe. We argue that these differences can best be explained with reference to the domestic politics of transition and a "global politics of attention" in social policy advice. The transition period offered extraordinary opportunities for small groups of decision makers to initiate policy change (Balcerowicz 1995), and they did so in ways that were sometimes idiosyncratic and sometimes similar, reflecting domestic and international welfare state thinking and priorities.

This paper seeks to contribute to the debate on globalization and welfare states in several ways. First, contrary to those who argue that globalization necessarily forces states to cut commitments to welfare, we find that East-Central European states maintained strong social commitments during a period of rapid economic liberalization and globalization after 1989. Second, we argue that the effects of globalization on welfare states are mediated by politics, in three ways: 1. by a country's geopolitical position, in this case proximity to a regional trading bloc with strong welfare state norms and commitments; 2. by the domestic politics of decision-making, in this case taking place in an extraordinary period of systemic transition; and 3. by a global politics of attention, in this case the role of powerful international actors in influencing the specific paths that countries take on the way to European integration.

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