From Receding to Reseeding: Industrial Policy,Governance Strategies and Neoliberal Resilience in Post-crisis Britain

ABSTRACT

Industrial policy has been on the agenda of British policy elites since the 2008 financial crisis, particularly since Theresa May became Prime Minister in 2016. This has been seen as a challenge to pre-crisis norms of economic governance associated with neoliberalism. This article explores key aspects of industrial policy development in post-crisis Britain – new forms of vertical support for industry, local government reform, and the public financing of private sector R&D – in order to sketch a new understanding of political and ideological change. It focuses on the institutional mechanisms through which industrial strategy will ostensibly be implemented, including subnational and private spheres of governance. The article argues that recent industrial policy developments do not represent the receding of neoliberalism, but rather have provided opportunities for the reseeding of neoliberal norms in British economic statecraft. The strategy has reinforced forms of state machinery through which pre-crisis elite practice can be maintained and legitimated. By demonstrating that the apparent revival of state intervention in the wake of capitalist crises must not be assumed automatically to challenge pre-crisis economic orders, and highlighting the crucial role of exigent political circumstances, the article makes an important contribution to the literature on neoliberal resilience.     

From goulash communism to goulash populism: the unwanted legacy of Hungarian reform socialism

The systemic change of 1989/1990 is usually identified as the critical juncture in the modern economic history of post-communist economies. While the change itself was indeed a remarkable moment in time, a branching point from which a multitude of new paths originated in most of the countries in Central and Eastern Europe, this was only partially true in the case of Hungary. If a critical juncture is sought for Hungary, it is more likely to be 1968, the year the New Economic Mechanism was launched. By applying the conceptual framework of historical institutionalism, the article argues that what made Hungary unique during the communist era and what rendered its position as a (one-time) frontrunner proved to be a serious constraint after the systemic change. The legacy of a pre-born welfare state, the constant need for compensating potential losers of any economic reform, along with short-sighted decision-making, have together generated specific path dependencies in the Hungarian trajectory of economic development.     

The end of economic transition

The transition from plan to market was the largest natural experiment in economics ever. Now, 20 years from the start of transition, all former socialist countries are market economies at the middle stage of economic development, and convergence with neighbours, if not with the developed world, is largely achieved. With hindsight, it is clear that economists have spent too much time debating proper sequencing of reforms and the fine‐tuning of reform packages. At the same time, the magnitude of the output and consumption fall in some countries was vastly underestimated, while the benefits of reforms have taken longer to materialize than expected. Successful practitioners of reform praise perseverance during and after the initial setbacks and willingness to make political compromises. At the conclusion of the natural experiment, transition economics has all but vanished as an academic discipline, although it played a crucial role in the formation of modern political economics.     

经济分权、人口迁徙与大国发展之路——基于人均产出增长地区差异的实证分析

文章从分权式改革的视角分析了中国改革开放30年来的经济发展道路,总结了中国经济高速增长的主要成功经验在于政治集权下的经济分权。但是经济分权并不能有效缩小城乡、地区与贫富差距,其原因在于中国人口不能自由迁徙,对落后地区的地方政府不能实现"用脚投票"效应,从而影响了对地方政府的监督与激励作用。文章指出只有在人口自由迁徙的条件下,政治集权下的经济分权才能有效激励地方政府,特别是落后地区地方政府发展地方经济的积极性。在认清分权式改革与人口迁徙关系的基础上,正确设计下一步的改革方略,有利于中国真正走出一条大国发展之路。     

从"转变经济增长方式"到"转变经济发展方式"的理论思考

把对经济工作考察的视野从经济增长扩大到经济发展,这符合世界经济发展的一般规律.从"转变经济增长方式"到"转变经济发展方式"的提法创新,是党和国家对我国经济发展规律认识进一步深化的一个重要标志,体现了落实科学发展观、实现经济又好又快发展的内在要求."转变经济发展方式"比"转变经济增长方式"内涵更丰富,在思路上应以节能减排为抓手,以结构调整与优化升级为载体,以体制改革与创新为保障,确保转变经济发展方式的各项工作取得新突破、新进展.     

Economic transition and elections in Poland1

Poland's economic and political transition, one of the most successful, has depended very heavily on job creation in new firms to replace the jobs lost in the formerly state‐owned enterprises. This paper uses survey and aggregate data from three Polish elections to suggest that these de novo firms, the individuals they employ, and the residents in the local areas where they exist become an important constituency supporting pro‐reform political parties and constraining the actions of parties less sympathetic to the reforms. The creation of this political constituency helps explain how countries can successfully pursue both economic and political reforms. JEL classification: D72, P26.     

