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The Institute of World Economics, CERS organised a successful conference on the varieties of capitalism


Even the pandemic could not impede the sixth instalment of “The Role of State in Varieties of Capitalism” conference series organised by ELKH Centre for Economic and Regional Studies’ Institute of World Economics. These events typically explore the state’s relation with economic, political, and social development. Moreover, they have provided a platform to discuss the so-called varieties of capitalism approach through international comparisons. In 2020, participants analysed the development paths of emerging economies. It is impossible to provide a short overview of all the keynote lectures, book launches, and the nearly forty presentations, spanning numerous different topics; that is why, in this short report, we will  only present a handful of new research results and future directions of work.

In the first keynote lecture, Béla Greskovits (Central European University, AT–HU) offered novel insights on latecomer economies’ development trajectories by focusing on the period since the Global Financial Crisis and the ensuing Great Recession. The lecture was especially original, since Professor Greskovits did not present the results of research he had completed, but invited the audience to think about these issues together. In doing so, he provided some guidance to explore different levels of analysis and the ways in which continuities and changes could be identified. He then highlighted the intellectual and conceptional changes related to development and catching up. These showed that there is a rise in scepticism towards the need for an intensified integration of latecomer countries into the world economy. And in contrast to former, more optimistic views, dominant path dependency approaches have to be replaced by more dynamic and volatile models.

The keynote speaker also stressed that since Varieties of Capitalism (VoC) models have focused on the supply-side (i.e. firms), analyses have to include the demand-side to be able to reflect recent changes. This can lead to more eclectic analyses and result in hybrid models; which, however, may better resemble reality. Béla Greskovits provided a critical presentation and analysis of basic new models that describe the dependent development of emerging economies, and also indicated new research avenues and possibilities.

The second keynote speaker, Tomasz Mickiewicz (Aston University, UK) presented a new, alternative theoretical framework for resurgent institutional analysis. This presentation was also path-breaking, as it explicitly aimed to go beyond the critical analysis of existing theories and approaches. Professor Mickiewicz’ starting point was the argument that in order to better understand institutions, one has to better understand human behaviour first. For this, he posits that Amartya Sen and Martha Nussbaum’s capability approach might be especially useful, given its focus on the value of freedom and the freedom of choice, which Mickiewicz incorporated into development which he sees as a process of enhancing people’s capabilities by expanding their freedom.

Research in the special sections related to the  “From developmental states to new protectionism: changing repertoire of state interventions to promote development in an unfolding new world order” (FK_124573) project financed by the of the National Research, Development and Innovation Office (NRDIO) in Hungary has been investigating the possibilities available to the 21st century’s developmental states. Christopher Wylde (St Mary’s University, UK) argued for a new theoretical framework, which goes beyond the conventional state–market and domestic–international dichotomies, while taking into account the dynamic changes of power relations among different interest groups. In a similar vein, Mustafa Kutlay (University of London, UK) and his co-author analysed the possibilities and limitations of a development-oriented foreign policy, by considering the example of Turkey.

From the side of the host institute (Institute of World Economics, HU), Judit Ricz critically analysed new industrial policies in Brazil, while Zsuzsánna Biedermann looked at the role of international power dynamics in structural transformation, based on the case study of Botswana. Finally, Michael Schedelik (Goethe-Universität Frankfurt, DE) and his co-authors took a somewhat different approach and aimed to broaden the conventional VoC framework in order to better understand recent state-led capitalist experiments. In their new theoretical framework, they incorporated the analysis of growth regimes and social coalitions into the institutional analysis of state-led varieties of capitalism.

Several presentations raised the question if there were alternative models of development for Central and Eastern Europe to the one determined by European Union membership. Miklós Szanyi (Institute of World Economics, HU) called attention to the fact that historically three different development models influenced the region and their imprints are still visible. The Western part of the region joined the EU and, with this action, opted for the “Atlantic model”. In the case of the Balkans and the Post-Soviet region, the impact of the Atlantic model has always been counterbalanced by the strong influence of the two alternatives: the Ottoman-Balkan and the Russian development models. This difference is reflected in the social and economic processes of the 21st century as well.

Piotr Kozarzewski (Marie Curie-Sklodowska University Lublin, PL) demonstrated the impact of the Russian model through the example of Belarus. This is characterized by an authoritarian political system and the dominance of state sector in the economy. In the era of curtailed competition and bourgeoning state intervention, this country’s economy can function only due to the immense support it receives from Russia. Péter Mihályi (Corvinus University of Budapest, HU)  analysed what he sees as the most important institution of the two Eastern development models: rents. Although rents are created in all countries, including those following the Atlantic model, their hindrance on the economy depends on their relative size and prominence. The role of rents is more important in authoritarian regimes. Rents connect business and politics and are therefore the hotbeds of corruption, which is the main reason for the modest performance potential of rent-based economies.

Anita Pelle and her co-authors (Szeged University, HU) conducted an empirical study on the European varieties of capitalism based on new data. An interesting result of theirs is that Ireland represents a stand-alone, successful type of capitalism. A further key finding is that Czechia, Estonia, and Hungary form a separate group, which can be characterised by strong openness, high investment rates, and exceedingly active government intervention. Thus, we have the hope in the Eastern part of Europe for a successful catching-up, but this process should be based on intense investment activity and trade openness.

The changing role of the state was the topic of several presentations. Andrei Yakovlev (Higher School of Economics, Moscow, RU) and his co-authors analysed the state subsidies manufacturing companies received in times of crisis through the case of Russia. They showed that subsidies are extended in exchange for specific services. Katalin Antalóczy and Magdolna Sass (Budapest Business School and Institute of World Economics, HU) compared the role of the Hungarian and Indian governments in supporting pharmaceutical companies’ internationalisation process. They highlighted that instead of direct state ownership, the state facilitated the process as a regulator and actor by influencing the operational environment. These governments’ room for manoeuvring is simultaneously largely influenced by the international environment as well as their memberships in international organisations and integration with other states.

One of the roundtable discussions organised at the conference focused on a recent publication to which numerous researchers of the Institute of World Economics, HU contributed. Edited by Ágnes Szunomár and published by Palgrave Macmillan (, the volume, Emerging-market Multinational Enterprises in East Central Europe, is the culmination of a four-year-long research process financed by the National Research, Development and Innovation Office, which analysed the activities of emerging market multinationals in East Central Europe. During the roundtable, those who contributed to the book discussed a wide range of questions pertaining to the activities of these companies: what explains the interest of emerging market multinationals to take capital investments in East Central Europe? Why do they choose this region in particular, and in what sense do their motivations differ from those of their more developed counterparts? Last but not least, how, if at all, can regional countries such as Hungary profit from the local presence and activities of these companies?

Overall, the two-day conference clearly dispelled the notion that the online format is not suitable for meaningful and intensive academic discussions and exchanges. Hosted by the Institute of World Economics of the Centre for Economic and Regional Studies, the conference drew participants from almost twenty countries. As successful as it was, the organisers hope that next year’s conference will return in a live format.