Spruk, Rok (2012): After 20 years of status quo: the failure of gradualism in Slovenia’s post-socialist transition. Forthcoming in: CRCE Briefing Paper (19. January 2012)
Download (155kB) | Preview
In 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.
|Item Type:||MPRA Paper|
|Original Title:||After 20 years of status quo: the failure of gradualism in Slovenia’s post-socialist transition|
|Keywords:||post-socialist transition, macroeconomic stabilization, economic growth, political economy, Slovenia|
|Subjects:||E - Macroeconomics and Monetary Economics > E0 - General > E02 - Institutions and the Macroeconomy
N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N13 - Europe: Pre-1913
P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P27 - Performance and Prospects
P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy
N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N14 - Europe: 1913-
|Depositing User:||Rok Spruk|
|Date Deposited:||29. Jan 2012 00:18|
|Last Modified:||19. Feb 2013 02:21|
Acemoglu, D. (1995). “Reward Structures and the Allocation of Talent.” European Economic Review, 39: 17-33.
Aghion, P., Algan, Y., Cahuc, P. & Shleifer, A. (2008). “Regulation and Distrust.” Quarterly Journal of Economics, 125(3): 1015-1049
Alesina, A. & Angeletos, G.M. (2005). “Corruption, Inequality and Fairness.” Journal of Monetary Economics, 52(7): 1227-1244.
Alesina, A. & Rodrik, D. (1994). “Distributive Politics and Economic Growth.” Quarterly Journal of Economics, 109(2): 465-490. Apostolides, A. (2008). “How Similar to South-Eastern Europe were the Islands of Cyprus and Malta in terms of Agricultural Output and Credit? Evidence during the Interwar Period?” MPRA Paper No. 9968.
Broadberry, S. & Klein, A. (2008). “Aggregate and Per Capita GDP in Europe, 1870-2000: Continental, Regional and National Data with Changing Boundaries.” University of Warwick.
Easterly, W. & Bruno, M. (1995). “Inflation Crises and Long-Run Growth.” World Bank Policy Research Working Paper No. 1517.
Economic Research Service (2011). International Macroeconomic Data Set. U.S. Department of Agriculture, Washington D.C.
European Bank for Reconstruction and Development. Transition Report 2010: Recovery and Reform. London, UK (November: 2010).
European Commission. 2006. “The Impact of Ageing on Public Expenditure: Projections for EU25 Member States on Pensions, Health Care, Long-Term Care, Education and Unemployment Transfers (2004-2050).” European Economy, Special Report No.1. Brussels: Directorate General for Economic and Financial Affairs.
Hellman, J.S, Jones, G. & Kaufmann, D. (2000). “Seize the Day, Seize the State: State Capture, Corruption and Influence in Transition.” World Bank Policy Research Working Paper No. 2444.
Good, D. (1994). “Economic Lag of Central and Eastern Europe: Income Estimates for the Habsburg Successor States, 1870-1910.” Journal of Economic History, 54(4): 869-891.
International Monetary Fund. World Economic Outlook. Washington D.C. (April: 2011).
La Porta, R., Lopez-De-Silanes, F. & Shleifer, A. (2008). “Economic Consequences of Legal Origins.” Journal of Economic Literature, 46(2): 285-332.
Mattina, T. & Gunnarsson, V. (2007). “Budget Rigidity and Expenditure Efficiency in Slovenia.” IMF Working Paper No. 07/131.
Mink, R. (2007) “General Government Pension Obligations in Europe.” IFC Bulletin, 28(1): 199-209.
Mrkaic, M. (2002) “The Growth of Total Factor Productivity in Slovenia.” Journal of Post-Communist Economies, 14(4): 445-454.
Mrkaic, M. & Pezdir, R. (2007) “Transition and Political Markets: Post-War German versus Post-Socialist Slovenian Reconstruction.” Economic Affairs, 27(4): 58-64.
Murphy, K.M, Shleifer, A., Vishny, R.W. (1993). “Why is Rent-Seeking so Costly for Growth?” American Economic Review, 83(2): 409-414.
Pohl, G., Anderson, R.E., Claessens, S. & Djankov, S. (1997) “Privatization and Restructuring in Central and Eastern Europe.” World Bank Technical Working Paper No. 368.
Rodrik, D. (1998) “Globalization, Social Conflict and Economic Growth.” World Economy 21(2): 145-158. Sachs, J. (1995). “Reforms in Eastern Europe and Former Soviet Union in the Light of East Asian Experiences.” NBER Working Paper No. 5404.
Sachs, J. D. & Pleskovic, B. (1994). “Political Independence and Economic Reform in Slovenia.” In Transition in Eastern Europe - Volume I: Country Studies, ed. O. J. Blanchard, K. Frooth and J. D. Sachs. Chicago: NBER and University of Chicago Press, 191-230.
Sapir, A. (1980). “Economic Growth and Factor Substitution: What Happened to the Yugoslav Miracle?” The Economic Journal, 90(358): 294-313.
Sirc, L. (1961). “Two Decades of Economic Planning in Yugoslavia.” New Individualist Review 5(1), Winter 1968.
Sirc, L. (1979). The Yugoslav Economy Under Self-Management. New York: St.Martin’s Press.
Sirc, L. (2010). Brezpotja socializma. Ljubljana: Slovenska Matica.
Summers, R. and Heston, A. (1991). “The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988.” Quarterly Journal of Economics, 106(2): 327-368.
Woodward, S. L. (1995). Socialist Unemployment: The Political Economy of Yugoslavia, 1945-1990. New Jersey: Princeton University Press.