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After 20 years of status quo: the failure of gradualism in Slovenia’s post-socialist transition

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  • Spruk, Rok
Abstract
In the past 20 years, the Slovenia has been praised as the richest former socialist country, having accomplished the advancement from borrower into donor status at the World Bank and having entered the European Monetary Union as the first country from former socialist block. In the due course of transition to market, Slovenia adopted the gradualist approach to economic reform, emphasizing gradual privatization, excessive regulation of the labor market and financial sector as well as the slow stabilization of public finances. In this paper, we review macroeconomic performance of Slovenia in past two decades in a comparative perspective. The paper outlines the growth trajectory of Slovenia from the onset of Habsburg Empire to the present. We showed that until 1939, Slovenia has almost fully converged to the income per capita frontier of Austria and Italy while the income per capita diverged substantially in the period 1945-1990 from Western European frontier. We review the contours of labor market protectionism, state dominance in banking and financial sector and emergence of the corporate oligarchy as the main symptoms of stalled economic performance given a substantial differential in income per capita between Slovenia and EU15. Moreover, we demonstrate how former communist elites transformed into powerful networks of interest groups which preserved status quo from socialist period through systemic blockade of key economic reforms to stabilize public finances in the light of age-related pressures and to boost productivity growth and structural change.

Suggested Citation

  • Spruk, Rok, 2012. "After 20 years of status quo: the failure of gradualism in Slovenia’s post-socialist transition," MPRA Paper 36268, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:36268
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    References listed on IDEAS

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    Cited by:

    1. Csaba, László, 2012. "Milyen euró kell nekünk? És mi végre?," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 706-709.

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    More about this item

    Keywords

    post-socialist transition; macroeconomic stabilization; economic growth; political economy; Slovenia;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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