Political elite, civil society, and type of capitalism: Estonia and Slovenia

East European Quarterly, March, 2008 by Frane Adam, Matevz Tomsic, Primoz Kristan

Based on this data and considering other findings, (14) we hypothesize that organized civil society in both countries is gaining in importance; however, in general it is still playing a relatively weak role as a partner to the political elite.

Liberal vs. corporatist regulation

Proceeding from our analysis it can be argued that the Estonian elite designed the type of state which is close to the model of a liberal minimalist state whereas its Slovenian counterpart produced a model close to the corporatist welfare state (similar to that in Austria, Germany, or the Benelux countries) but with some peculiar elements stemming from its specific local (and Eastern European) context. This conceptual difference is also reflected in the labour market and the development of institutional regulative mechanisms.

After the initial decline seen in union membership associated with the institutional changes and sectoral reallocations during the transition period, unions have become more homogenous organizations and genuine representatives of sectoral interests, which has also led to the fragmentation of union structures and the rise of new specialized unions (Feldman 2006). The representation of workers' interests in Slovenia is well developed and institutionally coordinated in the form of the (typically neo-corporatist) tripartite Economic and Social Council, whereas labour unions play no significant role in Estonia, particularly not in wage bargaining. Collective bargaining is the most important factor determining wages in Slovenia, leaving only a small maneuvering space for employers to regulate wages according to their business interests and the labour market situation. The minimum wage is being set by negotiations between employers and labour unions, while enactment lies in the domain of the competent ministry (Ivancic 2007). Legal employment protection in Slovenia is the highest among Central and Eastern European transition countries. (15) In Estonia, the legal protection of permanent employment as well as protection from collective dismissal is basically at the same level as in Slovenia; however, a national report for Estonia (2007) accentuates the mere formality of the legal protection since many employers systematically violate legal regulations by exerting pressure on employees to register themselves as self-employed and thus reduce the cost of wages (Ivancic 2007). The government's interference in wages paid by the business sector is limited and confined to the establishment of a minimum wage and adherence to the provisions of the wages law, which largely means that "the employees as the weaker party in the labour market are given internationally acknowledged guarantees" (Alas/Svetlik 2004). According to Alas and Svetlik, the Estonian government regulates the wages of only some 10% of employees.

In economic theory, two distinct models or patterns of economic coordination--coordinated market economies (CME) and liberal market economies (LME)--are linked with Slovenia and Estonia. Some authors (Feldman 2006, Buchen 2005) argue that the emergence of either type of industrial relations in both countries can be understood by examining the inherited institutions (legacies) and strategic policy choices relative to privatization and monetary policy (strategic policies). Legacies determine the emerging institutions during the transition period and differ sharply between Slovenia and Estonia. Thus, for example, the decentralized institution of workers' self-management (horizontal ties) in the former Yugoslavia as opposed to the centralized Soviet system of political control over economic affairs resulted in a different role and extent of trade union involvement and privatization. Considering the privatization policy choices, the new elites in Estonia leaned heavily on foreign investment, which significantly weakened the old interests and influence of workers (Feldman 2006).