经济改革与经济学转型

我国的经济改革是在传统计划体制背景下启动的,也是在一定的改革意识引领下发生的,但在传统政治经济学框架内形成的改革理论具有一定的局限性。改革开放以来,经济学者运用现代经济学方法对中国经济进行分析,获得了有价值的成果。但是,我国经济学理论的转型还没有完成。为了深化市场经济的改革,如何科学地认识市场经济,怎样在经济学理论研究中体现现代精神,都需要在范式转型的前提下继续进行探索。     

Making Economic Policy in a Democratic Indonesia: The First Two Decades

After three decades of rapid economic growth during the authoritarian Soeharto era, followed by the deep but relatively short‐lived Asian financial crisis, Indonesia transitioned rapidly to democratic and decentralized governance. We examine policy‐making processes and economic outcomes during the first two decades of this new era, leading up to the 2019 national elections where it was widely conjectured that Indonesia might follow the global trends of authoritarian rule and illiberalism. We conclude that, thus far, Indonesia has navigated the transition from authoritarian to democratic rule quite successfully. Compared to the Soeharto era, growth has been somewhat slower, inequality has risen, and policy reform is slower and generally incremental. But living standards continue to rise and all major political players have elected to operate within the new democratic parameters. Macroeconomic management has continued to be effective. Nevertheless, there are no grounds for complacency: there is a large outstanding reform agenda, and the economy is not providing enough economic opportunities for the better‐educated senior secondary and tertiary graduates entering the workforce.     

Widening Wicksell’s conception of political economy: his “thoroughly revolutionary programme”

Abstract

Knut Wicksell’s opinion that political economy is a “thoroughly revolutionary programme” has often been neglected in the literature. Actually, Wicksell aimed at implementing such a programme in order to enlarge political economy as a “practical science”. It is articulated around three main features: a criticism of the marginal theories, the redefinition of society as a whole, and the advent of social justice. Indeed, Wicksell claimed that economic and social problems may be solved only by a complete social reorganisation. Hence, I show that Wicksell’s social reform programme drives his particular view of and approach to political economy.     

Did political constraints bind during transition?Evidence from Czech elections, 1990–20021

Many theoretical models of transition are driven by the assumption that economic decision making is subject to political constraints. In this paper we test whether the ‘winners’ and ‘losers’ of economic reform influenced voting behaviour in the first five national elections in the Czech Republic. We propose that voters, taking stock of endowments from the planning era, could predict whether they would become winners or losers of transition. Using survey data we measure the degree to which regions were ‘not afraid’ or ‘afraid’ of economic reform in 1990. We define the former as potential ‘winners’ who should vote for pro‐reform parties and the latter as potential ‘losers’ who should support left‐wing parties. Using election results and economic indicators at the regional level, we demonstrate that there is persistence in support for pro‐reform and communist parties which is driven by prospective voting based on initial conditions in 1990. We find that regional unemployment rates in 2002 are good predictors of voting patterns in 1990 and provide empirical evidence that political constraints bind during transition.     

Fiscal Policy in New EU Member States: Go East,Prudent Man!

The European Union accepted 10 new member states (NMS) in 2004, eight of which were former socialist countries. New members have had to adjust their economic policies to EU standards. Perhaps most difficult has been fiscal policy, where NMS must comply with the Stability and Growth Pact rules. Indeed, four of the eight post-communist NMS breached the SGP limits and were put in the Excessive Deficit Procedure. While the SGP is being modified, fiscal policy is set to remain on the agenda for all NMS.

This article analyses fiscal policy in the eight NMS, focusing primarily on the period immediately preceding their EU accession. The structure and scale of these countries' fiscal policy are analysed and the main trends in the revenue and expenditure of their public budgets identified. Then the dynamics of fiscal policies in the NMS are explored and the main factors in them isolated. The authors show how much of the consolidation was due to the fiscal authorities' effort and how much was caused by external factors. They also show that most NMS governments have run rather inconsistent fiscal policies and have not consolidated their budgets appropriately, postponing politically difficult consolidation measures. However, they also identify a group of countries characterised by strong reform efforts and responsible fiscal policy making, supported usually by strong economic growth. In this context, room is given to economic as well as political economy factors.     

DEMOCRACY IN REFORMING COLLAPSED COMMUNIST ECONOMIES: BLESSING OR CURSE?

