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The Neo-Transitional Paradox: Restrictive Capital Regulations, Authoritarian State and Limited Welfare Type of Capitalism Examined in International Context

Neo-Transitional Economics

ISBN: 978-1-78441-682-9, eISBN: 978-1-78441-681-2

ISSN: 1569-3767

Publication date: 4 March 2015

Abstract

In this paper we show that the neo-transitional economies are less neoliberal than could be expected given their 25-years long transition towards building market environment, supporting entrepreneurship and restoring capitalism in general. According to factor analysis results based on a cross-sectional sample of 134 countries during the period of 2010–2012 we find that the neo-transitional economies are characterised by relatively restrictive trade and capital regulations, average level of labour protection and low activity of state in terms of tax-based redistribution and social cohesion support. We briefly review several theoretical frameworks, such as the World System Theory, Commodity Chain and Global Capital theory, and Varieties of Capitalism framework, and point towards their limitations in explaining these transitional outcomes. We conclude that these frameworks are not capable of providing the explanations mainly because of their limited or no concern for labour and capital, and their interactions with the national institutions. We conclude that the history of industrialisation and path dependence provides a more plausible framework for explaining the neo-transitional outcomes. Furthermore, the consideration of the ‘resource curse’ and authoritarian regimes in many CIS countries can explain their neglect for tax-based redistribution and the high degree of government interventions in trade and capital regulations.

Keywords

Acknowledgements

Acknowledgements

This work was supported by the Centre of Excellence ‘CESTA’ of the Slovak Academy of Sciences (Contract No. III/2/2011) and by the project VEGA ‘Štrukturálna adaptácia malej otvorenej ekonomiky’ (2/0058/10).

Citation

Lubyova, M. and Babos, P. (2015), "The Neo-Transitional Paradox: Restrictive Capital Regulations, Authoritarian State and Limited Welfare Type of Capitalism Examined in International Context", Neo-Transitional Economics (International Finance Review, Vol. 16), Emerald Group Publishing Limited, Bingley, pp. 121-147. https://doi.org/10.1108/S1569-376720150000016006

Publisher

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Emerald Group Publishing Limited

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