Nation (Re)Building Through Social Investment?

Abstract

The chapter departs from the assumption that today’s social investment (SI) reforms need to be understood against the countries’ policy legacies. It traces the development of SI policies in three Baltic States (Estonia, Latvia, and Lithuania) from restoration of independence in the 1990s until the late 2010s and explores policy responses to recalibrate the former communist welfare regime into a competitive, skill-focused model. By analyzing SI reform efforts in education, family policy, and the labor market the study demonstrates that the same legacies had different impacts on different social policy fields, inter alia distorting the political discourse and strategies of reforms. This facilitated the skill creation–oriented inclusive distributional profile in education but less intense and more stratified profiles in other policy areas. Although the three countries share many common legacies (such as a Soviet communist past) and contemporary characteristics (such as developing an Anglo-Saxon prototype of the welfare regime), there are important cross-country differences in priorities and agility of SI reforms. The interplay of government composition and nation-building discourse intervened with the politics of reform and resulted ultimately in a more agile reform trajectory in Estonia and Latvia compared to mono-ethnic Lithuania. The chapter concludes that legitimizing radical reforms through nation-building turns out to be a more important factor in reform agility than ideologically favorable coalitions.

Social investments in the knowledge economy: The politics of inclusive, stratified, and targeted reforms across the globe

“…The United States (and partly Canada) were a world‐leader in expanding education, particularly higher education (Heidenheimer, 1973), even if other social investments—and social compensation—remained underdeveloped (Prentice & White, 2022). The Baltic countries also chose a focus on skill creation after independence in the 1990s, trying to develop a growth model focused on high‐skill services and the information, communication, and technology (ICT) sector (Avlijaš, 2022; Toots & Lauri, 2021).…”

From nationalism to educational divide? Party positions and voters’ profiles on welfare state issues in Estonia and Latvia in the 2010s

“…According to Kostelka and Rovny (2019), pro-independence political forces in peripheral republics of former communist federations oppose egalitarianism both on economic and national grounds and thus, associate free market economics with cultural conservatism. This is a pattern, clearly present in Latvia, and to a significant extent also in Estonia (Toots & Lauri, 2022). In case there is a significant ethnic minority from the ex-federal centre (such as the Russian minority in Latvia and Estonia), the left parties are assumed to advocate for cultural liberalism (Kostelka & Rovny, 2019).…”

“…We claim that Tavits and Letki (2013) slightly neglected the positive effects of the 2010s market reforms. Instead of seeing only the "losers of transition", who could counter the neoliberal welfare state agenda, there are also the "winners of transition" -business and banking sector professionals, individuals with high earnings, good education and excellent employment perspectives (Toots & Lauri, 2022). These people are not entirely against the welfare state but do favour its orientation towards social investments and individual choices .…”

“…As indicated earlier, some specific parties and generic party families in Estonia and Latvia tend to be quite different from their equivalents in Western Europe. In general, Estonia and Latvia have been considered as strongly right-leaning in terms of governing coalitions and voter demand (Toots & Lauri, 2022). However, this appearance might be somewhat misleading.…”

Evaluation of active labor market policy reform: Employment outcomes of employment rehabilitation services

“…However, in Estonia and other post-soviet countries, where the dominant political ideology is liberal and labor unions utmost do not exist, active labor market policies (ALMPs) are relatively new. By using the typology of Bonoli [8], Toots and Lauri [9] argue that among four types of labor market policies, Estonia belongs to the strong-weak category -'Employment assistance' type, concentrating ALMPs on placement services, job subsidies, counseling and job search programs. Also, it is argued that from a practical stance the employment of disabled in most post-soviet countries is generally categorized as health and safety, rather than equal opportunity matters [10].…”