Contrasting Responses to the International Economic Crisis of 2008–10 in the 11 CIS Countries and in the 10 Post-Communist EU Member Countries

Abstract

Far from being uniform and amenable to broad generalizations, the consequences of the international economic crisis of 2008–10 for the post-communist states have been strikingly diverse, and the policy responses of these countries to those crises have been correspondingly varied. The 11 Commonwealth of Independent States (CIS) countries, and the 10 post-communist states admitted into the EU in 2004 or 2007, were affected in different ways by the economic crisis and offered different responses to it. These widely differing impacts and responses can be satisfactorily explained and conceptualized in terms of relatively concrete and tangible differences in the structures of power, resources, opportunities, incentives and constraints that have emerged in these two broad groupings of countries. The economic systems that have emerged in most of the CIS countries have diverged substantially from those of the post-communist states that joined the EU, with significant cautionary implications for future attempts to integrate or associate CIS countries with the EU.

ACKNOWLEDGEMENTS

Many thanks to Professors Ronald Hill and Stephen White for their very helpful corrections and improvements to my text, and to my close friend and colleague Professor Ian Jeffries for generously sharing his information and ideas on post-communist states with me over the past two decades.

Notes

Athanasios Vamvadakis, ‘Convergence in Emerging Europe: Sustainability and Vulnerabilities’, IMF Working Paper WP/08/181, Washington, DC: IMF (1 July 2008), p.3, available at <http://www.imf.org/external/pubs/ft/wp/2008/wp08181.pdf>, accessed 15 March 2010.

Athanasios Vamvadakis, ‘Emerging Europe Closes Income Gap with Advanced Europe’, IMF Survey Magazine, 1 Aug. 2008, p.1, available at <http://www.imf.org/external/pubs/ft/survey/so/2008/CAR080108C.htm>, accessed 13 March 2011.

Robert Bideleux and Ian Jeffries, A History of Eastern Europe, 2nd edn. (London: Routledge, 2007), pp.561–2; Anders Åslund, How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia, and Central Asia (Cambridge: Cambridge University Press, 2007), pp.58–61, 76–8, 84–6, 111–12; and E. Fuat Keyman and Ziya Öniş, Turkish Politics in a Changing World: Global Dynamics and Domestic Transformations (Istanbul: Istanbul Bilgi University Press, 2007), pp.18–19, 65.

Vamvadakis, ‘Convergence in Emerging Europe’, pp.1–4.

Stefania Fabrizio, Deniz Igan and Ashoka Mody, ‘The Dynamics of Product Quality and International Competitiveness’, IMF Working Paper WP/07/97 (Washington, DC: IMF European Department, 2007).

International Monetary Fund (IMF), Regional Economic Outlook: Europe: May 2009 (Washington, DC: IMF, 2009), pp.45–7.

Ibid., pp.47.

Ibid., pp.51, 53.

Ibid., pp.49, 52, 55.

IMF, Regional Economic Outlook: Europe: October 2008 (Washington, DC: IMF, 2008), pp.11–12.

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Grigory Yavlinsky, ‘Russia's Phony Capitalism’, Foreign Affairs, Vol.73, No.3 (1998), pp.67–79 (p.69).

This conceptual framework is more fully expounded and referenced in Robert Bideleux, ‘Rethinking the Eastward Extension of the EU: Civil Order and the Nature of Europe's New East–West Divide’, Perspectives on European Politics and Society, Vol.10, No.1 (2009), pp.118–36. See also Clifford G. Gaddy and Barry W. Ickes, ‘Resource Rents and the Russian Economy’, Eurasian Geography and Economics, Vol.46, No.8 (2005), pp.559–83.

Global Witness report, ‘It's a Gas: Funny Business in the Turkmen–Ukraine Gas Trade’ (April 2006), pp.4–8, 12–45, 49–62, available at <http://www.globalwitness.org/sites/default/files/pdfs/its_a_gas_april_2006_lowres.pdf>, accessed 13 April 2011.

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Alena Ledeneva, How Russia Really Works (Ithaca, NY: Cornell University Press, 2006); Janine R. Wedel, ‘Dirty Togetherness: Institutional Nomads, Networks, and the State–Private Interface in Central and Eastern Europe and the Former Soviet Union’, Polish Sociological Review, Vol.2, No.142 (2003), pp.139–59; Karen Dawisha, ‘Communism as a Lived System of Ideas in Contemporary Russia’, East European Politics and Societies, Vol.19, No.3 (2005), pp.478–82.

