Social Science Research Council

State Capacity and the Leading Sector of the Economy in Post-Socialist Eastern Europe

By the second half of the 1990s, state capacity got increasing attention as a major factor of success or failure of the democratic capitalist project. Sharing the view of the crucial importance of state capacity for a transformation success, this project proposes sectoral analysis to account for the varied extent of "stateness" in the ex-socialist countries. This approach has proved its analytic merits in the comparative political economy of policy reform and structural change in developing countries, yet has been virtually absent in the academic and policy discussion of the post-socialist transformation. Thus its adaptation and application to the diverse post-socialist conditions promise both a pioneering contribution to the study of Eastern Europe's paths, and a significant feedback for, and chances of refinement of, the original theories.

Thus the intellectual agenda opening up for scholarly work includes:

1) Identifying and characterizing the leading sectors with their worldwide and domestic market structures, main actors, patterns of investment allocation and employment.

2) Exploring the links between these sectors and state capacity both by stylized empirics (such as indexes of quality of governance, state capture, rule of law etc. calculated in the comparative studies of international organizations and rating institutions), and by in-depth cross-country comparative case studies. This analysis will shed light on the precise relationship between the leading sector and state capacity, and the mechanisms connecting one to the other.

3) The project does not necessarily privilege a single leading sector: in the case of multi-sector economies state capacity may be shaped by the interaction of several sectors.