Csaba Moldicz: “A New Political Economy of Central Europe”

20.10.2014 | By Kristina Tetianec

This study titled “A New Political Economy of Central Europe” enlightens the most important reasons why Central European countries are still on an integration road, even though their economic and political integration journey has embarked already twenty five years ago.

Csaba Moldicz states that competition, which was created by integration and variegation of European countries, had led to immense accomplishments. Such internal competition became one of the reasons why different countries began development of new technologies, ideas and solutions. However, Central European countries always remained retrograde.

From the historical approach, the success of the West was caused by pluralistic political and inclusive economic institutions. And despite deep transformation from 1990 many of the Central European countries are not mature democracies, where market is unable to work properly. What is more, some countries like Hungary, Romania and Slovak Republic began to turn away from Western European model. The study, based on Freedom House’s report, shows that free market economy model is more profitable that non- or partly free ones. Achemoglu and Robinson have identified a strong connection between the country’s economic and political institutions. In the Eastern Europe political and exclusive economic institutions make a self-reinforcing ferocious circle, while in the West pluralistic political institutions and inclusive economic institutions enhance each other.

To have a better understanding about Central European countries backwardness the author gives more examples of factors that need to be taken into consideration. First of all, the need for regional economic integration and globalization would definitely push European countries to closer integration. Also the EU needs to accept the existence of different political and economical regimes in its member states. Not surprisingly, crisis which came in 2008 had vanished all hopes of fast integration into the West. What is more, there are other concepts which explain Europe’s diversity, but they are often referred as temporal ones. “Europe of concentric circles” or “core Europe” emphasises a creation of a new union with only few member states. “Europe a la carte” is a method which allows member states to select policies and involve themselves only in them.

In the near future EU should connect two ideas: the merit of diversity and the interconnectedness of political and economic institutions. Versatile study should be made to understand why Central European countries sometimes are contrary to liberal values. Also it is beneficial to overview different political and economical regimes in Central Europe. And the reminiscences of the past should compel us that history goes in cycles, so contribution should be made to integrate CEE and West countries.

Read more: https://www.dropbox.com/s/nk7iqd1b1afjzpz/Political%20Economy.pdf?dl=0