To Economic Patriotism: New Trends in Post-Socialist Countries – EU Members

Abstract

The paper analyzes the premises and impacts of dependent capitalism model formation in Central-East European (CEE) countries, new EU members; the model is based on large-scale inflow of foreign investments and coordination of economic ties by hierarchies of transnational corporations. It is stated that CEE countries’ leaderships run into a neoliberal democracy paradox, i. e. the need to meet citizens’ social demands while exercising ever less control over national economies. The prospects of dependent capitalism model continuance in the region are assessed under new post-crisis trends in world economy, in particular, in view of reduction of transborder capital flows and decelerating international trade growth.The sources of economic growth operationalized in CEE countries in order to evolve from long-running stagnation they found themselves in after the world financial crisis, are researched. It is proved that reliance on growing domestic consumption accompanied by weaker export orientation of the economy leads to CEE countries losing their important comparative advantages. The higher-than-anticipated growth of wages compared to labour productivity growth, depletion of reserves in utilization of labour resources cause deterioration of regional economy competitiveness.Special attention is paid to analyze the premises of spreading of economic nationalism ideology in the region. Exemplified by Hungary, years long leader among CEE countries in foreign capital inflow, tools are demonstrated which are applied in the framework of economic policy aimed to restore state control over market economy; an attempt is made to evaluate the effectiveness of this policy. The conclusion is drawn that – contrary to liberal dogmata dominating in economic theory – making use of tools of economic nationalism can be rather efficient even under conditions of small size post-socialist countries of Europe.