7. Dependency, Development, and the Politics of Growth Models in Europe’s Peripheries

This chapter analyzes developmental pathways and economic growth models in Eastern and Southern Europe from the perspective of the dependency research program. It focuses on two main situations of dependency in Europe: peripheral financialization with demand-led growth in the South and dependent reindustrialization through foreign direct investments with export-led growth in Central and Eastern Europe. Contrary to existing structuralist approaches, the chapter argues that these situations of dependency represent different solutions to the challenge of market integration with much richer and more developed economies of the European core. While the South sought to protect domestic firms, allowing for or even directly fostering deindustrialization, Central and East European countries aimed to preserve industrial legacy even at the expense of FDI-dependency. Such responses were in turn shaped by specific domestic political coalitions as well as by different strategies of the EU, which left more or less space for reproduction or transformation of domestic coalitions. While contemporary situations of dependency bear different developmental implications than those in the twentieth-century Latin America, the main insights of the dependency research program remain pertinent for analyzing the challenges of core–periphery integration in the twenty-first-century Europe.