Slovenia: The End of a Success Story? When a Partial Reform Equilibrium Turns Bad. Issue 2 (7th February 2016)

• Record Type: Journal Article
• Authors: Guardiancich, Igor
• Is Part Of: Europe-Asia studies. Volume 68:Issue 2(2016)
• Page Start: 205
• Page End: 231
• Publication Date: 2016-02-07
• Subjects: Europe, Eastern -- Periodicals; Eurasia -- Periodicals; Former Soviet republics -- Periodicals; Soviet Union -- History -- Periodicals; 940
• DOI: 10.1080/09668136.2015.1126805
• Languages: English
• ISSNs: 0966-8136

Abstract

Abstract: During the Great Recession, Slovenia recorded one of the worst economic performances within the EU. Such a decline is surprising as the country was the most stable among the post-socialist states. The article individuates the root cause for the downfall in protracted reform gradualism, which resulted in an inefficient privatisation process. This locked the country into a 'partial reform equilibrium' where economic elites extracted rents. Following accession to the EU, the unsustainable lending practices of state-owned banks to corporate organisations and the gridlock in policymaking pushed the country into an economic and political 'bad equilibrium' . Even though the Slovenian export sector proved to be surprisingly resilient, a massive debt overhang and a huge reform backlog are still weighing down on a healthy recovery.