From a political standpoint, post-communists systems include both democratic and non-democratic nations. From an economic standpoint, they include both collapsing and expanding economies. All four logical possibilities exist for post-communist political and economic systems. The Czech Republic is an example of a democratic political system and an expanding economic system. Russia is an example of a democratic political system and a collapsing economic system. China is an example of a non-democratic political system and an expanding economic system. North Korea is an example of a non-democratic political system and a collapsing economic system. The fact that all four logical possibilities exist suggests that democracy is neither necessary nor sufficient for good economic performance. However, democracy is certainly a value in itself that requires certain basic institutions, including free and fair elections, the orderly transfer of power to those elected, the rule of law and the separation of powers, and the protection of individual freedoms and basic liberties, including those of speech, press, religion, assembly, property, and economic opportunity. Economic policies, rather than the form of government, determine the results for an economy. Russia and China, the two largest socialist economies, followed very different economic policies and experienced radically different outcomes. The failure of “shock therapy” economic policies for transition to a market economy in Russia is related to its use of the Washington Consensus SLP package of stabilization, liberalization, and privatization, as recommended by the World Bank and the IMF. The success of Deng's economic policies for transition to a market economy in China is related to its rejection of the SLP in favor of the ICG approach of institutions, competition, and government. Other interesting cases are those of the Czech Republic and North Korea. Those nations in which both political and economic reforms have been simultaneously successful, such as the Czech Republic, are generally small, homogeneous European nations with a historic work ethic, with a relatively short period of socialism, and with support from neighboring advanced industrialized nations. There is great difficulty in simultaneously establishing both democracy and a market economy without a very special set of circumstances. Thus, it is necessary to determine a sequence for political and economic reform. Ultimately, however, the ideal of both democracy and a market economy may be attained even in nations without special circumstances and external assistance, with Russia eventually turning its economy around and with China eventually reforming politically into a democratic nation.     

Economic Liberalism and the State: Dismantling the Myth of Naïve Laissez-Faire

The article offers a critique of the prevailing understanding of the relationship between neoliberalism and classic nineteenth-century liberalism in contemporary international political economy (IPE) and offers a redefinition inspired by Polanyi and Gramsci. Within critical IPE studies, a consensus has emerged that neoliberalism cannot be reduced to a simple attempt to roll back the economy and let loose free-market forces. However, this insight relies on contrasting neoliberalism with a classic liberalism, that is, a simple attempt to implement just this naïve laissez-faire ideology. In contrast, this article argues that nineteenth-century liberalism is also characterised by an active use of state and legislative power. Through a historical study of two cases from nineteenth-century Britain, Poor Law reform and the Gold Standard, the paper will argue that state action played a central role even during the heyday of laissez-faire liberalism. With a starting point in Polanyi’s dictum that ‘laissez-faire was planned’, this reinvestigation will point towards a need to develop a more nuanced understanding of the distinctions between economic theory, ideology, and practical policy, as well as pointing towards a general reinterpretation of the role of the state in liberal economic ideology.     

Privatisation and Transition in Albania

This article considers the privatisation policy and its role in the transition to a market economy in Albania. The disintegration of the old regime took place over a much longer time than in other Central and East European countries, resulting in chaos and a political vacuum in which no systematic or effective policy could be formulated. The new government, committed to fundamental reforms necessary for a market economy, did not take power until after the second general election in March 1992. One outcome of this long pre-transition period was that the privatisation programme had to evolve gradually in the course of transformation, without ever having been planned in a comprehensive and integrated manner. Privatisation proceeded on five different fronts: small privatisation, privatisation of agriculture, housing, small and medium-sized enterprises and mass privatisation. The article discusses the progress of each aspect and provides up-to-date information and data on their progress. The privatisation of agriculture and housing were the most crucial aspects of the overall policy, with significant impacts on economic growth and the progress of the transformation programme. The privatised agricultural sector grew very rapidly and made a major contribution to pulling the whole economy out of the 'transformational recession'. Privatised housing created a significant wealth effect amongst the urban population, providing many of them with collateral or start-up capital. The privatisation of state-owned enterprises, however, was carried out with much more difficulty and controversy. Although auctions were to be the main method of transfer, ensuring a significant income for the treasury, in practice many enterprises were privatised through other methods, bringing in less income and giving rise to allegations of political favouritism. Another aspect of privatisation was the weak corporate governance mechanism which replaced state ownership. Many small and medium-sized enterprises (probably about half) were sold or transferred to their employees, without any outsider interest. The performance of this sector has to be monitored closely in order to assess the impact of massive insider privatisation, reminiscent of Russia's privatisation programme. Mass privatisation too, by distributing enterprise shares amongst the general public, resulted in the increased power of insiders. The shares of nearly 100 enterprises were transferred to the private sector over the first year of the implementation of this programme. Although the privatisation programme progressed very rapidly, no serious attention was paid to problems of corporate governance. Without concentrated ownership or the involvement of financial intermediaries to oversee and monitor the managers, it is unlikely that the expected efficiency gains will be realised. The political crisis resulting from the collapse of informal financial schemes brought the whole reform process, including the privatisation programme, to a halt in early 1997. It is expected that, with a new government in power, there will be a new push for reforms and an increased pace of privatisation. It is hoped that the renewed efforts will also deal with the shortcomings of the previous schemes-particularly the corporate governance issues.     

