Stuck in second gear? EU integration and the evolution of Poland’s automotive industry

Abstract

In contrast to dependent market economy (DME) literature, which argues that Central and Eastern European (CEE) economies serve primarily as assembly platforms for multinational corporations (MNCs) and try to meet their demands, this paper argues that CEE states have done much more than merely accommodating the interests of foreign investors. An analysis of the automotive sector in Poland reveals that the Polish state engaged actively in industrial policy to shape the profile of automotive production and to improve the country’s position in the automotive value chain. Instead of waiting for MNCs to establish backward linkages, it nurtured the rise of a supply industry with forward linkages in the automotive value chain, thus decreasing Poland’s dependence on lead MNCs. Moreover, this paper finds that while EU integration limited policy space for development, it also offered new developmental opportunities, which Polish state actors used to improve the international competitiveness of the sector.

Keywords:

• Automotive industry
• deep integration
• state capacity
• global value chains
• Poland
• politics of development

Acknowledgments

I thank Laszlo Bruszt and Julia Langbein as well as four anonymous reviewers for very helpful comments on earlier drafts of this article. The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Since the adoption of the Law on State Enterprises in 1981, Polish SOEs enjoyed a relatively high degree of autonomy. They operated on the ‘Three S’ principle: self-sufficiency, self-governance and self-financing (see: Federowicz & Levitas, 1995).

2 PHARE stands for Poland and Hungary: Assistance for Restructuring their Economies, an EU Commission assistance instrument.

3 Gazeta Wyborcza, Ople czy Fiaty latem?, March 3, 1991.

4 Data provided to the author by NCBR. Most of the amount came from state budget, but one tenth from the EU programs POIG and POKL.

5 Transnational Network of Leading Automotive Regions in CEE 2010–2013, Total budget: EUR 1.859.804 financed by ERDF (European Union Regional Development Fund).

6 Telephone Interview with Luke Palmen, cluster entrepreneur, Silesia Automotive and Advanced Manufacturing, December 2016.

Additional information

Funding

This research was supported in part by the European Union’s Seventh Framework Programme for research, technological development and demonstration (project “Maximizing the integration capacity of the European Union. Lessons and prospects for enlargement and beyond [MAXCAP]”) under grant agreement no. 320115.

Notes on contributors

Olga Markiewicz

Olga Markiewicz is a freelance researcher who works with two Poland-based think thanks: the ICRA Foundation and the Institute of Public Affairs. She holds a PhD from the European University Institute. Her research interests revolve around the political economy of Central Eastern Europe and the impact of Europeanisation.