Dalia Marin and Monika Schnitzer, ‘Disorganization and Financial Collapse’, European Economic Review, Vol.49, No.2 (2005), pp.387–408, offering a wholly non-culturalist and non-ethnocentric ‘explanation for why the former Soviet Union differs from the early transition economies in Central Europe’ (p.405).

Tapio Saavalainen and Joy ten Berge, ‘Quasi-Fiscal Deficits and Energy Conditionality in Selected CIS Countries’, IMF Working Paper WP/06/43, IMF (Feb. 2006), p.6.

Ibid.

Gael Raballand and Ferhat Esen, ‘Economics and Politics of Cross-Border Oil Pipelines: The Case of the Caspian Basin’, Asia–Europe Journal (online), Vol.5, No.1 (2007), pp.133–46, available at <http://www.springerlink.com/content/c82t5883v4526374/fulltext.pdf>, accessed 21 March 2011.

François Perroux, ‘Economic Space: Theory and Applications’, Quarterly Journal of Economics, Vol.64, No.1 (1950), pp.8–104 (p.95); see also François Perroux, ‘L'Effet de domination et les relations économiques’, Économie appliquée, Vol.XL, No.2 (1949), pp.271–90, or his ‘The Domination Effect and Modern Economic Theory’, Social Research, Vol.17, No.2 (1950), pp.185–206; L'Économie du XXe siècle (Paris: Presses Universitaires, 1961); and his Pouvoir et économie (Paris: Bordas, 1973).

Janos Kornai, The Socialist System: The Political Economy of Communism (Oxford: Clarendon Press, 1992), pp.131–86, 466.

Steven Rosefielde and Stefan Hedlund, Russia Since 1980 (Cambridge: Cambridge University Press, 2009), Chaps 6–14.

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IMF, World Economic Outlook April 2009 (Washington, DC: IMF, 2009), pp. 189, 217–8.

Robert Bideleux, Communism and Development (London: Methuen, 1987), p.270.

Ledeneva, How Russia Really Works, pp.160–61.

Vladimir Kontorovich, ‘The Importance of Geography’, in Michael Ellman (ed.), Russia's Oil and Natural Gas: Bonanza or Curse? (London: Anthem Press, 2006), pp.173–5, 183.

IMF, World Economic Outlook: April 2011 (Washington, DC: IMF, 2011), p.171.

François Perroux, ‘Note sur la notion de pôle de croissance’, Économie appliquée, Vol.VII (1955), pp.151–71; François Perroux, ‘The Pole of Development's New Place in a General Theory of Economic Activity’, in Benjamin Higgins and Donald Savoie (eds.), Regional Economic Development: Essays in Honour of François Perroux (Boston, MA: UnwinHyman, 1988), pp.48–141.

Gérard Destanne de Bernis, ‘Les Industries industrialisantes et l'intégration économique régionale’, Archives de I.S.E.A, Vol.XXI, No.1 (1968), pp.41–68; Gérard Destanne de Bernis, ‘Les Industries industrialisantes et les options algériennes’, Revue Tiers Monde, Vol.12, No.47 (1971), pp.545–63.

Global Witness report, ‘It's a Gas’, passim.

The Economist, ‘The Ukrainian Government: Viktor Ludorum’, 16 Sep. 2010, available at <http://www.economist.com/node/17046645>, accessed 20 Sept. 2010.

Robert Bideleux, ‘Civil Association: The European Union as a Supranational Liberal Legal Order’, in M. Evans (ed.), The Edinburgh Companion to Contemporary Liberalism (Edinburgh: Edinburgh University Press, 2001), pp.225–40.

This conception is explained and evaluated in Bastiaan van Apeldoorn, Jan Drahokoupil and Laura Horn (eds.), Contradictions and Limits of Neoliberal European Governance (Basingstoke: Palgrave Macmillan, 2009).

Robert Bideleux, ‘“Making Democracy Work” in the Eastern Half of Europe: Explaining and Conceptualizing Divergent Trajectories of Post-Communist Democratization’, Perspectives on European Politics and Society, Vol.8, No.2 (2007), pp.109–30; Bideleux, ‘Civil Association’, pp.225–40.

