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Enlarging the Varieties of Capitalism: The Emergence of Dependent Market Economies in East Central Europe

  • Andreas Nölke (a1) and Arjan Vliegenthart (a2)

This article enlarges the existing literature on the varieties of capitalism by identifying a third basic variety that does not resemble the liberal market economy or coordinated market economy types. The dependent market economy (DME) type, as it is named by the authors, is characterized by the importance of foreign capital for the socioeconomic setup and is located in postsocialist Central Europe. Since the collapse of state socialism in the late 1980s, the Czech Republic, Hungary, Poland, and the Slovak Republic have introduced a rather successful model of capitalism when compared with other postsocialist states. This article identifies the key elements of the DME model and discusses their interplay. DMEs have comparative advantages in the assembly and production of relatively complex and durable consumer goods. These comparative advantages are based on institutional complementarities between skilled, but cheap, labor; the transfer of technological innovations within transnational enterprises; and the provision of capital via foreign direct investment.

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* We thank seminar and conference participants at the San Diego International Studies Association Convention, the Darmstadt meeting of the German Political Science Association; Goethe University Frankfurt; Max Planck Institute for the Study of Societies, Cologne; and Vrije Universiteit, Amsterdam, for comments. Reviews by Jan Drahokoupil, Bela Greskovits, Henk Overbeek, Bastiaan van Apeldoorn, James Perry, Laura Horn, and Angela Wigger have been most beneficial. We are also very grateful for the detailed commentary of three anonymous reviewers. Helpful research assistance has been provided by Brigitte Holden, Christian Möller, and Max Breuer. The contribution of Andreas Nölke was supported by a research stay at the Max Planck Institute for the Study of Societies. Empirical research has been made possible by a grant by the Dutch funding agency, NWO.

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World Politics
  • ISSN: 0043-8871
  • EISSN: 1086-3338
  • URL: /core/journals/world-politics
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