Continuity in diversity: the political foundations of the COVID-19 responses in East Central Europe

Most political economists agree that in the aftermath of the global financial crisis (GFC) the Central and Eastern European (CEE) dependent foreign investment-based growth models have not fundamentally changed. Nevertheless, the post-crisis decade also reveals that some governments sought to end the dependence on foreign capital by selectively bolstering domestic firms. This trend has been accelerated by the relaxation of fiscal constraints during the pandemic. Building on original self-coded data on CEE socio-economic pandemic responses, this paper investigates, through congruence analysis and focused comparisons, the causes of different policy responses in the realms of social and industrial policymaking. Our argument regarding these causes is threefold. First, the role and preference of dominant business sectors that the government tries to appeal to conditions the nature of the industrial policy response. Second, the social policy responses in particular have their roots in governments catering to its electoral constituencies and strengthen its voter base. Third, these factors taken together result in the Covid-19 crisis acting as a path reinforcers rather than a critical juncture. To illustrate this argument we compare the policy responses to the pandemic in Poland, Slovenia and Slovakia. In Poland, the government's connection to blue-collar workers and domestic business groups with a preference for public investment engender a generous social policy response and industrial policy focussed on upgrading. Slovenia exhibits a similar pattern in social policymaking, however, the government's limited links to domestic businesses rendered its industrial policy response both less generous and less focussed on upgrading. Finally, in Slovakia both social and industrial policy are aimed at status quo protection due to the (new) government's pro-business, efficiency-enhancing profile and its aim to appeal to constituents traditionally prone to vote for Smer-SD – the previously governing party. All three cases confirm the argument that the pandemic reinforces policy-paths taken prior to the crisis rather than resulting in a comprehensive shift.