Jacques Rupnik, ‘Is East Central Europe Backsliding?’, Journal of Democracy, Vol.18, No.4 (2007), pp.17–63. Indeed, with regard to Croatia's current accession process, ‘A group of EU states, including France, the Netherlands and the UK are keen not to repeat past mistakes, with Romanian and Bulgarian reform efforts perceived as grinding to a halt after the two countries joined the EU in 2007’: Andrew Willis, ‘EU May Impose Monitoring System on Candidate Croatia’, EUobserver, 24 May 2011, available at <http://euobserver.com/9/32381/?rk=1>, accessed 24 May 2011.

Tom Gallagher, Romania and the European Union: How the Weak Vanquished the Strong (Manchester: Manchester University Press, 2009).

Vesselin Zhelev, ‘Commission report encourages Bulgaria, blasts Romania’, waz.euobserver.com, 20 July 2010, available at <http://euobserver.com/?aid=30508>, accessed 10 Aug. 2010.

Robert Bideleux, ‘Reconstituting Political Order in Europe, West and East’, Perspectives on European Politics and Society, Vol.10, No.1 (2009), pp.3–16, and Robert Bideleux, ‘Rethinking the Eastward Extension of the EU Civil Order and the Nature of Europe's New East–West Divide’, ibid., pp.118–36.

Steven Levitsky and Lucan Way, Competitive Authoritarianism: Hybrid Regimes After the Cold War (Cambridge: Cambridge University Press, 2010); Milada Anna Vachudova, ‘Democratization in Post-Communist Europe: Illiberal Regimes and the Leverage of the European Union’, in Valerie Bunce, Michael McFaul and Kathryn Stoner-Weiss (eds.), Democracy and Authoritarianism in the Postcommunist World (Cambridge: Cambridge University Press, 2010), pp.82–104.

Robert Bideleux and Ian Jeffries, The Balkans: A Post-Communist History (London: Routledge, 2007); for updates, see Adam Fagan, Europe's Balkan Dilemma (London: I.B. Tauris, 2010).

See Alina Mungiu-Pippidi's powerful, blistering exposé of the severe practical limitations and inadequacies of the EU's transformative impact: ‘When Europeanization Meets Transformation: Lessons from the Unfinished Eastern European Revolutions’, in Bunce, McFaul and Stoner-Weiss (eds.), Democracy and Authoritarianism in the Postcommunist World, pp.59–81.

Robert Bideleux, ‘Europeanization and the Limits to Democratization in East–Central Europe’, in Geoffrey Pridham and Attila Ágh (eds.), Prospects for Democratic Consolidation in East–Central Europe (Manchester: Manchester University Press, 2001), pp.25–53, and Robert Bideleux, ‘Post-Communist Democratization: Democratic Politics as the Art of the Impossible?’, Review of Politics, Vol.71, No.2 (2009), pp.303–17.

Andrew Ward, ‘Baltic Trio Shows How Fiscal Medicine Tastes’, Financial Times, 25 June 2010, p.6.

Céline Allard, Nada Choueiri, Susan Schadler and Rachel van Elkan, ‘Macroeconomic Effects of EU Transfers in New Member States’, IMF Working Paper WP/08/23, IMF (Sep. 2008), p.37.

IMF, World Economic Outlook: April 2011 (Washington, DC: IMF, 2011), pp.2, 59.

For reasons that are explained in Robert Bideleux, ‘European Integration: The Rescue of the Nation-State?’, in Dan Stone (ed.), The Oxford Handbook of Postwar European History (Oxford: Oxford University Press, forthcoming).

Stephen White, ‘Foreword’, in Donnacha Ó Beachaín and Abel Polese (eds.), The Colour Revolutions in the Former Soviet Republics (London: Routledge, 2010), p.xi.

Åslund, How Capitalism Was Built, pp.58–61, 76–8, 84–6, 112–13.

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Robert Bideleux

Robert Bideleux is Reader in Political and Cultural Studies at Swansea University. He is currently writing books on genocide, Orientalism and global political economy. His History of Eastern Europe (2nd edition, 2007, with Ian Jeffries) has recently been published in Chinese translation in Shanghai.