Social Science Research Council

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

Funded by the Social Science Research Council, and jointly organized by SSRC and the Central European University (CEU) the first planning meeting for the research project "State Capacity and the Leading Sector of Economy in Post-Socialist Eastern Europe" took place on 4-5 February 2002 in Budapest. Participants included: Marina Batalina (Open Society Institute, Russia), Dorothee Bohle (CEU), László Bruszt (CEU), Valerie Bunce (Cornell University), Alexei Elfimov (SSRC), Béla Greskovits (CEU), Alisher Ilkhamov (Open Society Institute, Uzbekistan), Huricihan Islamoglu (CEU, Bogazici University, Turkey), Terry Karl (Stanford University, European University, Florence), Michael D. Kennedy (SSRC, University of Michigan), Lawrence King (Yale University), Elissa Klein (SSRC), Zsuzsanna Pató (CEU), Richard Rose (University of Strathclyde, UK), Andrew Schrank (Yale University), Michael Shafer (Rutgers University), Seteney Shami (SSRC), Leslie Sklair (London School of Economics, UK), Iván Szelényi (Yale University), Éva Voszka (Financial Research Institute, Hungary), Viola Zentai (Center for Policy Studies, CEU), Vitali Silitski (CEU/EHU, Minsk, Belarus). The 2-day discussion proceeded along two lines. First, the conceptual background and the main hypotheses of the research have been exposed to comments and debate. Second, the institutional set-up of the research was crafted.

The starting point of the period covered by the project is the turn of 1980s/1990s. Recognizing the diverse structural, institutional and cultural legacies of state socialism, the analysis focuses on how - together with other factors - the initial sectoral composition of economy constrained post-socialist states' capacity. Born out of the varied legacy and significantly shaped by marketization and transnational integration, by the mid-late 1990s, diverse, new sectoral patterns evolved in the post-socialist countries. To analyze structural constraints on state capacity in second half of the 1990s, the research distinguishes between "heavy" and "light" sectors (characterized by distinct degrees of capital intensity, economies of scale, and production flexibility,) and between "national" and "transnational" types (depending on the origin of control over the sector's firms). The resulting four ideal types - heavy national, light national, heavy transnational, and light transnational leading sectors - combine the sectoral attributes with the varied origins of control. Each of the above types is assumed to exhibit distinct dominant business actors, forms of control, business and labor organization, patterns of workforce quality and collective action, of state actors, developmental institutions, and ways and mechanisms of state-society interaction in the course of development.

As to the four types' impact on state capacity, a major hypothesis of the research is that a light national sectoral base (such as peasant cash crop production, or national textile industry) enhance, while heavy national leading sectors (such as cotton growing plantations or mining of petrol or metals) compromise states' development prospects. However, a second, related hypothesis is that transnationalization reverses the above pattern: heavy transnational leading sectors (such as car manufacturing) open up brighter prospects and better chances for developmentalist state involvement than light transnational leading sectors (such as clothing or footwear). Since the post-socialist national economies exhibit varied combinations of the four types (and their subtypes), the project has a good chance to capture the most interesting sector-state relations and subregional perpectives.