After 20 Years of Status Quo: The Failure of Gradualism in Slovenia’s Post-Socialist Transition
AbstractIn the past 20 years, the Slovenia has been praised as the richest former socialist country, having accomplished the advancement from borrower into donor status at the World Bank and having entered the European Monetary Union as the first country from former socialist block. In the due course of transition to market, Slovenia adopted the gradualist approach to economic reform, emphasizing gradual privatization, excessive regulation of the labor market and financial sector as well as the slow stabilization of public finances. In this paper, we review macroeconomic performance of Slovenia in past two decades in a comparative perspective. The paper outlines the growth trajectory of Slovenia from the onset of Habsburg Empire to the present. We showed that until 1939, Slovenia has almost fully converged to the income per capita frontier of Austria and Italy while the income per capita diverged substantially in the period 1945-1990 from Western European frontier. We review the contours of labor market protectionism, state dominance in banking and financial sector and emergence of the corporate oligarchy as the main symptoms of stalled economic performance given a substantial differential in income per capita between Slovenia and EU15. Moreover, we demonstrate how former communist elites transformed into powerful networks of interest groups which preserved status quo from socialist period through systemic blockade of key economic reforms to stabilize public finances in the light of age-related pressures and to boost productivity growth and structural change.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 36304.
Date of creation: 19 Jan 2012
Date of revision:
post-socialist transition; macroeconomic stabilization; economic growth; political economy; Slovenia;
Find related papers by JEL classification:
- E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
- N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
- P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-20 (All new papers)
- NEP-MAC-2012-02-20 (Macroeconomics)
- NEP-TRA-2012-02-20 (Transition Economics)
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