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Large-scale transition of economic systems: Do CEECs converge towards Western prototypes?

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  • Ahlborn, Markus
  • Ahrens, Joachim
  • Schweickert, Rainer

Abstract

In order to identify convergence patterns among the group of Central and Eastern European Countries (CEECs) we analyze clusters of traditional OECD countries, i.e. EU-15 plus Norway and Switzerland, Anglo-Saxon non-EU countries plus Japan, and CEECs based on macro data on government regulation and spending instead of micro data on firm relations and market characteristics as is usually applied in Varieties-of-Capitalism (VoC) analysis. This framework is supposed to incorporate some of the critique that has been expressed towards the traditional VoC-approach, especially its ignorance of government spending and performance. We acknowledge for the transition aspect by looking at cluster history and principal component analysis for periods of transition. Our analysis reveals that there is consolidation rather than convergence with CEECs being divided in clusters leaning towards CME and LME prototypes respectively. Overall, there are worlds of redistribution within which clusters differ with respect to their mix of - negatively correlated - regulation and innovation. Interestingly, CEECs do not mix up with Mediterranean MMEs, which indeed provide a kind of worst case setting, while Scandinavian CMEs as well as traditional LMEs provide a kind of role model within their respective worlds of redistribution.

Suggested Citation

  • Ahlborn, Markus & Ahrens, Joachim & Schweickert, Rainer, 2014. "Large-scale transition of economic systems: Do CEECs converge towards Western prototypes?," Kiel Working Papers 1976, Kiel Institute for the World Economy (IfW).
    • Handle: RePEc:zbw:ifwkwp:1976
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    References listed on IDEAS

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    1. Federico Foders & Daniel Piazolo & Rainer Schweickert, 2002. "Ready to Join the EU?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 3(4), pages 43-72, October.
    2. Pryor, Frederic L., 2005. "Market economic systems," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 25-46, March.
    3. Acemoglu, Daron & Robinson, James A & Verdier, Thierry, 2012. "Can't We All Be More Like Scandinavians? Asymmetric Growth and Institutions in an Interdependent World," CEPR Discussion Papers 9113, C.E.P.R. Discussion Papers.
    4. Frederic L Pryor, 2006. "Economic Systems of Developing Nations," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(1), pages 77-99, March.
    5. Beata Farkas, 2011. "The Central and Eastern European model of capitalism," Post-Communist Economies, Taylor & Francis Journals, vol. 23(1), pages 15-34.
    6. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147.
    7. Amable, Bruno & Azizi, Karim, 2011. "Varieties of capitalism and varieties of macroeconomic policy. Are some economies more procyclical than others?," MPIfG Discussion Paper 11/6, Max Planck Institute for the Study of Societies.
    8. Ahlquist, John S. & Breunig, Christian, 2009. "Country clustering in comparative political economy," MPIfG Discussion Paper 09/5, Max Planck Institute for the Study of Societies.
    9. McMENAMIN, IAIN, 2004. "Varieties of Capitalist Democracy: What Difference Does East-Central Europe Make?," Journal of Public Policy, Cambridge University Press, vol. 24(03), pages 259-274, December.
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    Cited by:

    1. Wrobel, Ralph, 2015. "From independence to the Euro introduction: varieties of capitalism in the Baltic States," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 9-38.
    2. Markus Ahlborn & Rainer Schweickert, 2018. "Public debt and economic growth – economic systems matter," International Economics and Economic Policy, Springer, vol. 15(2), pages 373-403, April.
    3. Ahlborn, Markus & Schweickert, Rainer, 2017. "Economic systems in developing countries: A macro cluster approach," PFH Forschungspapiere/Research Papers 2017/01, PFH Private University of Applied Sciences, Göttingen.
    4. Esther Ademmer & Joscha Beckmann & Rainer Schweickert, 2014. "Large-scale Transformations of Socio-economic Institutions," WWWforEurope Working Papers series 75, WWWforEurope.

    More about this item

    Keywords

    Varieties of Capitalism; Worlds of Welfare States; Government Spending; Regulation; Cluster Analysis; Transition; Economic Systems; CEECs;

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • P10 - Economic Systems - - Capitalist Systems - - - General
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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