The state and economic convergence in Central and Eastern Europe between 2004 and 2023

Abstract

The main question of the study is how the role of the state has changed since the first post-socialist enlargement of the European Union (EU) in the Central and Eastern European (CEE) member states, and how this has affected their economic convergence. The starting point of the analysis is that the ideal of limited government, which was dominant in 2004, has been challenged in the 2010s by populist attacks on the rule of law, while a series of crises increased demands for state involvement. The paper reviews how countries in the region have responded to these developments, how differences are reflected in the transformation of fiscal spending and how this impacts convergence. It concludes that the ideal of limited government remains relevant and provides the most appropriate foundation for economic development, while the absence of checks and balances on executive power facilitates voluntarist state interventions, which are rarely successful from the perspective of public welfare.