Democratic facades, authoritarian penchants: post-communist monetary restructuring in the Baltic states

Abstract

ABSTRACT This paper argues that the paths taken by Estonia and Latvia in their departure from the rouble zone are illustrative of authoritarian neoliberal governance. By challenging the widely assumed simultaneity of ‘democratic’ and ‘market’ revolutions, it critiques institutionalist literature on Baltic exchange-rate regimes and sheds light on the various methods employed to curtail democratic political discourse and participation. The paper delves into the origins of the Baltic neoliberal historical blocs and identifies the social forces that influenced the development of monetary reform initiatives. It then explores the construction of exchange-rate systems through the lens of power struggles within the state bureaucracy, as well as the restructuring of state apparatuses to limit public oversight of monetary policy formulation and implementation. Finally, the paper demonstrates how Baltic currency boards effectively facilitated the establishment of externally-oriented capital accumulation regimes.