深化干部人事制度改革 加快经济发展方式转变

转变经济发展方式源于经济领域,但其所具有的重大意义和影响却远远超出经济领域,对政治领域的干部人事制度改革也提出了新的要求。它要求干部人事制度进一步深化改革,从人事管理、教育培训、选拔任用、考核监督等多方面为经济发展提供高效、便利的指导、保障和支持。深化干部人事制度改革,必然有力地引领、保障和支持加快转变经济发展方式,从而促进经济建设、政治建设、文化建设、社会建设全面协调发展,全面深入地贯彻落实科学发展观。     

Chronicles of a democracy postponed

We explain a lack of civic culture in today's Russia, closely related to a democratic deficit in the country, by a path dependency which has originated at the critical juncture of transition to market economy. Suppression of democracy in the early 1990s to expedite unpopular reform exposed the new institutional order to oligarchic capture and set in motion a vicious circle of extractive economic and political institutions. The latter have been shaping views and attitudes in the society via institutional learning, continuously suppressing civic culture and solidifying social foundations for extractive institutions. We present evidence from the World Values Survey supporting the above conclusions.     

经济主体与"专业化"的形式

"专业化"作为重要的经济现象,人们对它的认识与它的地位极不相称.在高度强调分工和专业化的全球化经济格局下,迫切需要理清对"专业化"的认识.从它的表现形式入手认识"专业化"是途径之一.专业化因划分标准的不同具有丰富的表现形式.本文将从经济主体的角度入手指出专业化有四种主体性形式,并认为"集群"不仅是区城经济专业化的特征,而且是区域经济专业化的结果.     

Adjusting an institutional framework to a globalising world: the creation of new institutions in the EEC, 1957-1992

ABSTRACT

This article explores the development of all new EEC institutions between 1957 and 1992 within policy areas relevant to the possible development of a European single currency. It argues that if most institutions created pre-1992 were not crisis management institutions as would be the case post-2008, some important institutions were created in response to the perception of a structural international banking/political/economic crisis, particularly in the 1970s. This comparison in time underlines the continuity of reflections about the missing elements of a functioning single currency area, the obstacles to reform, and sheds light on the radical institutional changes that occurred post-2008.     

Fossil Fuel Subsidy Reform,Rent Management and Political Fragmentation in Developing Countries

Over the last decade, pressure to reduce subsidies for energy (especially fossil fuels) in developing countries has mounted, but reform is politically controversial. The debate on reform is dominated by a liberal narrative that employs an understanding of energy subsidies as political rent, based on public choice theory. Here, it is argued that this approach takes too static and limited a view of rent, and that engagement with theories of the state in the development process suggests a more dynamic view. The degree of centralisation of political power is also argued to be a key factor in the use and reform of subsidy. This application of the framework is then illustrated in the case of Indonesia. Finally, implications for reform strategies are drawn out.     

新中国成立70年来经济学研究范式的演变与创新

新中国成立70年来,我国从传统的计划经济体制逐步向社会主义市场经济体制过渡,经济学研究范式也随之发生了深刻的变化。改革开放之前,与高度集权计划体制相适应,流行的是传统政治经济学研究范式;20世纪80年代初,随着放权让利改革的推进与市场机制的引入,东欧经济学研究范式在我国产生广泛的影响;进入20世纪90年代之后,西方主流经济学研究范式随着市场取向改革不断深化而在我国逐步流行。“中国道路”创造了“中国奇迹”,“中国道路”的本质就是在坚持社会主义基本经济制度条件下,发挥市场在资源配置中的决定性作用。无论是传统政治经济学,还是西方主流经济学都难以回答我们在这场前无古人的伟大社会实践中遇到的难点与重点问题,因此创立具有中国特色的社会主义经济理论就成为历史的必然。我们应该认识到创建中国特色社会主义经济理论是一项长期的历史任务。为此,我们应努力做到以下几个方面：第一,努力推进马克思主义经济学的当代化与中国化;第二,以全方位开放的学术态度推进中国特色社会主义经济理论体系的构建;第三,倡导直面现实的研究方法;第四,推进研究方法的现代化;第五,充分认识到创建中国特色社会主义经济理论的长期性与艰巨性。