Twenty years after the dissolution of the Soviet Union, "Capitalist Diversity on Europe's Periphery" provides a timely account of post-socialist countries journey towards capitalism. Not only provides the book a review of transition experiences, unprecedented in its comprehensiveness, it also appears at a time where countries are confronted with an increasingly hostile global economic climate. By taking us through two decades of post-socialist history, the authors-Dorothee Bohle and Béla Greskovits-enhance our understanding of the capitalist diversity in Europe's periphery and thereby also allow us to better grasp the challenges ahead.
The authors declared objective is to explain the divergent pathways and consequent capitalist diversity in Europe's post-socialist periphery. Their study covers eleven East Central European countries, which they choose as case studies due to their relatively successful transitions (p.1-2). As such, this book is of relevance for students of political economy, East European history, and European integration. Its high attention to detail is balanced by a well-developed structure and concise arguments, making it accessible to a broad range of academic readers, from undergraduates to professional scholars, and interested non-academics alike.
Capitalist Diversity in Europe's periphery is not the first and certainly not the last attempt to deconstruct the emergence of capitalism in post-socialist Europe. Earlier writers made use of Hall and Soskice's popular Varieties-of-Capitalism approach; some predicting a convergence to one of the approach's ideal types developed in the seminal work, others claiming the existence of a third type of "dependent market economies". Bohle and Greskovits reject the feasibility of the Varieties-of-Capitalism approach in Eastern Central Europe altogether, and ground their analysis in Polanyi's work on capitalism instead. In developing their analytical framework, the authors exploit the self-destructive nature of modern market societies as emphasized by Polanyi (p. 9-17). As such, they put the "political" which has to convene opposing economic and social forces at the center-stage of their analysis. Throughout the book this framework allows the authors to convincingly explore the fragile nature of capitalism and its emergence, the role of the international as well as the national, and last but not least political agency. In all these respects, the Polanyi-inspired framework appears more fruitful than Varieties-of-Capitalism explanations; the authors substantially raised the bar for future work on post-socialist capitalism.
In explaining the divergent post-socialist development the authors carefully establish similarities and differences between their case studies. What was common in all countries was first and foremost the determination to "leave the East" and "return to Europe"; fast, before reactionist forces could protract reforms. The authors argue that, without a precise understanding what exactly needed to be done, countries eagerly started their transformation to the one economic order which had stood the test of time, capitalism. The authors intelligently develop the importance of past legacies, including late state and nation building, late industrialization in the closed socialist economy, paternalistic welfare states, and a skilled but inefficiently employed workforce. While these legacies acted as constraints to reformers and induced a certain path dependency, Bohle and Greskovits highlight the role of ideational elements. These not only allowed reformers to address the great deal of uncertainty they faced, they also shaped the perception of legacies, with differing consequences in different countries. By the end of the 1990s, the authors conclude three distinct capitalist types emerged in East Central Europe: neoliberalism in the Baltics, embedded neoliberalism in the Visegrad countries, and neocorporatism in Slovakia.
The second post-socialist decade in East Central Europe was marked by the accession to the European Union and a stronger integration into the world economy. The authors argue that the promise of and the eventual accession to the European Union has strengthened reformist forces through intellectual support and through increasing electorates' patience with at times painful economic adjustments. By and large, this meant a further pursuit of neoliberal agendas. As neoliberalism was already the predominant force in the countries which had assumed one of the three types mentioned above, it led to the consolidation of their development paths rather than to a change in direction. The same applies for increased foreign direct investment which pronounced existing economic patterns and encouraged further specialization. In contrast, Bulgaria, Romania and the Slovak Republic which initially lagged reformist strength gained increasing traction with accession to the European Union, and the authors see them follow the strictly neoliberal path of the Baltic countries.
An outstanding achievement is the account Bohle & Greskovits give to political agency. Building on Polanyi's understanding of self-destructiveness in market societies, the authors conceptualize political agency in a way that it has more explanatory power than purely structuralist approaches to socio-economic change that ignore ideational forces completely: "In order to link outcomes with inherited structures in a convincing way, actors' interpretation of legacies and the way these perceptions inform choices, and thus political opportunities and risks, must be factored in. This is especially true in the context of radical uncertainty, of which there has been plenty in East Central Europe." (p.261-2)
Altogether, the authors present a convincing account of the transformation that East Central European countries went through after the dissolution of the Soviet Union. The authors' long lasting experience as scholars of East European politics is evident in the fine tracing of political developments and sharp understanding of underlying economic structures. The quantification of core indicators not only gives their works more credibility but provides the reader with a clearer picture of the social, political and economic conditions in the examined countries. In addition, the authors draw on established political economy concepts to support their line of argumentation. Besides Polanyi's work on capitalism, these include Peter Katzenstein's analysis of Small States in the World Economy as well as Immanuel Wallerstein's World System Theory. Apart from the Varieties-of-Capitalism approach which is addressed extensively, competing theories of Eastern European capitalist diversity have received little attention in Bohle & Greskovits' book. However, there is no doubt that the full-fledged account of capitalist diversity in East Central Europe that the authors provide is a worthy stand-alone piece. This work presents a milestone in the explanation of post-socialist transformation and capitalist diversity; it will serve as a baseline for further study on the region, and-as the authors wittingly note-their analytical framework might not only proof useful in exploring other formerly socialist countries but also some of the weakening economies of Europe's core (p.267-9).