Small States in the Modern World
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Small States in the Modern World

Vulnerabilities and Opportunities

Edited by Harald Baldersheim and Michael Keating

Small States in the Modern World comprehensively assesses the different modes of adaptation by small states in response to the security and economic vulnerabilities posed by global change. It uses a diverse collection of case studies to explore the complexities of change and to place them in their temporal and geographical context.
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Chapter 11: Small states and national elites in a neoliberal era

Anton Steen


Neoliberal economic reforms have rightly been seen as elite-driven and part of a broader internationalization process in which rapidly changing environments especially affected small countries with open economies. From the middle of the 1980s, neoliberal ideas profoundly affected established democracies where the traditional welfare state came under pressure, and from the early 1990s such ideas also became crucial for the transformations of post-communist states into market economies. It is well documented how post-communist governments adapted national policies to international recommendations for state deregulation and international competition despite economic hardship for the general population. However, there is little knowledge about to what extent the broader elite supported the reforms and how country context and external shocks influenced their attitudes. The focus here is on how various elite segments responded to neoliberal ideas in the small Baltic states of Estonia, Latvia and Lithuania, as well as in Norway, and why there are considerable differences in orientations among their elites. The economic successes of small states have been explained by unitary national politics founded on elite consensus and formalized social partnership (Katzenstein 1985). In order to meet the challenges of insecure international environments and globalized markets, a certain level of national solidarity and harmony on basic policy issues has to be in place.

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