Institutions of Coordination in Central and Eastern Europe: Has the Emergence of Global Value Chains Modified the Nature of Dependent Market Economies?

Global Value Chains (GVC) is increasingly referred to as a framework particularly promising to capture the evolutions in the International Division of Labour (IDL), thanks to its focus on MNCs and their role in the international networks of production (Gereffi et al. 2005; Grodzicki & Geodecki 2016). Despite these claims, the effects of global value chains on both the domestic structures and the long-term modes of development remain underexplored. In this article, we argue that useful complementarities exist between GVC and Varieties of Capitalism (VoC). The two theoretical approaches, indeed, share a firms’ centred focus and account for the relations between firms and other economic and social actors. However, whereas GVC prioritizes hierarchies and governance of international networks, VoC emphasises channels of coordination and domestic institutional equilibrium. Combining them allows investigating domestic effects and political issues stemming from GVC emergence. In order to test the complementarities between the two approaches, we develop a comparative analysis of the Central Eastern European countries, which Nölke and Vliegenthart (2009) denominated as Dependent Market Economies (DMEs). DMEs assume MNC hierarchy and the provision of capital via FDI to be crucial in the coordination channel and have comparative advantage in the assembly and production of relatively complex and durable consumer goods. In this paper, we argue that the emergence of GVC has placed the DMEs’ coordination channel under considerable stress and we test this proposition by closely scrutinizing data concerning labour relations (ICTWSS), role of the foreign companies (OECD) and GVC position (WIOD), innovation patterns as well as the political initiatives enacted by governments to address the slowing pace of catching-up processes. A combined reading of those elements ultimately allows claiming that the changes that occurred in the coordination channel appear to have exacerbated the dependency rather than led towards equalization of positions in IDL.